BUSINESS INACTION FMM - COVID-19
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APR - JUNE 2020 www.fmm.org.my KDN NO.PP 16730/08/2012 (030376)
BUSINESS
IN ACTION FMM @
COVID-19
RECOVERING FROM A CRISIS AND GROWING STRONGER
APR - JUNE 2020 www.fmm.org.my KDN NO.PP 16730/08/2012 (030376)
BUSINESS
IN ACTION FMM @
EDITORIAL ON THE COVER
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BUSINESS IN ACTION @ FMM
2 APR - JUNE 2020
CONTENTS
08
COVER STORY
BUILDING THE RIGHT
BUSINESS CONTINUITY
PLAN
The emergence of COVID-19
set in motion a global
crisis that was declared
a pandemic by WHO.
While the economic outlook
remains cautious for the
rest of the year, it’s time
for businesses to regain its
strength.
14 20
TECHNOLOGY TRAINING & DEVELOPMENT
REBUILDING A SUPPLY CHAIN PERSPECTIVE IN MITIGATING
CAPABILITIES WITH COVID-19
TECHNOLOGY
As businesses maneuver operations in the new-normal, it is
Manufacturers should leverage important that goods and services continue to be moved from
technology to achieve more sources to the final end-users. But how transporters work is a
fluid processes and increase major public concern.
competitive edge.
16 18
BRANDING SUSTAINABILITY
BRAND MANAGEMENT GOOD GOVERNANCE
TO RECOVER AND FOR GLOBAL SUCCESS
GROW
Compliance to the MACC
Sustaining brand Act and the new Section 17A
communication during a time will position manufacturers as
of crisis is important despite viable suppliers for the global
the uncertainty. market.
BUSINESS IN ACTION
APR - JUNE 2020 PRESIDENT’S MESSAGE 3
RECOVERING AND GROWING
STRONGER
focused dialogues with the government
agencies involved. We also appreciate
all your questions during these times,
especially in regards to assistance
available and people management as
it is a reflection of your commitment to
keep the businesses going for your teams
and the nation.
We will continue to engage with
members and the Government. This
edition will focus very much on helping
businesses towards recovery. We will
talk about business continuity in its many
phases and immediate steps to be taken
to ensure that the next six months to a
year is dedicated to rebuilding strengths,
expanding opportunities and most
importantly, being prepared for similar
situations of scale in the future.
As your businesses return to normal
operating hours and manpower
capacities, we urge you to adhere to all
regulations set by the Government, which
FMM will duly update in our weekly
e-bulletins and circulars to members.
Let’s continue this journey to recovery
together and we hope to continue
receiving feedback and valuable insights
from members. May we strictly adhere to the
W
e started the year with confidence essential services. SOP’s issued by MKN/MOH and upheld the
albeit conversations surrounding The last three months has been ‘new normal’ in order to acheive the target of
the COVID-19. But, as we challenging to say the least for many zero cases and succeed in our journey towards
entered the month of March, globally, businesses and the global economy recovery.
lives and livelihoods changed. Fearing as a whole. As a representative of the
the worst, for the first time, Malaysians manufacturing industry in Malaysia, we
experienced a national movement would like to thank all our members for Sincerely,
control order. As countries around the keeping the communication lines open
globe began taking similar steps, a new and offering us feedback and ideas at all Tan Sri Dato’ Soh Thian Lai
situation emerged where the world was times. This helped us draw up relevant President
closed for business with the exception of recovery wish lists and have more Federation of Malaysian Manufacturers
BUSINESS IN ACTION @ FMM
4 GLOBAL TRENDS APR - JUNE 2020
2020 IS CHANGING THE
GLOBAL MANUFACTURING
LANDSCAPE
As global markets begin taking
action plans to revive from the slump,
the growing trends spotted for high yield
manufacturing are 5G technology, data
analytics and big data skills.
Emerging technologies that will
continue to grow this decade are:
Drone Delivery
5G Delivery Tools
G
lobal manufacturing has
contracted since the arrival of
the pandemic in early 2020.
The new decade began with
health concerns and as the
pandemic peaked in the month of March,
manufacturers worldwide faced shrinking Agile Robots for Mass Production
demand, reduced workforce requirements The USA is taking steps to move their
and major disruptions to their supply production facilities out of China. A
chain in a global bid to control the number of manufacturers from Europe
spread of the pandemic. are planning a similar move, precipitated
by the COVID-19 pandemic which had
Euro-zone manufacturing shrank for a severely disrupted their supply chain and
fifth month in June, with the challenging production located in China. The move
economic environment leading to another away from China is further compounded
drop in orders. In the United Kingdom, by multiple countries in Asia and the USA Augmented Reality Tools
the Purchasing Managers Index dropped announcing new incentives for returning
to a six-year low. That’s partly an manufacturers.
unwinding of Brexit stockpiling earlier in
the year, but the report showed a decline Another large market, India, despite
in business optimism. its large labour force, is looking to
pursue Industry 4.0 to manage their
Sector-specific issues are also taking production facilities. Areas for adoption
a toll. Germany is feeling the pain of include predictive maintenance,
turmoil in the automotive industry, while connected supply chain, reduced energy Automotive Advancement for Future-proof
waning demand for electronics is hitting consumption, production optimisation, Vehicles
an industry that is vital to many Asian lower price of sensors and high
economies. That is on top of the trade computing needs. Though India started
friction between the world’s two biggest off the year strong, COVID-19 has
economies, the United States of America raised alarming concerns for India’s
(USA) and China, which is far from being manufacturing as the global demand and
resolved despite preliminary agreements supply chain system becomes disrupted
to resume negotiations. or comes to a halt.
DATA AND ROBOTICS
PERFECTLY SYNCHRONIZED.
