SBil: 20,Jun 2001 PKRBADANAN PRODUKTIVITI NEGARA ISSN

Transcription

} SBil: 20,Jun 2001
PKRBADANAN PRODUKTIVITI NEGARA
ISSN 0127-8223
THE MANAGEMENT OF TRAINING IN MALAYSIAISl COMPANIES:
COMPARATIVE CASE STUDIES
Yow Sau Khong and Malini Ratnasingam
PRODUCTIVITY AND MALAYSIAN ECONOMIC GROWTH
Fatimah Said, Saad Mohd Said, Azhar Harun and
Abdul Azid Hj. Che Ibrahim,
QUALITY MANAGEMENT IN MALAYSIAN MANUFACTURING FIRMS
Syed Azizi Wafa, Julian Paul Sidin, Felix Jules and G. V. Shenoy
A STUDY ON COMPETITIVENESS OF FOOD CROPS PRODUCTION IN MALAYSIA
Shahida Abu Bakar and Mazlina Shafi'i
CI.T.R.A.® 'TEMPLATING' SEBAGAI STRATEGI PELAKSANAAN MS ISO 9000:
SATU KAJIAN DALAM PERKHIDMATAN AWAM MALAYSIA
Zainal Ariffin Ahmad, Tarn Wei Keong, Zuraidah Mohd Zain
and Siti Rahmah Ahmad
JOB DISCRIMINATION AND WORK PERFORMANCE RELATED PROBLEMS
FACED BY AN AGING WORKFORCE: SOME RESEARCH EVIDENCE
Hassan Ali
PRODUCTIVITY OF COMMERCIAL BANKS IN MALAYSIA (1990-1999)
Valli Boobal Batchelor, Geeta Krishnasamy, Mahendhiran Nair and Bala Shanmugam
ONLINE ENERGY-USE BENCHMARKING FOR THE INDUSTRIAL SECTOR IN MALAYSIA
K. Ernest, Syed Abdul Rahman Al-Haddad and R. Ponudurai
PELAKSANAAN PENGURUSAN KUALITI MENYELURUH (TQM) ALA JEPUN (CWCQ)
DAN SUMBANGANNYA : KAJIAN KES Dl SYARIKAT INGRESS ENGINEERING BERHAD
llhaamie Bt. Abdul Ghani Azmi
0000053*67
Junttl Produktiviti - [Jounml].
JURNAL
PRODUKTIVITI
2004
53867
JURNAL
PRODUKTIVITI
2004
SIDANG REDAKSI PENERBITAN
JURNAL PRODUKTIVITI 2004
KETUA PENGARANG
Abdul Latif Hj. Abu Seman
TIMBALAN KETUA PENGARANG
Mohd Razali Hussain
KETUA SEKRETARIAT PENERBITAN
Dr. Mustafa Hashim
SIDANG PENGARANG
Yow Sau Khong
Roslin Hj. Muhiddin
Wan Ariff Wan Hussain
Suhaimi Abd Talib
Sugumar Saminathan
Lok Lee Lee
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rakan-rakan" sekiranya penulisnya lebih daripada tiga orang.
Bibliografi disajikan mengikut tatacara seperti contoh di bawah.
Collins, James T. 1995. "Perjuangan Bahasa Melayu sebagai Bahasa Antarabangsa" Kertas
kerja yang dibentangkan pada Hari Sastera 1995, Melaka, 26-28 Mei 1995.
Crystal, David 1998. The Cambridge Encyclopedia of language.
Cambridge : Cambridge University press.
Ismail Dahaman 1993. "Bahasa Kebangsaan dan Fenomena Penamaan Khas" dalam
Dewan Bahasa 37:11 November, him.
4. Jadual dan Ilustrasi
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CONTENTS
The Management of Training in Malaysian Companies: Comparative
Case Studies
By Yow Sau Khong and Malini Ratnasingam..................................................
Productivity and Malaysian Economic Growth
By Fatimah Said, Saad Mohd Said, Azhar Harun
and Abdul Azid Hj. Che Ibrahim.................................................................................... 15
Quality Management in Malaysian Manufacturing Firms
By Syed Azizi Wafa, Julian Paul Sidin, Felix Jules
and G. V. Shenoy............................................................................................................ 35
A Study on Competitiveness of Food Crops Production in Malaysia
By Shahida Abu Bakar and Mazlina Shafi'i....................................................................
