AUTOMOTIVE INDUSTRY IN MALAYSIA: INTRODUCTION

INTRODUCTION

Malaysia which is located in the centre of ASEAN region with a population of more than 28 million people offers vast opportunities for global automotive and component manufacturers to set up manufacturing and distribution operations in this country. External environment of business namely: (i) economic stability; (ii) culture of the country; (iii) research and development of technology; (iv) politic and law stability; and (v) global participation have attracted major international automotive and component manufacturers to invest in Malaysia. Currently, according to Malaysia’s Automotive Industry (MAI, 2010), there are 28 manufacturing and assembly plants producing passenger and commercial vehicles, composite body sports cars as well as motorcycles and scooters. These plants have a total installed capacity of approximately 963,300 passenger and commercial vehicles and about 1 million motorcycles per year, with production catering primarily for the domestic market. Moving forward into 2012, Malaysia Automotive Institute (2012) foresees a brighter automotive sales and production despite the uncertain economic environment. While sales in the US are set to continue a steady recovery in 2012, the emerging countries such as China and India are expected to continue outperforming the developed countries. Elsewhere within the ASEAN countries, Thailand and Indonesia are also expected to continue their strong growth this year in line with the GDP forecasted by respective countries, while Malaysia forecasts at least a 5.1% growth in 2012. As such, the total industry volume (TIV) is also likely to flourish in 2012 due to high correlation between gross domestic product (GDP) and TIV.

The concepts of sustaining lean improvements (SLI) have been studied in particular by Schlichting (2009) and Murti (2009). Schlichting (2009) focus on investigate the root causes that lead to a time dependent loss of lean improvements among manufacturing organizations from three different perspectives such as standard work, employee involvement and continuous improvement. In addition, in for create standards, one should implement standard work all across the shop floor and in addition use standard improvement to ensure that further development will not distort the standards. In order to achieve employee involvement, the finding suggested visual management tools to empower every employee by making information available as well as kaizen events to teach employees about lean and train their problem solving skills (Schlichting (2009). In conjunction with job rotation, which enables the employees to cooperate on problem solutions, these tools ensure thorough employee involvement which will increase the buy-in into the lean improvement ideas and thereby make them more sustainable. At last, continuous improvement supports the sustainability of lean implementations by constantly challenging the current state process, thereby not allowing for a loss of focus on the already implemented changes.

Meanwhile, Murti (2009) has seeks to study the lean journeys of nine New Zealand companies to establish key inhibitors and enablers to sustaining lean manufacturing sector in New Zealand. The companies were assessed for lean sustainability using a recognized sustainability model. The findings showed that many companies experienced good initial gains from implementation lean but the majority failed to sustain these improvements. These problem were; erroneous understanding of lean, poor change strategy, poor senior management team commitment, New Zealand Trade and Enterprise funding pushing change, high staff turnover, high staff resistance and failure to develop the lean champion’s capabilities. As a conclusion, lean improvements were not sustained across New Zealand manufacturing companies except one case study company looked likely to sustain improvements.

In Malaysian automotive industry, the concept of SLI has change and becoming more stable in our country and industries. As a good example is, Malaysia has made significant progress, with Proton unveiling its first locally-designed model in 2000 and developing its own engine in 2002. The new Proton plant in Tanjung Malim, Perak is highly automated, employing robotic technology, and is designed for high volume production and efficiency, using lean manufacturing processes. Therefore, the complexities involved in the above-mentioned focus areas for SLI, optimized solution, and corresponding underlying models, are necessary. Thus, this paper presents a review of current trends for achieving sustainability at the lean practices and performance, with a focus on modeling and optimization aspect.