Our SynQ software delivers data-driven intelligence that empowers your business
by synchronizing the performance of your people, processes and machines.
The result is a level of efficiency and performance you never thought possible.
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BUSINESS IN ACTION @ FMM
6 LOCAL UPDATES APR - JUNE 2020
ECONOMIC STIMULUS
PACKAGES FOR MANUFACTURERS
manufactured at Bosch Automotive
Electronics lab in Dresden, Germany.
According to Bosch Malaysia, the final
testing facility in Penang will be the first
of its kind for the company in Southeast
Asia. The plant will also house research
and design, and training facilities.
Penang is a semiconductor hub as
it contributes eight percent of output
globally. It has been home to Bosch since
1972.
T
he Government announced the Personal Protective Equipment (PPE)
three Economic Stimulus manufacturing sector have expanded in
Packages and initiatives to help the first half of 2020 due to a surge in
Malaysian businesses weather demand and shortage of supply during
through COVID-19 pandemic. the core spread of the pandemic.
In its continuing effort to strengthen
the economy, Prime Minister Tan Sri Glove producers in Malaysia have
Muhyiddin Yassin unveiled the Short-term experienced double digit growth with
Economic Recovery Plan (PENJANA) on orders spilling over to 2021. The
June 5, 2020. Malaysian Rubber Glove Manufacturers
Association (MARGMA) estimated global
Among the key highlights for the demand for rubber gloves to be at
manufacturing sector on tax-related around 330 billion units. MARGMA also
measures contained in PENJANA are: said it expected to export 225 billion
• New foreign investments with units worth RM20 billion this year, up
capital investment of between from 170 billion units valued at RM17.3
RM300 million to RM500 million billion last year, which is about 65
could receive a 10-year zero percent of the total world requirement.
percent tax rate.
• New foreign investments with While medical equipment and
capital investment exceeding PPE manufacturers focus on their core
RM500 million could enjoy a 15- activities, other players especially those
year zero percent tax rate. in the technology field have stepped up
• 100% Investment Tax Allowance efforts in diversifying their capabilities.
for a period of 3 years to 3D printing providers and even
existing foreign companies PROTON began producing face shields
located in Malaysia which are and fashion designers have started
transfering their manufacturing production centres for medical gowns,
facilities into Malaysia with opening up possibilities for cross industry
captial investment of above support.
RM300 million.
Bosch, a global supplier of
COVID-19 protective gear technology and services, is set to build its
manufacturing soar fourth manufacturing facility in Penang.
The first series of production is expected
While the global economy finds its to start in 2023, primarily focusing
recovery path, some local players in on the final testing of components
BUSINESS IN ACTION @ FMM
APR - JUNE 2020 COVID 19 SPECIAL 7
FMM INITIATIVES DURING MCO
& CMCO PERIOD
F
MM has weathered many economic and industrial topics ranging from health screening to labour requirements and
challenges alongside its members. However, 2020 brought working hours permitted.
an unprecedented crisis that took a toll on the global
landscape. While FMM focused on keeping members In terms of government engagement, FMM took into account
informed, it also took great measures in engaging with the the incentives announced in the economic stimulus packages and
government and relevant authorities to ensure the support system participated in meetings or dialogues to address the gaps in the
for the industry coincides with the current needs of manufacturers initiatives and support required by the industry players.
in Malaysia regardless of industry and size.
All FMM initiatives were documented through circulars,
Throughout the Movement Control Order (MCO) and e-bulletins, press releases, surveys and letters to the government.
Conditional Movement Control Order (CMCO), the main focus FMM members also came together to give back to our frontliners
was on Standard Operating Procedures (SOPs) for manufacturers through donations in kind, pooling together products such as food
of essential products & services and as more industries reopened, and beverages, personal protective equipment and medical needs
labour, and health and safety SOPs became the key focus. FMM in the country.
offered consistent advisory to help clear the confusion on various Below is a summary of FMM’s efforts during the period:
Supporting MITI and work closely with
KPDNKK, MOA, MOT, RMCD to ensure
6 Surveys among members
uninterrupted supply of essential goods to
hypermarkets and stores
23 FMM Meetings with Ministries and 22 Press Responses issued by FMM
Agencies
32 FMM Members’ Advisory to 5 Feedback to Government Agencies
and Others
members
7 FMM Circulars relating to Government RM49,840 worth of electrical
Policies & Regulations and Customs goods donated to Hospital Sg Buloh
Achievements (HR, Logistics and Customs)
12 FMM Press Statements
1. Exemption on Import Duty and Sales Tax for Face Mask
2. Waiver of Storage Charges and Removal Charges for
Non-Essential Cargo
3. Submission of returns to RMCD
4. Import & Excise Duties Exemption to Hand Sanitiser Manufacturer
22 Letters to Government on FMM’s 5. MOHR Permission for Company Human Resource/Finance Personnel to
Enter Workplace to Process Payroll
Views
6. Four Windows For Port Clearance for ALL Import & Export Cargo
7. Waiver of Penalty on Late Submission of Returns and Full Remittance of
Penalties
BUSINESS IN ACTION
8 COVER STORY APR - JUNE 2020
BUILDING THE
RIGHT BUSINESS
CONTINUITY PLAN
T
his year began with a Many industries have been deeply Stimulus Packages by the Government
positive outlook for the local affected by the pandemic with some will also be fully disbursed by then.
manufacturing industry. Many sectors coming to a standstill over the
expected to attract higher last three months, namely tourism. There Commenting on this year’s outlook
investments, exports were has also been a drop in demand for for the manufacturing industry, FMM
predicted to be on the rise and experts commodities such as palm oil, crude oil President Tan Sri Dato’ Soh Thian Lai
predicted national gross domestic and natural gas. said, “Much like our nation is under the
product (GDP) growth at 4.5 percent. recovery phase, each industry is also
Other economic impacts include repairing its loss of business, restoring
However, the emergence of unemployment which rose to 3.5 percent its supply chains and aiming to bring
COVID-19 which was pronounced as between the months of January to March back production to its normal rhythm.