53
CLT.R.A.© 'Templaring* sebagai Strategi Pelaksanaan MS ISO 9000:
Satu Kajian dalam Perkhidmatan Awam Malaysia
By Zainal Ariffin Ahmad, Yuserrie Zainuddin, Tarn Wei Keong, Zuraidah Mohd Zain
and Slti Rahmah Ahmad................................................................................................. 67
Job Discrimination and Work Performance Related Problems Faced by
an Aging Workforce: Some Research Evidence
By Hassan A/i................................................................................................................ 83
Productivity of Commercial Banks in Malaysia (1990-1999)
By Valli Boobal Batchelor, Geeta Krishnasamy, Mahendhiran Nair
and Bala Shanmugam..................................................................................................... 91
Online Energy-use Benchmarking for the Industrial Sector in Malaysia
By K. Ernest, Syed Abdul Rahman Al-Haddad and R. Ponudurai................................... 101
Pelaksanaan Pengurusan Kualiti Menyeluruh (TQM) Ala Jepun (CWCQ)
dan Sumbangannya : Kajian Kes di Syarikat Ingress Engineering Berhad
By Ilhaamie Bt. Abdul Ghani Azmi................................................................................ 121
THE MANAGEMENT OF TRAINING IN MALAYSIAN COMPANIES
COMPARATIVE CASE STUDIES
By
Yow Sau Khong
Manager, Service Research Division
National Productivity Corporation, Malaysia
Dr. Malini Ratnasingam
Faculty of Arts and Social Sciences
University of Malaya
Abstract
This paper discusses the approaches in which Malaysian companies manage the training and
development functions. It will present an integrated summary of findings emerging from a
comparison acrossfive companies selected for case studies. The five consist of three manufacturing
companies, one service and one trading company. The case studies reveal that companies place
emphasis on production and technical skills training, administrative and management
operations. This emphasis is in accordance with the main reasons for training, namely to reduce
errors and waste and provide basic skills critical to production/operations and technology.
However, companies also recognise the need to achieve their long-term objective of developing
cultures of continuous and life-long learning, through formal policies as well as training and
evaluation practices.
Introduction
Effective training and the capacity to learn are two of the most important attributes of
organisations and employees. People change as time passes, as do organisations and
their business environment. Training and development programmes represent a means
of shaping and guiding employees and organisations towards better integration between
job demands and human attributes as well as a closer alignment of organisation
attributes in response to environmental demands. Organisations therefore develop
and implement efficient and effective training and development programmes and
provide a means of monitoring performance.
This paper focuses on the ways in which the training function is managed in Malaysian
companies. It begins by presenting the organisational and training characteristics of
all five of the case studies, followed by a discussion of the main themes emerging from
the comparative analysis across case studies. This section begins with a brief
introduction to each of the companies selected for case studies.
Profile of the Five Companies
Company A was established in 1985 as a joint venture with a Japanese company owning
the trademark. Its principal activity is the manufacture of sanitary wares such as sinks
and toilet bowls. Manufacturing processes are largely manual, with the company
operating at maximum capacity given the present size of the workforce and machinery
available.
The second case study, Company B is jointly owned by Australian and Hong Kong
interests. The company's core activity is the manufacture of electrical wiring accessories
such as switches. The manufacturing process consists of both automated and manual
assembly operations.
The third case study is Company C is formed in 1986, when the cargo and container
handling division was privatised. Company C operates on a 24-hour basis with
significant priority given to maintaining smooth and continuous operations. Operations
control is managed by sophisticated computer systems that oversee every aspect of
cargo handling. The main activity for workers is driving the variety of machines needed
for moving containers to and from storage and the ships.
The fourth case study is Company D which manufactures crystal oscillators components
for export. It has the largest workforce when compared to the other four companies.
Its high precision manufacturing processes requires a highly skilled workforce and
accordingly there is great emphasis on continuous training, particularly with regard
technical expertise.
The final case study is Company E that operates both trading and manufacturing
facilities. The description of training in this case study has focused mainly on the trading
division. As such entry-level qualifications are significantly higher compared to the
other four companies and employees have greater control over their activities. This
company also stresses the importance of continuous training and development.
The organisation profile of the five organisations chosen for case studies is indicated
in Table 1.
Table 1
Organisation Profile
Characteristics
. ,, , . ,
Company A Company B
Compaq C Company D
Company E
Sector
Manufacturing
^
^
^
/
Service
/
Trailing
Age of Business
10-20 years
^
/
/
Over 20 years
/
/
S
•/
V
S
Annual Tolal Sales
RM10 to <RM30 Million
S
RM30 to < RM50 Million
•/
RM50 to <RM100 Million
R M K X ) t o < R M 5 0 0 Million
S
Ownership
^
Local
Foreign
Joinl venture
s
S
No. of Full-time Employees
100 - 499
500 - 1 ,000
More than 1 .000
s
s
•/
S
s
The case studies have included a range of companies stretching from Company A that
can be considered representative of SMEs to Company D which is a large MNC.
Company C, Company D and Company E each operate in different sectors and vary
widely with respect to workforce size, yet these three companies are comparable in
terms of annual total sales. It is also noted that the three foreign companies are very
well established with over 20 years of experience.
Training Profile
A review of training and development practices in all five companies indicates both
similarities and differences (Table 2).
