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Pioneering Business Transformation

ENTERING THE CORPORATE CHAIN. Pioneering Business Transformation. SUPPLY. World Population & demand. Vision |. USA: 314 million. China: 1.3 bn. MALAYSIA: 28 million. Mission |. INDIA: 1.2 bn. Indonesia: 238 million. As at 2010-2011.

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Pioneering Business Transformation

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  1. ENTERING THE CORPORATE CHAIN Pioneering Business Transformation SUPPLY

  2. World Population & demand Vision | USA: 314 million China: 1.3bn MALAYSIA: 28 million Mission | INDIA: 1.2bn Indonesia: 238 million As at 2010-2011 With a population of merely about 28 million, Malaysia can’t afford to rely on domestic consumption only to achieve high-income nation status by 2020. Internationalisationis crucial…

  3. Global Imports Demand To strategise entry into a supply chain, we must understand the current demand and supply scenario… • Demand from developing economies is a major driver of world trade with imports only 14%lesser than that of developed economies • Increasing need to measure added-valuechains as trade is becoming increasingly globalised where many products are not produced in a single location. Vision | Promote the development of competitive, innovative and resilient SMEs through effective coordination and provision of business support Source: World Trade Organisation (April, 2012)

  4. Supply-side: Malaysia

  5. 2012 World Competitive Ranking • Malaysia’s overall ranking has improved from 16th (2011) to 14th (2012) position: • Business Efficiency: 6th from 14th(2011) • Economic Performance: 10th from 7th(2011) • Government Efficiency: 13th from 17th (2011) • Infrastructure: 26th from 27th (2011) Promote the development of competitive, innovative and resilient SMEs through effective coordination and provision of business support Legends: Comparison of 2011 & 2012 rankings Improve Fall Unchange Source: IMD World Competitiveness Yearbook 2012 (31st May 2012)

  6. Supply chain hierarchy Moving up the supply chain Promote the development of competitive, innovative and resilient SMEs through effective coordination and provision of business support Source:Economic Planning Unit Malaysia and The World Bank (July 2011)

  7. Strategies & Initiatives to enter and move up the supply chain

  8. Ratings, Certifications & Awards Serve as filter enabling corporations and investors to shortlist high performing or innovative SMEs faster… Promote the development of competitive, innovative and resilient SMEs through effective coordination and provision of business support

  9. SME COMPETITIVENESS RATING FOR ENHANCEMENT (SCORE)

  10. What is SCORE? What is SCORE? • A diagnostic tool to rate and enhance competitiveness of SMEs based on their performances and capabilities. • Developed in August 2007. Example of Radar Diagram for 3-Star company Function • Identify strengths and weaknesses for improvements; and • Facilitate linkages. 7 Parameters • Business Performance • Financial Capability • Management Capability • Production Capability Characteristics • Technical • capability • Quality System • Innovation Analysis: Weak in financial capability Assistance: Requires training in financial management & improvement in quality management • 0 – 2 : Very basic business operation • 3 – 5 : Competitive and export-ready • companies Collaborators • PUNB • CIDB • MINDEF • TPM • MDEC • PSDC • SME Bank • TM • MPC • HDC • NCIA • MTIB

  11. Why SCORE your company? Identify strengths and weaknesses Facilitate linkages - large companies / MNCs Provide better market access for export-ready companies

  12. Example of Women-owned SMEs benefitting from SCORE … Recommendations Assistance Given Improvements from SME Corp.’s Assistances Outcome • Grant on Product & Process worth EUR50,000 (2009) • Grant on Certification worth EUR20,000(2006) • Enhancement on Quality System & Standards. • Develop a comprehensive operating procedures system. • Development of process technology utilisation. • Double the annual sales within 5 years. • Awarded as favoured vendor by TNB. • Product Certification for 2 products (OBM). • Awarded ISO9001:2008 in 2010 • Increment in improvement activities/tools. Improvement in SCORE Rating

  13. Industrial Linkages • Facilitating access to market by integrating SMEs into the supply chain of the large companies • Concentration on high value-add portionof the supply chain… Manufacturing Retail International Local

  14. Success Stories… SMEs GLCs 10 1-InnoCERT co. awarded contracts from Sime Darby valued atEUR16 million 2 1-InnoCERT companies awarded contracts valued at EUR8 million

  15. Success Stories…cont’d SMEs GLCs EUR10 million contract EUR7 million contract EUR3 million contract EUR1 million contract

  16. Success Stories…cont’d SMEs MNCs/GLCs EUR126,000 contract EUR132,000 contract Hong Leong Manufacturing Group

  17. Integrating Into International Supply Chain Composites Technology Research Malaysia Aero Composites Spirit AeroSystems Malaysia Sdn Bhd SME Aerospace Sdn Bhd

  18. Conclusion For effective implementation in Global Supply Chain … 18

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