a pandemic in March 2020 by the this year, due to six weeks of strict social The most important element for this is
World Health Organisation (WHO) set restrictions. In comparison, the previous the right business continuity plan which
into motion an unprecedented global quarter saw an unemployment rate of needs to take into consideration our
crisis that included more than 10 million 3.2 percent, based on figures from the current landscape, a realistic goal to
infections in more than 213 countries Department of Statistics achieve and the tools needed while
worldwide to-date, government instructed keeping a close watch on the capabilities
lockdowns, non-essential business Export figures dropped 23.7 percent at hand and the health and safety of our
shutdowns over multiple weeks and in April compared to the same period workforce and partners.”
world economies coming to a standstill. in 2019. Manufacturing sales stood
at RM75.8 billion for the same month, Business continuity plans are
In April 2020, Bank Negara plunging 33 percent, in comparison to essentially a roadmap to help companies
Malaysia (BNM) projected this year’s RM113.1 billion reported a year ago. navigate the new normal and keep
GDP will dip to depressingly low ranges businesses afloat and regain its strength
from -2 percent to 0.5 percent, against The outlook for the rest of the year while the world economy recovers.
a highly challenging global economic remains cautious as loan moratorium The plan must essentially include the
outlook due mainly to the COVID-19 offered by banks end in September this 4Ps- People, Processes, Profits and
pandemic. year. Incentives from the three Economic Partnerships.9
BUSINESS IN ACTION @ FMM
10 COVER STORY APR - JUNE 2020
PEOPLE
PROCESSES
PARTNERSHIP
PROFIT
The first step to building a good recovery period, the focus on people cuts This also applies for operational
business continuity plan is charting and across multiple issues including safety and management functions that support
understanding your risk profile in each at the workplace, containment plans production as remote working was slow
area. A business needs to study the risk for infections, back to work motivation, to take effect due to low preparedness
factors, potential internal and external turnover concerns, discrimination against by most traditional settings to activate
challenges, current and expected cost an infected patient, education on social work-from-home capabilities for their
impacts, policy and governance and distancing and physical rearrangement staff. Access to work tools were not
its network of partners. Developing a of workspace to comply with the SOP. readily available and many processes
good risk profile can help businesses were put on hold causing workloads to
focus on preparedness, an element many PROCESSES increase during the course of the MCO
companies lacked when the COVID-19 and CMCO.
pandemic hit, due to the unprecedented In the manufacturing industry,
scale of such a crisis in recent times. processes can be multi layered and PROFIT
intricate. Manufacturers need to group
PEOPLE processes into broader categories like Cash flow has been the biggest
plant facilities and machinery as well focus point of all businesses. Businesses
“Lives and livelihoods have been as stock and raw materials in order to revised their profit forecasts to more
two major focuses since the pandemic tackle challenges efficiently. conservative numbers over the last six
reached us. As the Movement Control months. SME manufacturers in the non-
Order (MCO) and Conditional “Technology has come to the forefront essential fields are targeting to break
Movement Control Order (CMCO) took of process reviews for manufacturers. even or hope to minimise losses.
on a life of its own by restricting work There is active planning and investment
activities, putting health over all else into IoT, AI and automation especially The Government’s Economic Stimulus
became inevitable. Manufacturers locally during the downtime of production. Plans announced multiple support
reached out to the Government with the Our manufacturing players have begun initiatives for the industry including loan
hopes of keeping their workforce and looking at measures to leverage on moratorium, soft loans, tax exemptions
still manage costs. Numerous rounds technology for business advantage, cost and guarantee schemes.
of suggestions and meetings between management and quicker recovery from
manufacturers – FMM – MITI – MOH – similar situations in the future,” Tan Sri Profit evaluations should not be
MOHR, resulted in suggestions for wage Dato’ Soh enthused. restricted to internal factors but also
subsidies, deferments, back to work external factors. Market conditions
Standard Operating Procedures (SOPs) Technologies assimilated into should be the primary focus as stabilising
during CMCO and more to be included processes will reap rewards in the production will not reap any benefits
in the government’s announcements,” long run as these rely on analytics without market demand and purchases.
