Thursday, 25 January 2018

AUTOMOTIVE POLICY – Consistency vital for industry continuity

Last week, the International Trade and Industry Minister, Dato’ Sri Mustapa Mohamed announced the performance of the automotive industry for the year ending last year. The announcement was made in view of a holistic performance, in line with the government’s aspirations in making the sector a key driver for Malaysia’s industrialisation.
The penetration of energy-efficient-vehicles increased for the fourth consecutive year, breaching the 300,000 production mark for the first time  its introduction, through the National Automotive Policy 2014 (NAP2014).
Exports of automotive parts and components are expected to meet its RM12 billion target, as third-quarter 2017 figures stood at RM9.3 billion. Exports of remanufactured components stood at RM516.4 million as at November, surpassing that of 2016. Despite the decline in the number of completely-build-up units (CBU’s) exported, the year-to-date value loomed close to 2016 figures, at RM944.2 million as at November 2017.
Furthermore, RM3.99 billion in investments commitment has been pledged by the industry for this year to 2022, in addition to the RM7.6 billion worth of investments realised last year.
Careers in the automotive industry are the biggest gainers, especially for skilled employment. Last year, 27,175 new jobs were created in the sector, 31 per cent of which comprised skilled and highly skilled employment. The industry also saw 1,252 graduates from Malaysia Automotive Institute’s lifelong learning upskilling programs.
Although domestic sales have taken a minor stumble in the past two years, it is important to look beyond those numbers and analysed the growth of the automotive industry holistically. While sales are important for the industry sustainability, it should not be the only yardstick.
Continuous growth cannot happen overnight. It requires consistent improvements, reviews, analysis and innovation. Such consistency must come from all key players. Government policy, industry commitment and consumer buy-ins must align with one goal – competitiveness.
As we inch closer towards a global competitive ecosystem, the benefits are optimised and well-balanced. The industry thrives within a consistent industry framework, and consumers benefit from a consistent supply of choices and an ecosystem that forces market balance through the principles of demand and supply.
For the last four years since the NAP2014 was launched, the philosophy was straight forward – moving towards gradual liberalisation of the industry, but in reaching those goals, the industry must be shaped to be ready and consumers must be aware of such goals.
With that in mind, NAP 2014 will be reviewed this year, taking into account new trends and changes that we must adapt to based on our observations of global markets over the last few years.
One of the important global trends is the remodelling of the concept of future mobility. It is important that the industry grasps the entirety of this lifestyle construct.
The NAP 2014 review is currently in progress, and we are working closely with the relevant industries and authorities to ensure that it will be is in line with national economic agendas and matches industry aspirations.
The current automotive policies have not only broadened the overview of the industry, but have also moved businesses and careers ahead as planned.
While setbacks are a natural part of progress, the important take away is that a consistent philosophy of competitiveness has necessitated the industry’s resilience and holistic growth.
This central philosophy has been a key feature of the nation’s administration for most of the decade. The progressive thinking towards gradual liberalisation - albeit with resistance - has created greater economic resilience in uncertain times and will have the power to maximize opportunities in better times.
To move forward, stability and consistency in economic policies is something we deserve.
“The strength of the tree lies not in the beauty of its fruits or flowers, but the resilience of its roots.”