Table 2
Training Characteristics
Characteristics
Company A Company B Company C Company D Company E
Do you have an independent
training department?
Yes
No
^
/
^
/
15
0.5
30
4
10
Centralised
80
20
40
60
95
5
70
Line divisions/ Departments
30
100
-
70
75
Sll
30
25
20
90
10
70
30
Training & development
budget as percentage of
payroll
^
Percentage distribution of
training:
Source of training:
Internal
External
As can be observed from the table above, only two of the companies have designated
training departments, with its own complement of trainers. For the other companies,
training has been subsumed under the Human Resources Department. Both Company
B and Company E have one person assigned responsibility for training, however in
Company A, training has to compete against all the other HR functions. The presence
of dedicated training personnel at both Company C and Company D is an indication
of their commitment to training. Also these two companies have the larger workforce.
The lack of a training department at Company E is more a reflection of company policy.
This company provides employees with foundation training, after which employees
are expected to take personal responsibility by charting their own career development.
Where relevant, the company makes available resources for further development
training. The absence of a training department however does not seem to have impeded
the ability of the training officers at Company A and Company E, where the bulk of
training is centralised. Company A uses its own resources and is also able to call upon
resources available at headquarters. The training officer at Company E is fully
responsible for co-ordinating training and involved in the 70% training delivery based
on internal resources. Company B differs from this trend of centralised training delivery
as a result of their innovative use of internal resources as described below.
The comparison across companies indicates that training budget is not a reflection of
commitment to training. Company D has the lowest budget allocation however its
commitment to training is one of the highest. Its high training standards are achieved
through the use of internal resources such as a pool of internal trainers. These internal
trainers are full-time engineers, production supervisors and technicians who conduct
training. Company D has formalised this system of internal trainers by incorporating
a minimum training delivery of 20 hours per year into their performance appraisal
standards. Thus Company D manages to maintain a full complement of expert trainers
without a large expenditure. A similar system is in place at Company B where
individuals with expertise in specific areas are encouraged to develop training modules
for internal use. These modules represent an effective use of internal resources and are
also a source of recognition for the people involved. Thus both these companies manage
to provide extensive training through effective use of internal resources.
Company C has the highest budget for training mainly because of its practice of sending
staff overseas for advanced training. Port training was said to be very expensive, and
experiencing rapid changes in technology. It is therefore necessary for officers to keep
up with these developments in order to maintain Company C's standard of operations
and retain the competitive advantage.
Thus this comparison of organisation and training characteristics across the five case
studies has indicated the following trends. First it was observed that training
departments are more likely to be found in companies with a large number of
employees. Second it was noted that all but one company tended to centralise training,
and that all companies utilised mainly internal resources to provide training and
development opportunities. Training effectiveness was not correlated with training
budget, as the two companies with the smallest budget have managed to provide
effective training using internal resources. The small budgets are also associated with
an emphasis on on-the-job training for which expenditure is negligible. A bigger budget
however becomes necessary when it is necessary to send employees overseas for
specialised training.
Training Policy
A common theme across training policy in all companies is the expectation that training
and development will contribute towards achieving company objectives. For example,
the Company D training policy is to continuously develop and maintain strong
manufacturing capacity and the Company E policy emphasises the company's
commitment to the training, education and development of all employees to achieve
the desired objectives of both Company E and its employees. Thus, there are clear
expectations that training should contribute to the companies' goals. One difference
between companies is that only some state the minimum hours of training required
per year from each employee. For example both Company A and Company D apply
the industrial standard of 40 hours of training per year. However only Company D
manages to attain this target, while Company A struggles to find a balance between
production demands and opportunities for training. Company B's policies includes a
requirement of 24 days of training per employee per year, while Company C and
Company E do not specify minimum levels of training. Thus, the general objectives of
training are similar but the requirements of training differ across companies.
Almost all of the companies in the case study develop annual training calendars with
the exception of Company C, which operates based on a 2-year training schedule. It is
the responsibility of the training manager to develop the training schedule in
consultation with both senior management and department heads. Senior management
sets strategic objectives for the year ahead and this represents the organisation's training
needs. Employee training needs is identified by department heads who forward
information on both department and individual training needs. For example, at
Company D, each section or department maintains a section training map which details
and monitors staff development and training over the year. Based on this section map,
each section generates an annual action training map that is forwarded to the training
manager. Information on individual training needs is discussed during annual
performance appraisals between employees and immediate supervisors. This is an
opportunity for employees to request specific types of training, and also for supervisors
to assess the level and type of training required in the year ahead. All this information
is forwarded to department heads who then channel both individual and department
training needs to the Training Manager. In addition to these formal sources of
information, Training Managers also receive many informal suggestions for training,
as for example at Company C where the training department has an "open-door"
policy where trainers hear out ideas and comments from interested employees. Thus
the training manager is the communication hub through which all information about
training is processed and formalised in annual or 2-yearly training schedules.