said Tan Sri Dato’ Soh. and predictive technology that can be Customers’ business health, national
adapted according to changes on the policies, export demand and locations
In a business continuity plan production floor, business directions, to determine virus risk should be studied
especially for the recovery and post global happenings and local regulations. and managed with contingency plansBUSINESS IN ACTION @ FMM
APR - JUNE 2020 COVER STORY 11
Profit estimates Deferment of Tax deduction/ Accelerated
Stamp duty
for 2020 can be monthly income capital allowances capital allowances
exemption on loan
revised without tax installment on disposable/ over a 2-year period
agreement
penalty payments for SMEs non-disposable on machinery
from March to
for a period of PPE and equipment
December
3 months starting expenses including ICT
2020
from April 2020
Discount between Free internet 6 months rental/
Tax deduction of Monthly wage
15% and 50% in subscription from lease exemption
up to RM300,000 subsidy of RM600
stages on monthly April 2020 until for tenants of
on renovation for 3 months for
electricity bills for end of MCO premises owned by
and refurbishment employees earning
6 months starting Government/State
cost from March to less than
from April 2020 Government/Local
December 2020 RM4,000/month
Authorities/GLCs
EPF contribution EPF contribution by HRDF to fund an 6 months
by employees employer: options HRDF levy additional 40,000 payment
reduced to 7% for deferral, exemption for a employees moratorium
starting from restructuring and period of 6 comprising
April 1, 2020 until rescheduling of months starting restructuring and
December 31, 2020 payments from April 2020 rescheduling loans
6 months payment
RM6.8 billion for Microcredit facility
moratorium from RM5 billion Automation and
all economic at 2% interest rate
April 2020 on loans Special Relief Digitalisation
sectors (AES) to and no collateral
from TEKUN, MARA, facility at 3.5% facility at interest
improve SMEs by BSN
co-operative and interest rate by rate of 3.75%
access to
government BNM for SMEs by BNM for SMEs
financing
agencies providing
financing to SMES
Agrofood facility Working Capital CGC financing Securities
at 3.75% financing Guarantee Scheme through BisMula-I Guarantee Scheme Commission
rate by BNM for by Danajamin and BizWanita-I through SJPP with Co-Investment
Malaysian SMEs from May to for SMEs with 80% guarantee rate Fund for investment
December business track at early-stage and
2020 record less than growth-stage
4 years Malaysian
companies
Grant for small Wider network RM20 million Expansion of
Subsidised short
enterprises to of food storage funds for TVET scope of value
courses in digital
sell and market facilities by FAMA skills training added activities
skills and highly
products on conducted by State carried out in LMW
skilled courses
e-commerce Skill Development and FIZ
platforms Centre (SSDC)
Highlights of Malaysia’s Economic Stimulus Package for the Manufacturing Sector
suitable for the industry. These data can crisis. With global logistic operations routes, implementing stricter regulations
also lead to new market discovery or grounded, production processes were when handling goods to reduce risks and
drive the need to innovate new products paused resulting in delayed orders being alert about government regulations
with existing capacity. and an impact to the bottom line of the to comply efficiently and reduce delays.
company. As the recovery period is
Next is a study of the supply chain. underway, businesses need to explore Society and economic impact is
This was another major challenge for mitigation tactics adopted by global another key element in the pursuit of
manufacturers across the globe as players including alternative suppliers securing profit. If the workforce in a
their suppliers were in the heart of this at home countries, expansion of supply facility is large, there is concern of livesBUSINESS IN ACTION @ FMM
12 COVER STORY APR - JUNE 2020
Public utilities Public
e.g energy, Infrastructure
Business e.g Political
growth water Third Party telecommunications and
partnership e.g regulatory
competitors environment
at risk especially if it is a non-essential markets, local intelligence and partners lines to support the demand of personal
industry. Issues like these can be pursued have always proved essential.” protective equipment (PPE) in Malaysia.
and magnified if not carefully managed.
While organisations explore the “Companies need a solid business
“Economic impact takes into partnerships for business continuity, continuity plan and crisis recovery
account the current market conditions there is a need to look at all contributing plan that can make bouncing back
and demand while looking at risks factors to the business besides strategic much easier moving forward. While
of unemployment in the industry and partnerships as well. globally impacting incidents like the
potential criminal threats against the virus spread is not within human control
industry with rise in cybercrimes targeting Engagement and consistent updating and have to be managed as led by the
data of different industries,” added Tan of facilities provided by these partners government, businesses need to put in
Sri Dato’ Soh. will help businesses plan more accurately place contingency plans and mitigation
over the next year. tactics so the blow does not wipe out
PARTNERSHIP their presence in the market.
On the whole, all businesses have
In a bid to increase Malaysia’s gone through a cycle of incidents As illustrated in the comprehensive
attractiveness as an investment that were both unexpected and chart by business services consultancy,
destination, the government recently unprecedented, leaving little room PwC, the disruption must be followed
announced zero percent tax rates for a for reference of solutions or quick by immediate mobilisation and action to
period of 10 to 15 years. This is being innovation. However, several local protect people and cash flow followed by
offered to foreign companies wishing to companies still stepped up their game recovery with reconfiguration of business
relocate to Malaysia. and found opportunities in times of with quick decision making. This must be
crisis. E-commerce and logistics rose to followed by building stronger competitive
This falls in line with research firms the forefront to join the likes of essential advantage and resilience with a well
and media observing global trends of industries and innovated along the analysed continuity framework that
companies in the US and Europe actively way to drum up their unique selling can help survival in the long run. It is
seeking to spread out their production proposition (USP) or completely recreated indeed a time for the fittest to weather
to other ASEAN countries based on the their presence to fit the demand of the these conditions and grow stronger,”
local handling of the pandemic. ASEAN day. There are also smaller companies concluded Tan Sri Dato’ Soh.
countries are also jumping onto the who turned into makeshift production
bandwagon by announcing incremental
incentives for foreign investors to recover
their economies.