Thursday, 18 January 2018

NEXT LEVEL OF COMPETITIVENESS - Government in full force for Industry 4.0

In early last year, the government began the formulation of a national Industry 4.0 framework to take Malaysia to the next level of competitiveness as we brave through the Fourth Industrial Revolution (Industry 4.0).
The International Trade and Industry Ministry, the Science, Technology & Innovation Ministry and the Higher Education Ministry were tasked by the Cabinet to lead this initiative.
The framework will focus on greater compliance to Industry 4.0 within numerous cross-ministerial functions, from education, healthcare, manufacturing to downstream services, such as marketing and sales.
The manufacturing sector, which currently ranges between 2.0 (mass production) and 3.0 (automation) levels of compliance, is expected to go through a large scale transformation.
As the electrical and electronics, aerospace and automotive sectors have seen a higher level of Industry 4.0 advancement, these segments receive tremendous focus and support to spur lower tier businesses towards Industry 4.0 compliance, through a higher degree of business and job opportunities in high value economic activity.
The last two brainstorm sessions between International Trade and Industry Ministry and its nine agencies have focused specifically in the acceleration of the Malaysian industry towards future global trends.
These organisations, working in complete unison, focus on the different aspects of business development - covering capacity development, funding, export promotion, and specific sectoral needs for the automotive, aerospace and raw industry materials.
As at last year, the Malaysia Automotive Institute (MAI) has implemented eight out of nine Industry 4.0 pillars that enhance the economic fundamentals for the automotive industry players.
These pillars include incubation and facilitation of businesses in highly demanding technology areas, such as smart manufacturing execution, digital engineering, big data management, additive manufacturing, cloud computing and cybersecurity.
The MAI Resource Center and the MAI Design Center are two important centers to the implementation mentioned, along with the intitute's headquarters in Cyberjaya.
It is important to understand that such economic and industrial fundamentals were not a product of short term milestones, but decades of continued socio-economic stability enjoyed by Malaysians.
As a nation that only 60 years of independence, we have enjoyed the peace of mind to focus on what lies ahead of us - granted through developmental economic policy, intellectual diversity, balanced resource management and long-term political stability.
In the inevitable future of globalised connectivity and borderless commerce, we can no longer afford to be sidetracked by issues that are counterproductive to the task we have ahead.
Many of the advanced nations we see today achieved their status more than a century before we even achieved our independence. Therefore, we need to move at a faster pace as a nation that is developing in the shadows of those with tremendous advantage over us.
It is easy and often pleasing to delve into issues that are sensational in nature. While the government plays a central role in the formation of the nation's industrialisation policies, the country will not achieve advanced status without societal focus and support in a politically mature fashion.
In the pursuit of fair administration, we must listen to all views and not only to those we prefer to hear. However, criticism must be free of sensationalism and rhetoric. They must be critically factual, fairly analysed and communicated truthfully.
For a democratically progressive society to move forward, each of us has a right to question and representation, but we also have the obligation to listen and analyse without pre-conceived bias. Let us not condescend merit that has been masked by sensationalist cynicism and populist rhetoric. Long term progress, especially in Industry 4.0 must start with a revolution of mind and maturity.
A quote from Eleanor Roosevelt: "Great minds discuss ideas, average minds discuss events, small minds discuss people".
The writer is the chief executive officer of Malaysia Automotive Institute.

Thursday, 11 January 2018

RESILIENCE - Staying positive is the strongest weapon Written by Madani Sahari

Last week, we received good news that was long overdue - the US dollar went below the RM4 mark for the first time since August 2016 while Bursa Malaysia's benchmark index FBM KLCI closed above the key psychological level of 1,800 points for the first time in the last three years. Exports in November also rose to a monthly high of RM83.5 billion, a 14.4 per cent rise from last year.
Before we start saying these are merely indicators, here's a thought. When the US dollar appreciated against the ringgit back in early 2015, we all started bracing for negative impacts. We planned scenarios, discussed business model adjustments, negotiated costs and forecast consumer sentiment - and they were all based on indicators.
If we can plan for tough times, the inverse must take place to plan for good times. Recent indications have shown that the worst is over and as a nation, it is very important to shed our pessimism and plan for new opportunities. Business models and operation structures will have the breathing space to implement bold and innovative moves aimed at creating or at least adapting to disruption.
My previous piece touched on the redefinition of mobility. This week, allow me to delve on this subject matter on a wider scope.
As mentioned, mobility will become and all-encompassing sector on its own, with the automotive industry evolving into the grander mobility sector. It would merge our daily activitiesinto solutions that are integrated into our daily transportation needs.
Lean practitioners have long argued that transportation does not add value between processes. When a work-in-progress part moves between two machines, the movement in itself adds little to the value addition of the product and is a waste that needs to be addressed.
When taken into the context of mobility, the thinking changes. Instead of removing transportation - which is rather impossible - value is instead integrated into transportation, bearing the new concept of mobility. There will be a holistic degree of connectivity beyond transport vehicles - health services, education, traffic management, commerce, emergency services and many others will be part and parcel of transportation and vice-versa.
Sectors such as construction, education, automotive and energy will look indistinguishable from each other as their interdependence will be much higher as segmentation would be harder to manage without coherent policy harmonisation.
Most of all, the blue ocean of business opportunities would become more open than ever, bearing new industries that could not possibly have been imagined before. As car - and bicycle - sharing would increase, logistical outsourcing becomes big business potential.
Health services that were traditionally in the domain of medical facilities would depend on emergency assistance, which is cloud-base. Energy generation may evolve into a home-based business. These are just the tip of iceberg of possibilities of the life-changing experiences.
Therefore, in the year that indicates a return to "business as usual", let's not just take relief from usual business. Let us invest more time, effort and resources to the rethinking of our industry. The investment must also be positive and bold, with the confidence of good times ahead.
There was a time when confidence in the automotive industry was at a low point. In the last three years, we proved that we were much bigger and more resilient than what was perceived. This year, that resilience is now our foundation - and that to make it to the top, bold steps must be taken when opportunities arise.
Just look at Steve Jobs, Ellon Musk or Bill Gates - they never tell stories of failure. They tell stories of how they rejected failure, and only saw opportunity. That is the strongest weapon of all - staying positive.
The writer is the chief executive officer of Malaysia Automotive Institute