This systematically developed training calendar is subject to changes as a result of
either product or process changes or due to disruptions caused by operations. For
example, Company B manages to implement only 20-30% of its planned training.
Disruptions usually occur in the form of employee issues that need immediate attention
or unplanned product or process changes requiring familiarisation training with new
machines or work processes. At both Company A and Company C interruptions arise
from production and service demands. At Company C operations are given priority,
which leads to training using creative scheduling such as using midnight and other
off-peak hours for training sessions. At Company A production demands create
disruptions that can be accommodated by in-house training, but creates severe problems
when outside trainers are involved.
Two practices at Company D and Company E stand out as effective training approaches.
First is the detailed planning at Company D that facilitates both planning and
implementation. Training matrices have been developed that detail the type of training
needed at each level and within each section. Within a section, each matrix is divided
into levels and types. Generally there are three levels within a matrix. One example is
maintenance training that has three levels and two types, which is mechanical and
electrical maintenance. Level one is basic training conducted in-house, consists of 80
% theory and 20 % practical and takes about 3 to 4 months. Level two is machine based
and requires trainees to dismantle and re-assemble whole machines. Level three is
more advanced and focuses on project work conducted under supervision. The training
matrix also applies to the employee development programme. Level one focuses on
internal culture, written and unwritten rules and regulations, which allows employees
"to take care of themselves". The second level touches on motivation, communication
and human relations with the objective of teaching employees "to take care of others".
Level two is scheduled for 3 years after Level 1, a time span that allows employees to
experience company culture and gain the necessary experience that facilitates
understanding. Level three covers topics such as customer satisfaction and leadership,
with the understanding that senior employees with more than six years experience are
now able "to take care of themselves, others and the company". These meticulous
training matrices are the basis on which employees and sections develop their own
skills maps. These comprehensive competency maps makes it easier for employees to
make improvement plans with respect to both technical and personal development.
Employees are also helped by the formal requirement of 40 hours of annual training,
which is possibly an effective way of avoiding the conflict between production and
training.
Company E has similarly detailed training and development competency guidelines
serving both immediate and intermediate needs. As stated in the training policy, training
is to better employee's current job performance and education is to prepare employees
for identified career moves in the foreseeable future. The difference between Company
E and all the other case study companies is in the third category termed development
that prepares the employee for future challenges yet to be identified. This third
requirement makes explicit that Company E employees must always think in terms of
immediate, intermediate and long-term goals that may roughly correspond with
Company D's levels one to three. The difference however is that at Company E, the
company does not specify the contents of development planning. Instead company
policy formalises development by requiring each employee to submit annual
development plans that are reviewed together with respective supervisors. This process
of development planning is parallel to that of employee contribution planning, however
the latter is included in performance appraisal but not the former. Company E policy
clearly states the employees hold personal responsibility for development planning
and this is reinforced by not prescribing the contents of development planning. In this
way employees are encouraged to become self-motivated in their career planning.
Supervisors act to ensure an intersection between employee and organisation needs,
yet by allowing personal autonomy in planning the company hopes to create
enthusiastic, committed and involved employees who drive their own development.
These qualities are strongly linked to the qualities of innovation and creativity. Thus
Company E is an example of how training policy and practices serve to sustain its core
values of people and product development, innovation and creativity.
This review of training policy has highlighted several similarities and differences
between the case studies. The similarities are with respect to the link between training
policy and achieving company objectives, the role of training managers in co-ordinating
organisation, department and individual training needs and the difficulty some
companies face in implementing scheduled training. The example of two practices
from Company D and Company E suggest ways in which the conflict between
production and training can be minimised. Formalising training and development
requirements may minimise this conflict, particularly if as at Company D the training
matrix clearly demonstrates how training will benefit production. Company E is a
trading company and therefore operates under different conditions faced by production
companies. Yet its practice of requiring employees to take responsibility for their longterm career development may be an effective means of motivating employees towards
continuous learning and improvement.
Training Programme
Based on the training calendar for 2001, it is possible to identify three main types of
training provided by all of the companies. First is skills training consisting of either
production skills or sales and marketing techniques. At Company A production skills
are taught mainly through on-the-job training (OJT), as the work is mainly manual
and therefore most effectively taught via coaching and mentoring. Company B also
focuses on OJT for its operators, but it also has a significant component on technical
skills training because more of their machines are automated and/or computer
controlled. Company C trains its operators on all facets of port operations and container
management. Company D's provides operators with training in process innovation
and control and quality management, while Company E's skills training covers sales
and marketing techniques.