Disruption
The incentives and further opening Coordinate for action
of markets across the region can give Quickly mobilise and initiate mitigation
actions to confirm business continuity
Malaysian manufacturers a chance to
find alternatives for their supply chain
or even forge strategic partnerships that
can benefit their business and build their
market reach. Resilience Recovery
Embrace and manage capabilities you wish you Get out of the gate smartly and swiftly
had today Rebalance the business, recover with
Tan Sri Dato’ Soh further shared, Establish resilience capabilities to better sense and agility and rebound faster than
respond to the new normal and extreme disruption competitors
“We need to strengthen our sales and
export numbers over the next six months
to a year. Working with regional and
global businesses which can compliment Competitive Advantage
or enhance locally produced components Capitalise on the new normal
and products will help us achieve this Leapfrog weaker competition, strengthen
financials, and help capitalise on new market
objective. Also for entering new export opportunities and competitive repositioningBUSINESS IN ACTION @ FMM
APR - JUNE 2020 OPINION 13
YOUR SAY:
DEVELOPING
BUSINESS
RESILIENCE
AFTER THE
PANDEMIC IR TER LEONG LENG - CEO Top-Mech Provincial MICHELLE HAH MEI KIAN - Director Fire Fighter
Sdn Bhd Industry Sdn Bhd
B
usinesses are striving to stay afloat Challenge’ at home and stay healthy. We multiple scenarios to understand the
as we recover from the impact also engaged staff through a cooking potential impact on financial performance
of the pandemic. We compiled competition named ‘Nampak Macam and assess how long the impact may
opinions from Top-Mech Provincial Sedap’. During the work-from-home continue. If the impact is material and
Sdn Bhd CEO Ir Ter Leong Leng period, we were fully focussed on our former budget assumptions and business
(TLL) and Fire Fighter Industry Sdn Bhd Homework 1-2-3 project to build our plans are no longer relevant, we have to
Director Michelle Hah Mei Kian (MH) on strength to prepare for the crisis. We revise them to remain agile. Where the
how to build business resilience during the also regularly communicated with staff to business is significantly impacted, we
recovery period. rally support and build unity to face the will need to consider adopting minimum
challenges ahead. operating requirements, including key
What is the impact of the dependencies of workforce, vendors,
pandemic on your business? MH: As businesses take cost cutting location and technology. We have also
measures during MCO, we created more focused on reskilling or upskilling our
TLL: We are in the cranes and hoists cost-efficient solutions for our clients and current workforce to meet the requirements
manufacturing business which is a capital ourselves. Given the Standard Operating of the new norm.
equipment industry. The pandemic has Procedures (SOP), planning has been of
resulted in low market sentiment, and utmost importance to ensure efficiency in Could you share your business
many customers are holding back their our work and processes. We also started recovery timeline?
capex investment and taking a wait- looking within our operations to find ways
and-see approach. Our sales booking, to improve through digitalisation. In fact, TLL: We are looking at a six month
revenue and payment collection dropped the MCO expedited our company’s digital recovery period, from April to September
significantly from March 2020 onwards transformation. 2020. From October 2020 onwards, we
in comparison to periods before and after aim to be even stronger in comparison to
the Movement Control Order (MCO) and What are some of the focus areas our pre-COVID period. The pandemic is
year-on-year performance. in this plan? both a threat as well as an opportunity to
strengthen our company. This is the best
MH: During the first few phases of the TLL: We identified four key strategies for time for us to improve and implement our
MCO, we suffered tremendous financial survival during the pandemic namely, digitalisation and automation roadmap,
losses due to inability to generate revenue cash flow management, cost down in line with our journey towards Industry
based on our usual business model. We measures, creative and aggressive sales 4.0.
expanded to e-commerce, which has seen strategies, and efficient deliveries of our
a steady increase during this trying time work-in-progress. Being lean is crucial MH: The COVID-19 pandemic is
but still only contributes to a miniscule for survival during this unprecedented unprecedented and was impossible to
amount of our total revenue due to the period. In March 2020, we launched our prepare for even with forecasting tools.
nature of our business in fire safety. Cost Down Measures (CDM) program However, there are many lessons to learn
Majority of our customers are businesses to achieve this objective, and divided it once the crisis has passed and we have
which have suffered huge financial losses, into three phases. To ensure our business had the chance to analyse the impact. In
which in turn has affected our business. stays afloat, we implemented various the meantime, we are making decisions
cost-cutting measures to reduce wastage and taking measured action, with
What are some of the measures of resources and increase operational recovery in mind. We hope our proactive
adopted to maintain your efficiency. emphasis on training of our manpower
operations? through the ‘PENJANA’ (Pelan Jana
MH: We always prioritise safety and Semula Ekonomi Negara) scheme and
TLL: During the MCO, we organised continuously engage with our stakeholders many other economic stimulation plans,
various ‘Build Our Strength’ activities to including customers, employees, suppliers, will enable us to ‘combat’ this pandemic
keep staff morale high. We challenged creditors and regulatory bodies. We and allow us to recover and come out
our staff to take up the ‘50km Run also relooked at our financial plans from even stronger than before.BUSINESS IN ACTION @ FMM
14 TECHNOLOGY APR - JUNE 2020
REBUILDING
CAPABILITIES WITH
TECHNOLOGY
S
hort term challenges of adopting be resolved ahead of time without any
new Standard Operating or minimal interruption to the production
Procedures (SOPs) and process. These dashboards can be
adapting to the new normal of viewed remotely hence decision making
manufacturing is coming to a tail can be immediate and fast. This enables
end with the local economy opening the facilities team to fix the actual
up and the number of infections staying problem and results can be viewed in
below the double digit range. Now is real time by the management. Cost of
the time for manufacturers to look at breakdowns and maintenance can be
long term business continuity and how effectively reduced and overall production
they can leverage technology to achieve Local manufacturers no longer will need efficiency can be increased.
more fluid processes and increase their to depend on a large number of foreign
competitive edge. workers. This will help move production Monitoring Supply Chains
to a more seamless process with more
In this new decade, there have been assured targets of production and more
many realisations by the global industry. transparency. Not to mention, the factors
Market drivers in the Western market of safety at the workplace can also be
have realised their dependency on enhanced with warning systems alerting
outsourced manufacturers and are now workers of wrong work practices and
looking at spreading their production immediate stoppage of machines. This
capacities to avoid over dependency on can significantly reduce workplace
a single location. accidents.
Companies have also had to reassess The move to automation and robotics
their remote working facilities, which can also help improve the value of
have become a major concern during the manpower. Employees can be trained
COVID-19 pandemic. Most companies to manage these technologies placing
all over the world were not prepared to them higher up the skills scale, with better
tackle work-from-home situations, whether career growth prospects.
for production or operational capacities.
