Abstract
This chapter focuses on the 1Malaysia Supply Chain framework that acts as the mover that enables the whole 1Malaysia concept to be realized and implemented. It will highlight an in-depth review of the 1MSC. The 1MSC concept is derived from the integration between all the key players in the end-to-end supply chain process. This is where the stakeholders have the same goals in ensuring that the end-to-end process of supply chain is achieved. The 1MSC can be considered as an umbrella that governs the whole supply chain process. The driving force behind the realization of this concept is the strong foundation of its supply chain which integrates different parties as one. This chapter introduces the concept of national development incubator (NDI) where it combines the primary supply chain elements to achieve sustainable business and supply chain performance.
TopBackground
Manufacturing industry is the biggest contributor to Malaysia’s economic growth. According to a report from Malaysia External Trade Development Corporation (MATRADE), the Electrical & Electronics (E&E) industry is one of the leading industries, contributing 24.5 per cent to the manufacturing sector in the Malaysia’s Gross Domestic Product (GDP). In 2014, Malaysia’s exports of E&E products was valued at RM231.23 billion, with 49.2 per cent share of manufactured goods exports and 32.9 per cent share of Malaysia’s total exports.
Although the manufacturing industry has flourished, there are several challenges that the industry faces such as rising operational cost, scalability and rapid technology advancements. In addition, there is fierce competition between rival supply chain networks in the industry (Lo & Power, 2010). Currently, manufacturing industries are resorting to outsourcing the non-value added activities to contract manufacturers or suppliers. Most manufacturing companies have adopted to integrate their supply chain in order to obtain visibility into the supplier’s deliverables and to detect possible issues upfront. While with supply chain integration (SCI) the operational cost can be lowered to an extent, it still does not address the gap of limited number of capable suppliers in the market to support the growing industrial needs. Thus, collaborative relationship with suppliers is needed (Stock, Boyer & Harmon, 2010).
Lack of technological expertise in a region have also becomes a bottleneck that hinders manufacturer’s speed to market an innovation. These challenges raise a pressing need to develop an effective and efficient SCI in a supply chain network (Huang, Yen & Liu, 2014). A successful SCI depends on information, coordination, and organizational linkage (Lee, 2000). However, the empirical results of SCI in the literature have been inconsistent. There is little evidence that integration provide improvements in effectiveness and efficiency (Fawcett & Magnan, 2002; Bagchi, Chun Ha & Skjoett-Larsen, 2005; Fabbe-Costes & Jahre, 2007). This is due to lack of clear definition of SCI and variation of definitions and interpretation of the concept (Fabbe-Costes & Jahre, 2007; Van der Vaart & Van Donk, 2008). Thus, scholars need to develop a model encompassing factors of SCI to benefit both practitioners and scholars (Zhang, Gunasekaran & Wang, 2015). To address this issue, this chapter took the challenge and proposes nationwide SCI by adopting the 1Malaysia concept.
Key Terms in this Chapter
Kedai Rakyat 1 Malaysia: Mini market format providing various basic necessities at low prices.
Supply Chain Integration: Information, coordination, and organizational linkage across supply chain activities among partners.
Sustainable Development: Achieving goal for social, economy and environment.
National Development Incubator: Governing body that oversees the integration of all key players.
1 Malaysia Supply Chain: Collaborated and moved towards meeting the needs of all its stakeholders and providing platform to support business to improve value chains and improving sustainable practices.
New Economic Model: Malaysian plan to increase per capita income.