The second component of operator training covers team building, health and safety,
fire fighting and environmental awareness. Team building at Company B involves
employees in all five of its departments; similarly all employees at Company A
participate in team building training. It is interesting to note that operators at Company
C are provided with organisation & business awareness, and change awareness training;
which is designed to broaden understanding of both Company C as an organisation
and also knowledge of the broader environment in which it operates.
The second major component is technical skills training provided for assistant engineers,
engineers, technical and maintenance staff. In all the companies except Company E,
technical skills is the second most important type of training provided after production
skills training. The third component is administration and management training
provided for managers, supervisors, clerical and finance staff. While most companies
tend to include motivation and communication, problem-solving, coaching and
counselling within this category, it is interesting to note that Company C involves
about one-third of its operators in communication training and Company D provides
training on the emotional quotient to all of its operators.
In addition to the above forms of training, employees are also encouraged to attend
short certification or diploma courses conducted by external training institutes. The
company sponsors employees who take up courses relevant to their job function.
Company C is an exception in that it is licensed to conduct a Diploma in Port and
Logistics Management. Thus all companies provide a range of training covering the
main categories of skills, technical, administrative and management training and also
encourage its employees to acquire professional qualifications wherever possible.
Based on this review of training programme, the question then arises as to how relevant
are the training programmes- The table below indicates three main reasons for training
selected by each of the companies. This information was obtained from the survey
questionnaire.
Table 3
Identification of Three Main Reasons for Training
3 main reasons for training:
To reduce errors and waste
Company A Company B Company C Company 1) Company E
•/
•/
S
s
s
S
^
To meet safety requirements
To provide basic skills critical
to technology
To provide basic skills critical
for production / operations
To meet customer
requirements
To motivate or award
s
V
s
/
s
s
V
employees
•/
To broaden knowledge
The two most popular reasons are to reduce errors and waste and to provide basic
skills critical for production or operations. Next comes training to acquire basic skills
critical to technology, and to meet customer requirements. The comparison of training
programmes across the five case studies indicates that training content is closely aligned
to the training objectives selected in the table above. The focus on production, technical
and management training will indeed have a direct impact on improving quality,
productivity and meeting customer requirements. Thus it may be concluded that the
training provided is successful in fulfilling current training objectives. The next table
presented lists the three most critical challenges to improving training identified by
each of the case study companies.
Table 4
Identification of Three Most Critical Challenges for Training
3 most critical challenges to
Company A Company B Company C Company D Company E
improving training in your
organisation.
Aligning training with business
goals
/
Senior management commitment
•/
Effective evaluation
Increased resources
/
•/
Increased line management
involvement
/
/
S
^
Prioritising training needs
Increased access to training
S
^
Extension of training to more
employees
Develop a culture of
continuous/ life-long learning
S
•/
•/
S
^
All of the companies have indicated that one of the critical challenges is to develop
cultures of continuous learning in their respective organisations. The question arises
as to how are these companies going to create learning organisations from the existing
situation where most of the companies are focused on improving quality and
productivity. Only Company E selected the response of training as a means of
broadening knowledge and it also already has in place policies and practices that
encourage self-management of training and learning. While Company D did not select
the training objective of broadening knowledge it too emphasises continuous learning
and employee development. The culture of life-long learning in this organisation is
interpreted in two ways. First is the need to continuously upgrade both skills and
technological expertise. Second is career development through job rotation, where
employees prepare themselves for career advancement by becoming thoroughly
conversant with all aspects of the manufacturing process. Thus, both Company E and
Company D provide two models of how organisations can develop to become learning
organisations. Company C through its plans to introduce on-line self-paced and self-
directed learning is showing indications of developing a learning culture and it would
be interesting to observe how this company develops in the future.
The second most critical challenge identified was increased line management
involvement in training. The involvement required is greater management commitment
through explicit awareness on the need for training followed by actively involving
themselves and their department employees in training. In practical terms this means
whole-hearted management involvement in drawing up the training calendar, making
time for employees to participate in training and providing the necessary support and
reinforcement required for transferring knowledge and skills to the workplace. It is
interesting that both Company D and Company E, which have formalised training
and development requirements, still see the need for further management involvement.
This is perhaps an indication that policies alone are insufficient to bring about effective
training and development. A key ingredient for developing learning organisations is
management support in providing both resources and opportunities to put into practice
learning in the workplace.
The main methods of training delivery are through coaching and mentoring for OJT
and classroom and small group learning for formal training. At Company A, Company
B, Company D and Company C the main training for operators is in-house through
OJT or short courses. It is only supervisors, technical staff, assistant engineers, junior
managers, and above who participate in certification courses outside the organisation.