Maintenance
Retail and consumer industries were
quick to reinvent during the Movement
Control Order (MCO) and Recovery
Movement Control Order (RMCO)
leveraging on e-commerce, digital
payments and smart logistics solutions
to keep their business running. While Single source dependencies were a
at scale, it is tough for manufacturers huge obstacle to doing business since
to adopt and implement in a short time the COVID-19 pandemic. Raw materials,
frame, a large number of companies took spare parts, electrical and electronic
the downtime as an opportunity to study components, packaging, warehouse
their operations and processes, and seek Predictive maintenance is the way and delivery were all affected. Supply
technologies that can support their needs. forward. As more Internet of Things (IoT) chain dashboard and monitoring systems
Gaps that need to be filled post devices can be integrated into traditional based on Artificial Intelligence (AI)
COVID-19: manufacturing lines, the excuse of high and predictive technology will begin to
investment in hardware is diminishing come to the forefront for the benefit of
Manpower by the day. A simple add-on monitoring manufacturers. As more regional hubs are
Adopting automation and robotics in device can observe key patterns of a expected to spring up in response to the
the manufacturing process can reduce machine and alert management of an need for alternative supply chain sourcing
dependency on an inflated workforce. impending breakdown so the issue can by the global market, there is a needBUSINESS IN ACTION @ FMM
APR - JUNE 2020 TECHNOLOGY 15
to streamline the supply chain process decision making as it is based on actual is crucial to the efficient management of
and effectively monitor in real-time to output numbers on the ground. These the production system for a manufacturer.
understand challenges and innovate data can be used to set key Performance The opportunity to control the inventory
solutions faster. It is also key for those Index (KPI), Overall Equipment simply by analysing data reduces the cost
involved in the supply chain industry to Effectiveness (OEE) or production output incurred in storing items you may never
be more prepared for global level crises targets. This enables a root cause need.
like COVID-19. Data derived from the first analysis of downtime driven by data.
half of 2020 will give a full picture of the Sustainability is increasingly
types of challenges faced, giving supply Analytics can also help in price becoming a dominating concern in
chain players insight to build solutions optimisation as it takes into account the long term strategy. Manufacturers are
and service provisions that can give them cost of each element, starting from the setting ambitious goals to reduce carbon
a competitive edge moving forward. raw material to the distribution costs. emissions and save energy as a part of
Data science uses tools for aggregation their role in the environmental crisis. This
Manufacturing Analytics and analysis of data, including both includes complex calculations involving
pricing and cost from internal sources supply chain management, energy usage
and market competitors to extract estimation and so on while maintaining
optimised price variants. efficient production.
Product design and development can Data science can fulfill this with
be enhanced with data science as well as its computer vision applications and
providing validation of material design AI-powered technologies. Using
and decisions by analysing customer modern quality control methods like
needs and preferences. Product designs object identification, detection, and
and features need to resonate with their classification, the process can be
Analytics is needed to deploy all customer’s choice and requirement. monitored through computer vision to
other technologies, as data collection Data science tools are often employed achieve the desired results. Among the
for production output, machine capacity, to determine the best way to produce an many advantages of using computer
maintenance frequency, cost analysis item to suit the unique specifications of vision applications are improved quality
and more can lead the way to the right a customer or a group and further study control, decreased labour cost, continued
investment decision and the right business customer experiences and feedback. operability and high-speed processing
continuity plan. capacity.
Demand forecasting involves analysis
There are many layers of the business of big data aimed at efficient decision As these gaps are addressed,
which generates data from the operators making. The strong relation it shares with manufacturers will be more prepared
and machines to a company’s supply inventory management makes the two to deal with similar crisis situations in
chain. Real-time data and predictive fields literally depend on the other for the future by way of building business
analytics is a great tool for management smooth functioning. Demand forecasting resilience.BUSINESS IN ACTION @ FMM
16 BRANDING APR - JUNE 2020
BRAND MANAGEMENT
TO RECOVER AND
A
s we all know now, the • Connecting the brand effectively
COVID-19 has become one during a time of crisis
of the deadliest infectious
diseases the human race has
ever experienced in history, UNDERSTANDING THE SHIFT IN
impacting the livelihood of billions of CONSUMER BEHAVIOUR
people worldwide. There are obvious
winners and losers throughout this global Some key observations on the
pandemic resulting from economic psychographics and lifestyle changes of
lockdowns and restricted movements people worth taking note of:
across the world. The essential businesses • Most people are now cautiously
and their related industries experienced living their life in the new
unexpected surge in sales, while the non- normal, especially when it
essential ones experienced slowdown involves interaction with outsiders
or worse still, having to wind up their or strangers. However, there
businesses. are still certain groups of risk changed their point of views
takers who have been struggling about working from home. On
For Malaysia, as the economy re- to follow or even flouting the the other hand, there are also
opens with the local COVID-19 wave standard operating procedures some who could not wait to be
going into its recovery phase, most of set by the authorities. back in office as a cure for the
us are slowly getting back to our daily • Personal hygiene and protection loneliness of working from home.
routine while trying to embrace the new is viewed as more of a necessity • International travel will still be
normal in a diligent and disciplined now than an over-reaction. avoided if possible as it is seen
manner. For business owners and As opposed to pre-COVID-19 as potentially high risk. On
marketers, as you try to pick up where days, you may now be frowned the contrary, local interstate
you have left off, it is critical to relook upon if you are the only one not travel for vacation will now
at both external and internal factors to wearing a face mask in public. be perceived as a much safer
re-strategise in order to recover and drive • We have gotten a full glimpse alternative to international
sustenance for the longer term. of how far human beings can holidays, at least for the near
go on living their life online. future.