Wednesday, 3 January 2018

INDUSTRY 4.0 - 2018 - The year mobility will be redefined

If we look through the largest automotive and technology exhibitions in the world last year, trends clearly indicate that the automotive industry is slowly evolving into a subset of the grander notion of mobility.
Mobility can be a hazy construct. While it used to define the mode of transport from one point to another, global technology and lifestyle trends are converging to redefine the very meaning of the world.
While there may be many versions of this future, one thing is certain - mobility will change in its meaning, and the automotive industry is among the main enablers of this evolution.
These trends emerged as we began moving into the fourth industrial revolution.
Connectivity is now deep rooted in the devices we depend on - the mobile phone for example, has converged hundreds of separate devices into the palm of our hands - technology that as trends show, are moving into all appliances, including our vehicles.
This will cause our lifestyles to be integrated into our transport modes as much as it is integrated into our homes.
What we define as our current destinations will then become part of our journeys.
Imagine a world where a patient in need of dialysis no longer goes to the hospital for treatment, but the treatment hardware is part of his journey to a holiday destination.
The automotive industry is evolving into the mobility industry, and the supply chain will evolve beyond vehicle parts and components.
There will be broader demands for business and jobs - one that look at higher value manufacturing, and also those that supply the connective services of this integrated, smart transportation grid.
While this idea may seem further than we can foresee, these are the core ideas being discussed by analysts, industrialists and regulators today - and for that matter, have become key highlights of the technology news dominating our information space.
With that said, the government has already initiated our nation's realignment.
To progress in the new technological world order, we've started thinking along a converged line. On a general level, the National Transformation 2050 programme (TN50) is placing its blueprint to envision a Malaysia that is in line with global trends for the next three decades.
As mobility and infrastructure will converge in the future, so must the ministries in the Malaysian government. In May last year, the cabinet tasked the International Trade and Industry Ministry, Science, Technology and Innovation Ministry and Higher Education Ministry to lead the formulation of a national policy framework on Industry 4.0, addressing the overarching need for digital infrastructures, human capital development, technology standards, funding and small and medium enterprise development.
National budgets have, for some time now, allocated funding for the development of Malaysia digital economy, such as the Digital Free Trade Zone (DTFZ).
The Malaysia Automotive Institute has embarked on programmes to enhance the capabilities of manufacturers and individual talents to work towards such an alignment with global trends.
However, national strategies must come with societal mobilisation - something possible only through connectivity of administrative policy with social mind-set.
We all have a part to play to bring the Malaysian economy to greater heights.
After all, national development is an inevitable responsibility of all Malaysias. It transcends cultural backgrounds, economic standing or political position. It is an agenda that all Malaysians should strive to fulfil.
To kick off the new year, let us commit to having meaningful discussions, ideas and dialogue that bring progress.
The policies, frameworks and implementation structures have been put in place - we are always ready to listen, guide and collaborate will all industry stakeholders towards achieving global competitiveness and upward social mobility.
Happy New Year!
The writer is the chief executive officer of Malaysia Automotive Institute.