In addition to OJT and classroom training, Company B maintains a library of audio,
video and training manuals available for self-study by employees. Company C is unique
in its attempts to improve PC literacy amongst all levels of employees. In addition to
formal training in computer skills, Company C has also made available computer
terminals for operator use in their slow times. This is because Company C's work
operations from office to wharf are computer based, hence the need for computer
literacy among all employees. An added benefit of computer literacy is the proposed
introduction of on-line learning that can be accessed by employees in their own time
and at their own pace. Computers are also involved at Company E where 70 % of
employees make use of Internet resources for training and development. Through the
10
Internet it is possible to form special interest discussion groups, participate in discussion
lists maintained by professional organisations and access resources held at other
Company E facilities worldwide. Thus computers represent an added dimension to
the traditional forms of training and learning that can be used to overcome problems
of access and flexibility, as well as to complement resources provided by the training
department.
Training Evaluation
A comparison of evaluation methods across companies indicates that the small
companies use more informal methods of training evaluation while the larger companies
have more formal and varied methods of training evaluation. Both Company A and
Company B tend to rely on trainee and supervisor feedback. At Company A trainees
completing a training session will provide informal feedback on the course. At Company
B this feedback is obtained using course evaluation questionnaire. On returning to the
workplace trainee behaviour is observed by supervisors. At Company A the supervisor
monitors performance throughout but formal evaluation is carried out only during
annual performance appraisal. At Company B, supervisors also monitor trainee
behaviour and this feedback is returned to training department in the form of a formal
report one month after completion of training. Thus the two smaller companies tend
to carry out training evaluation based on trainee feedback and feedback from
supervisors on the impact of training on trainee behaviour. They do not use formal
examinations to test knowledge.
The three larger companies tend to rely on multiple sources of feedback for training
evaluation. At Company C trainees complete a questionnaire and provide informal
feedback at the end of training. About one to two weeks after that, the trainers conduct
informal interviews with the trainees at their workplace to assess the impact of training.
Any comments and suggestions are taken note of and the evaluation is recorded in the
appropriate form and sent to the respective user departments. One month after
completion of training, the department head sends a formal evaluation to the training
department. Evaluation is based on a checklist of work behaviours. Thus training
evaluation at Company C is a mixture of both formal and informal feedback from
trainees, supervisors, department heads and other senior members of management
based on trainee reactions and changes in behaviour.
Company D has a more structured and variable form of evaluation. At level one, training
evaluation is in the form of a post-course questionnaire and feedback from senior
employees. At level two, evaluation is in the form of an examination to assess the
amount of knowledge transferred. At the most advanced level three, evaluation is in
the form of project work carried out under supervision to assess the extent of skills
and knowledge transfer. Thus training evaluation at Company D covers all the four
types of feedback proposed in the Kirkpatrick model, namely trainee reaction,
evaluation of knowledge, behaviour and impact of training on results. In addition to
all these forms of evaluation, Company D also conduct cost-benefit analysis on the
cost of training, as for example comparing the cost of conducting training locally versus
the cost of sending employees to Japan for specialised technical training.
11
Similarly thorough forms of training evaluation are implemented at Company E where
evaluation is based on competencies per job role translated into behaviour checklists.
Evaluation of employees is carried out through self-evaluation, supervisor evaluation
and where possible, external evaluation by customers and regional officers. Evaluation
criteria are based on behaviours and ability to achieve forecasted targets. Thus training
evaluation focuses on trainee reactions, behaviour and results. The knowledge
component is not formally assessed but is evident in the employee's ability to produce
results and also preparedness for promotion. Company E hopes to further develop
external evaluation such that supervisors can provide real-time feedback to employees
in the field.
Thus a comparison of methods of training evaluation across the five companies indicates
that the two small companies, Company A and Company B, tend to have more limited
sources of feedback and less formal evaluation. Both these companies have expressed
their desire to upgrade evaluation of training transfer.
The three larger companies have more formal and multiple sources of evaluation, but
they also see room for further improvement in training evaluation.
Issues in Training and Learning
Three main issues emerge in comparing training and development practices across
the five case studies. First is the need to improve the quality of training provided,
which takes on different forms in different companies. At Company A this means two
things, first is the need to acquire resources to set up a training department so that
training does not have to compete with other HR functions. Secondly, Company A
wishes to systematise and standardise skills training by transforming existing expertise
into computerised knowledge systems. The employee profile in this company consists
of two groups, an older and experienced group and a younger and inexperienced
group. In order to preserve the knowledge and skills of the older group and pass it on
to the younger group, the training officer envisions capturing this knowledge in a
computerised databank for future use. Needless to say such a project will require
several months if not years of dedicated effort, which cannot be undertaken without
staff exclusively dedicated to training. A similar situation exists at Company B where
the sole training officer requires staff support to maintain and expand the monitoring
system and plan more effective training.
The second issue emerging is the need to increase both operator and management
participation in training. At Company C where continuous operations make it difficult
to schedule training, it was said that quality of training was important in motivating
operators to attend. The existing reward system encourages operators to focus on
operations and is therefore a disincentive for attending training. In order to compete
successfully, training courses must be of a sufficient standard and quality so as to
attract operator participation. Changing the reward system to provide incentives for
attending training, as suggested at Company B, may increase attendance, but
enthusiasm and full participation will still depend on the quality of training and trainers.