During the course of the pandemic, Generally, there has been a • People may become more
numerous factors have changed and it sudden acceleration in digital nationalistic to support local
is important to understand what these adoption and usage frequency businesses.
changes are and how they impact in terms of shopping, work,
the brand, the competition and the health, entertainment and so Most importantly, we need to be
consumers. forth. Having said this though, aware that not everyone is experiencing
to some, living their life online is the crisis the same way. Therefore, it
Let’s take a brief look at these three still not normal and brands who is important for brands to understand
key areas: target these groups need to be to what extent the needs and wants of
• Understanding the shift in aware of this. consumers have been shifted. What and
consumer behaviour • Some people, likely those in how they were motivated to make any
• Re-examining brand portfolio white collar occupations, have purchase decision could be different from
management been adapting and may have the time prior to the crisis.BUSINESS IN ACTION @ FMM
APR - JUNE 2020 BRANDING 17
GROW
• Continue to communicate and
connect with your consumers,
and build your brand equity.
This is the time for brands to give
back to the communities. Brands
with strong equity are more likely
to survive a crisis.
• Your brand messages needs to
be authentic. For example, some
brands may run a promotion and
highlight certain portions of the
sale to be donated to charity.
Why not just donate and help
the community without putting a
to get a new hire than to keep a sales component to it?
good employee. It may not be a • Tailor your brand message
good time for salary increment to address the crisis. Try
or nice bonuses, but find ways to contribute to help your
to make them feel valued and employees, suppliers, vendors
motivated. Offer non-monetary and community.
benefits such as flexible work • Avoid being frivolous, humorous
RE-EXAMINING THE BRAND hours or work from home or too light hearted in your
PORTFOLIO MANAGEMENT arrangements that can help to brand communication during
reduce their daily expenses to a time of crisis. Do not send
Next, you may want to look internally and from work. escapism messages. Customers
at your product or brand portfolio • Overall, companies need to want to see solutions, not to
management. As sales demand shrinks, learn to be more agile and be escape and downplay the
cash flow becomes tighter and margins able to respond to a crisis more seriousness of the crisis.
get squeezed. This will be a good time to appropriately and efficiently. • Let customers know that they
“clean up the house”. There are various Re-look at your business and are safe to use your product or
things you can manage within your own decision-making processes. This service. If you run a business
capability to at least make the situation is the time to really accelerate with walk-in customers,
better to sustain your business. Keep your digital transformation and make sure all standard
things lean and simple, but ensure quality digital competency to be on safety procedures are strictly
is not sacrificed. par with the increased usage adhered to. It may cause some
• A leaner but more efficient of digital platforms among inconveniences but customers
product line will help to keep the consumers, be it product will feel safer. Nowadays, word
cost lower and less complicated innovation, sales and distribution of mouth can travel far and fast.
for warehousing, product channels, after-sales support
management, headcount, as well as well as your marketing
as advertising and promotion approach.
budget.
• Do a product line analysis –
drop any product which has CONNECTING THE BRAND
been performing poorly in terms EFFECTIVELY DURING A TIME OF
of production cost, sales or CRISIS
profit margin, unless there is a
strategic reason for it to be kept. In times of crisis, some companies
• Find ways to be more efficient would prefer to stay low and cut
and effective – from product expenses, especially anything relating
packaging, production to advertising and promotion. If you still
capability, work processes, have the means, do not go dark entirely.
KJ Tham
human resources, advertising If there was already a budget set aside
and promotion, dealerships and for advertising and promotion, try to
sales management. sustain the brand communication and be KJ Tham is a brand consultant focussed on
• Drive margin improvement. If in touch with your consumers. If possible, assisting both local SMEs and MNC brands in
you cannot increase price to continue to connect with them but in a brand strategy development and marketing
drive up profit, then try to look relevant manner. Consumers want to activation in both B2C and B2B industries.
within. Re-look at your sourcing know how a product or brand can help He firmly believes that managing a brand is
practices and see if there is any them during a crisis. Below are some more about HOW TO DO IT RIGHT, than just
room for improvement. good tips for brands to consider in their about WHAT TO DO.
• Keep your good employees. As communication plan moving forward or
you know, it can cost a lot more even when another crisis arises.BUSINESS IN ACTION
18 SUSTAINABILITY APR - JUNE 2020
GOOD GOVERNANCE FOR
GLOBAL
SUCCESS
T
he Malaysian Anti-Corruption corresponding sections will position under this provision include Director,
Commission (MACC) Act which them as viable suppliers for the global controller, officer or partner, or any
was gazetted on May 4, 2018 market. Governance and sustainability person in the management of the
with its new Section 17A on compliance have become key company’s affairs.
corporate liability for corruption, considerations in addition to technical
comes into effect as of June 1, 2020. capabilities and the economics of doing If the commercial organisation is
The Section is expected to encourage business with any customer with a global convicted of the offence, the fine includes
business practices with good corporate market. Even government bodies like a maximum fine of 10 times the sum of
governance and integrity. The two the customs, industry-based standards gratification involved; or RM1 million;
year grace period was afforded to providers and federal trade bodies whichever is higher; a maximum jail term
organisations to prepare internally and pay careful attention to the governance of 20 years; or both.
instate mechanisms that can help prevent standards applied by the exporting
corrupt practices. country and providers. If charged, the commercial
organisation can enter a defence to
Independent bodies like Transparency The gist of Section 17A states that prove that it had in place adequate
International Malaysia (TI-M) and commercial organisations are liable for procedures to prevent corrupt acts
Business Integrity Alliance (BIA) Malaysia punishment if any subsidiary companies, among all persons associated with the
have been in support of advocating the partners, associates or employees are organisation.
