THE concept of global supply chain among Malaysian companies is not new as we have implemented it for more than 50 years. What is new, however, is the growing expectation on how these companies address the objectives of high income, sustainability and inclusiveness under the New Economic Model (NEM) agenda.
Traditionally, a company's main objective is to achieve economic goal only. However, moving along with the NEM agenda, companies need to ensure they are operating to fulfill social objectives - aiming for targeted economic growth while simultaneously contributing towards equally distributed value-added outputs, services and among all stakeholders involved in the supply chain.
Many global business players such as Intel, Dell, and Motorola, including Malaysian-owned companies such as Siltera, Globetronics and Itramas, have successfully transformed their supply chain.
The survival and success of their supply chain is about finding their niche in the global supply chain, allowing them to competitively and sustainably grow businesses.
Consequently, Malaysia has now achieved middle-income and high-income status as companies have established and become part of the global supply chain.
Despite Malaysia's strong reliance on the global supply chain for economic efficiencies, many stakeholders feel that they are not receiving an equal and economically optimum solution.
For instance, the private sector feels business opportunities are limited and the MNCs are increasingly investing in other foreign countries instead of in Malaysia. The SMEs are struggling to get government loans and other incentives, and lack of awareness of the appropriate procedures; in many instances, they are not effectively linked to the global supply chain.
Government-linked companies (GLCs) also face difficulties in achieving economic value-adds due to the lack of skilled and knowledge workers, technology capability and innovation.
For the GLCs, operating their businesses with social objectives in mind is imperative. In order to achieve this, equal opportunities and access to these opportunities have to be transparent within the whole supply chain.
The 1Malaysia Supply Chain implies that all stakeholders in a supply chain are required to work together and help each other to achieve economic and social objectives underlined by their companies, and in that respect, create greater economies of scale to achieve higher productivity. In order to achieve NEM's objectives, Malaysians need to work together so that all players can compete globally and directly generate wealth and income to benefit all Malaysians.
The broad concept of 1Malaysia, based on the principle of "People First, Performance Now", is to bring the country's multi-racial, multi-ethnic and multi-religious people together as "one" to create a united, harmonious, strong and successful nation
In fact, when properly applied, the 1Malaysia Supply Chain strategy of "Simplify, Focus and Integrate" will see the whole government network integrated and geared towards cooperating to meet the needs of all its stakeholders, while at the same time, providing an environment to support business in improving value chains, finding new market niches and as well as improving sustainable practices.
Hence, in reality, the success of 1Malaysia Supply Chain means the establishment of a fully integrated global supply-chain solution, but this reality could only be achievable when we strengthen our domestic supply chain and change the way we think and operate.
Most companies are still in the process of migrating their traditional domestic platforms to cross-border standards and a successful migration is not easily achievable.
Nevertheless, a high hurdle which separates the myth from the reality we desire, could be lowered, levelled and eventually eliminated.
1Malaysia Supply Chain is about the integration of all players in any supply chain (such as MNCs, SMEs, government, NGOs, people), and the understanding that they have a stake in Malaysia's success and they must cooperate to improve the efficiency and connectivity of the economy. Bringing these players together and urging them towards a common goal is the key.
Thus, the concept of the 1Malaysia Supply Chain is about all players equally treating his or her fellow in the chain and equally sharing the resources available - knowledge, expertise, facilities etc.
Wealth and income creation in any developed country are gathered from enhancing the value of the supply chain among the players.
Within the manufacturing sector, the multinational corporations (MNCs) based in Malaysia are the backbone for supplying the world with Malaysian products.
SMEs act as feeders to the MNCs and directly involved in the global supply chain. Non-governmental organisations (NGOs), government or individual workers and government bodies should be integrated with MNCs and SMEs within the supply chain.
The fullest extent of Malaysia's economic transformation programme and the success of Malaysian firms in becoming global players and producing competitive goods and services depend on the momentum of such integration in supporting all stakeholders to derive maximum benefits in terms of economic efficiencies.
The writer is Associate Professor at Graduate School of Business, Universiti Sains Malaysia.