12
Increasing line management involvement appears to be closely linked to awareness of
the impact of training on both productivity and performance. Across the five companies,
it was observed that some managers are highly supportive of training and others less
keen to acknowledge the role of training. This difference in attitude may be due to
production pressure, or may be as a result of the tendency among some managers to
be increasingly more comfortable with status quo as they advance in age and status. In
any situation there exist driving and restraining forces that respectively facilitate or
resist change. If restraining forces are located at strategic points in the hierarchy, then
they can have devastating impact on organisational development. Thus increased line
management involvement flows from an awareness of the critical role of training. If
department heads and more senior managers accept the need for training, then striking
a balance between time for production and time for training becomes less of a problem.
The research evidence also indicates that employees who feel supported by department
heads perform better in training and are also better able to transfer knowledge and
skills back to the workplace (Goldstein and Ford , 2001).
The third and final theme is the role of work attitude in developing life long learning.
The example of Company E indicates that even when organisation structure and policies
support continuous learning, it is only a minority that makes full use of the resources
available. Work pressures and/or domestic pressures can be significant obstacles,
however the fact that it is mostly the younger employees who make use of these
development opportunities suggests that work attitude is also a significant influence.
The question arises as to what is the purpose of work? If work is seen as a means to an
end, then once employees enter their respective 'comfort zones' they become
increasingly more resistant to change and development efforts. If however work is
seen as an end in itself, then the employee is enthusiastic, fully involved and passionate
about work. Motivation is intrinsic and therefore stronger and more durable. Thus the
creation of a culture of continuous learning involves reengineering both organisation
and employees. From these case studies it is seen that training effectiveness is in part
related to the organisation's ability to systematically provide quality training, with the
support of organisation policies and culture that formalise the role of training. The
success of these policies and training programmes is also dependent on the attitudes
of both managers and operators. Strong managerial support is necessary for enthusiastic
trainee participation and effective transfer of knowledge and skills back to the
workplace. The most effective employees however are those who are internally driven
to continuously upgrade their skills and knowledge and thereby continuously improve
their performance. Therefore a conjunction of both organisation and individual
characteristics is needed to successfully develop a culture of continuous learning and
improvement.
Thus a review of issues emerging from the comparison of case studies highlights three
inter-connected themes. First is the need to continuously improve the quality of training
and development within an organisation. Improvement may take the form of upgrading
and developing training systems and improving training evaluation. The second theme
is the need for greater operator and management involvement. This involvement is
dependant on reward systems that encourage training and development parallel to
rewarding productivity, and increasing awareness among managers about the
13
importance of training to productivity. The third theme further extends the change in
attitude to those supporting learning organisations. Developing cultures of continuous
learning requires both internal attitudinal changes and external organisational
environments that support continuous improvement and development. Focusing on
either one or the other alone is insufficient and a source of frustration for training
officers.
References
Abdulai, D. (2001) The process of continuous learning and training: The new rule for
Malaysian workers in the knowledge-based economy. In D.N. Abdulai (ed.)
Malaysia and the k-economy. Selangor: Pelanduk Publications (M) Sdn. Bhd.
Amat Taap Manshor (2001) Challenges and potentials in human resource development
in a knowledge-based economy: A Malaysian perspective. In D.N. Abdulai (ed.)
Malaysia and the k-economy. Selangor: Pelanduk Publications (M) Sdn. Bhd.
Arnold,}., Cooper, C.L. & Robertson, I.T. (1998) Work Psychology. 3rd Edition, London:
FT/Prentice-Hall,Pearson Education Ltd.
Arshad Hj. Marsidi (1988) Productivity through people and innovation: The success
of Public Bank, Jurnal Produktiviti. 4, 2-21.
Furnham, A. (1997) The Psychology of Behaviour at Work, East Sussex: Psychology
Press Publishers.
Goh, Swee Seang (2001) Defining knowledge worker. New Straits Times, July, 28.
Goldstein, I.L. & Ford, J.K. (2002) Training in Organizations. 4th Edition, Belmont, CA:
Wadsworth Group.
Gregory Thong & H.C. Jain (1989) Human resource management practices of Japanese
and Malaysian companies: A comparative study, Malaysian Management Review,
23(2), 28-49.
Kanter, R.M. (1995) Managing change. In S.Chawla & J. Renesch (Eds.) Learning
Qrgnaizations: Developing Cultures for Tomorrow's Workplace, Portland,
Oregon: Productivity Press.
Lang, J.C. & Ho, A.C (1999) Mislearning in Malaysian organizations: A veiwpoint,
Malaysian Management Review, 34(1), 50-61.