effect of the law as planned. The main involved in any corrupt acts for the
objective was to show Malaysia’s low benefit of the company. The Guidelines on Adequate
tolerance for corrupt practices and to Procedures (GAP) was issued in
stop actions of bribe, giving or taking, A commercial organisation under the December 2018 to give commercial
from becoming a normal mode of Act is defined as any business registered organisations appropriate lead time
business. in Malaysia or conducting business in to understand and implement relevant
Malaysia. The commercial organisation mechanisms to prevent corrupt practices
Section 17A is also expected to can be viewed as committing an during the course of their business
improve Malaysia’s attractiveness as offence if any person associated who activities. These mechanisms will also
an investment destination as external performs services for or on behalf of benefit organisations as a defence to
investors pumping in money into local the commercial organisation commits absolve liability under Section 17A.
businesses or aiming to build a presence, a corrupt act in order to obtain or
can be assured that local governance is retain business or advantage for the Five main principles under GAP
of international standards. commercial organisation. which a commercial organisation may
use as the reference points for its anti-
As for manufacturing industry Persons who can be held liable in corruption policies, procedures and
players, compliance to the Act and its a commercial organisation for offences controls are:BUSINESS IN ACTION
APR - JUNE 2020 SUSTAINABILITY 19
Top-level commitment Undertake control measures compliance functions to undertake
• Ensure the organisation practices including due diligence, reporting audits, consider external audits,
the highest level of integrity channel and policies & procedures and continual evaluations and
and ethics, fully complies with • Appropriate control and improvements.
applicable anti-corruption laws and contingency measures ought to
regulations and effectively manages be in place to address corruption Training and communication
key corruption risks. risks that have been identified. • Develop and disseminate internal
• Provide assurance to its stakeholders • These measures include due and external training and
that the organisation is operating in diligence, reporting channels as communications relevant to its anti-
compliance with its policies and the well as policies and procedures corruption management system.
regulatory requirements. covering: • The organisation’s anti-corruption
- General anti-bribery and policies ought to be disseminated
Risk assessment corruption policy or statement internally and externally, and
• Forms the basis of anti-corruption - Conflict of interest adequate and relevant training
efforts. - Gifts, entertainment, hospitality ought to be provided to the
• Periodic risk assessment to be and travel organisation’s staff and business
conducted (three years once - Donations and sponsorships associates.
or when necessary) to identify, including political donations • Communication via organisation
analyse, assess and prioritise - Facilitation payments intranet, website, emails,
internal and external risks of - Financial and non-financial newsletters, code of business
corruption. controls conduct, employee handbook,
• Findings should be used to establish - Managing and improving anti- videos, messages, etc.
appropriate processes, systems corruption monitoring framework
and controls approved by top level - Record keeping Other requirements by the GAP
management to mitigate corruption include:
risks. Systemic review, monitoring and • Have a well-crafted anti-corruption
• Assessment may include enforcement compliance programme
opportunities for corruption and • Regular review and assessment • Promote a culture of integrity; ensure
fraud within the organisation, of performance, effectiveness and the right level of communication
financial transactions, business efficiency of the anti-corruption on anti-corruption to internal and
activities in countries or sectors programmes. external parties
that have higher corruption risk, • The review is to form the basis of • Appoint a risk management officer
non-compliance of external parties improvement to the existing anti- • Conduct comprehensive risk
acting on behalf of the organisation corruption measures. assessments
and third parties in the supply • Establish monitoring programmes,
chain. identify competent persons orBUSINESS IN ACTION @ FMM
20 TRAINING & DEVELOPMENT APR - JUNE 2020
A SUPPLY CHAIN PERSPECTIVE
IN MITIGATING COVID-19
M
aslow’s hierarchy of needs support the livelihood of its stakeholders practices to mitigate the risk of spreading
theory advocates that including its employees (who are also the virus by these drivers who are
health, food, shelter, and the consumers). In this light, goods exposed to the external environment.
safety are basic needs that and services have to be moved from
must be fulfilled before the sources to the final end-users, and Reskilling and retraining of
physiological and eventually self- truckers are required. Trucking provides employees may not be feasible when
actualisation is attained by individuals. the linkage between organisations in the conducted out of the company context.
When the basic needs are under threat, supply chain in moving raw materials Therefore, it must start with the company.
our priority is to protect it and other and finished goods. Though essential, The company must come up with new
needs that belong to the physiological since they traverse and move goods from procedures to do business in the new-
and self-actualisation will take a back- one location to another, they are high- normal business environment.
seat. COVID-19 threatens the very core risk groups as they expose themselves,
of our basic needs which is health. It has suppliers, and customers to the risk of The reskilling and retraining can
impacted us socially and economically, COVID-19 infection and it’s a mode for best work when companies and
locally, and globally all at the same inter-state spread. industry change the way they work. If
time and is causing far-reaching and companies do not change the way they
unpredictable effects. Only the passing Therefore, how transporters work is a work, employees may not be able to
of time will tell what impact it will cause public concern. The truckers are exposed be reskilled or retrained as they will be
to our livelihoods. What is certain for to the external environment as they may trapped in the old norms. Therefore,
the foreseeable future is the new norm stop in various places such as petrol the work procedure must change first
of physical distancing caused by it. stations, highway rest areas, stopovers based on social distancing norms,
People have to look for ways to continue in any food outlets, at the pick-up point, and subsequently, the employees and
to make a living with the new norm of at the drop-off point, at the company’s contractors such as the logistics service
physical distancing to ensure food and office, etc. Therefore, manufacturers providers can be retrained to fit these
shelters are not affected. are further exposed to the external new norms.
environment through truck drivers.
Business landscapes are being Truckers raise the external environment The flow of information and the flow
adversely affected due to the disease exposure for the manufacturers through of goods are two critical pillars in the
and the physical distancing to circumvent their drivers when they deliver or collect supply chain. The goods need to be
the spread. However, business though goods. Manufacturers may be required moved as usual, but the accompanying
forcibly, needs to be conducted to to look into and revise their internal work information flow can be adapted to suitYou can also read