Low, L. (2000) Educational Skills Training for National Development, Tokyo: Asian
Productivity Organization.
Muchinsky, P.M. (2000) Psychology Applied to Work, Belmont, CA: Wadsworth/
Thomson Leaning.
Nemeth, C.J. & Nemeth, L. (2001) Understanding the creative process: Management
of the knowledge worker. In Nonaka, I. & Teece, D. (eds.) Managing Industrial
Knowledge, London: Sage Publications Ltd.
NPC Report (1994) Employer sponsored training and development, Petaling Jaya:
Perbadanan Produktiviti Negara.
Salleh Yahya, Lailawati Mohd Salleh & Goh Wee Keat (2001) Human resource
management practices and knowledge management, Malaysian Management
Review., 36(1), 33-39.
14
PRODUCTIVITY AND MALAYSIAN ECONOMIC GROWTH
By
Associate Professor Fatimah Said
Department of Applied Economics
Faculty of Economics and Administration
Saad Mohd Said
Department of Applied Economics
Dr. Azhar Harun
Department of Analytical Economics
Abdul Azid Hj. Che Ibrahim
Department of Applied Statistics
Abstract
This paper reviews selected productivity growth studies in Malaysia. Several conclusions
emerged. The growth of Malaysian economy was mainly governed by the input-driven,
particularly through capital accumulation contributing almost half of output growth. The
contribution of TFP growth, which was about 25 percent, was very low as compared to
productivity-driven economy such as Korea and Taiwan, where productivity growth contributed
almost half of their GDP growth. Empirical evidence shows that outward-oriented economy,
improvement in physical capital and the existence of foreign firms tend to give significant
effect in enhancing productivity growth in Malaysia.
Productivity and Malaysian Economic Growth
Introduction
There are two distinct sources of economic growth, first is the input-driven growth
which is achieved through the increase in factors of production and is inevitably
subjected to diminishing returns and not sustainable in the long run (young, 1992;
krugman, 1994 and kim and lau, 1994). second is the productivity-driven or total factor
productivity (TFP) growth which is the growth in output that cannot be explained by
the growth in total inputs. .
15
Concept of Productivity
Productivity measures the extent to which a given set of inputs is transformed into
outputs, higher productivity is achieved when the same amount of input produces a
larger output, two measures of productivity are normally used in the economic
literature, namely partial factor productivity and total factor productivity.
Partial Factor Productivity
Partial factor productivity (PFP) may be measured by the ratio of output to a particular
input, there are two indices commonly used to measure PFP - labor productivity (output
per unit of labor) and capital productivity (output per unit of capital input), they are
called pfp since output is compared with only one input at a given time, although
simple and feasible, it is subjected to some misleading interpretation, for instance, in a
capital intensive industry, due to the substitution of capital for labor, labor productivity
may not accurately measure the productivity performance of the industry, in this case,
increase in labor productivity is contributed by the increase in fixed capital, instead of
the increase in labor, besides, PFP also does not take into account other unexplained
factors which contribute to the increase in productivity, such as improvements in the
quality of labor, technological changes or the effect of economies of scales, these
limitations led to greater emphasize on the concept of total factor productivity.
Total Factor Productivity
Total factor productivity (TFP) measures the overall efficiency with which outputs are
produced. It is essentially a qualitative improvement which leads to larger output
being produced without additional increase in labor and capital inputs. It is normally
attributed to the advance of knowledge or technological progress, efficient use of factors
of production, improvements in organizational structure and human resources
management, gains from specialization, learning-by-doing, skill acquisition through
human capital investment and enhancement of information technology.
Thus the growth in TFP is the difference between the actual growth of output and the
growth of a composite of all factor inputs. It measures the overall efficiency with which
products are produced and thus enable the economy to generate larger output from
the same available resources. In other words, TFP growth would bring the economy to
a higher production frontier, with more efficient use of factor inputs. Hence it is an
important source of sustainable long-term economic growth.
TFP and Economic Growth
TFP growth has long been identified as one of the important sources of economic
growth in the western countries (Solow, 1956,1957; Abromovitz, 1956; Denison, 1967;
Kim and Lau, 1994). In a study on sources of growth in nine western countries, Denison
(1967) found that advanced knowledge, improved allocation of resources and economies
of scale accounted for almost 60 to 90 percent of the growth in income per capita, with
factor inputs (labor, capital and land) explaining a relatively small percentage of the
16
overall economic growth. This implies that the growth of the western countries has
been mainly driven by TFP growth rather than the growth in factor inputs. This finding
is supported by another recent study conducted by Kirn and Lau (1994). They found
that almost 45 to 70 percent of the economic growth in five OECD countries was
contributed by productivity growth.
This growth phenomenon is somewhat different from the growth pattern observed in
the East Asia New Industrializing Countries. Studies indicated that the growth of these
countries has been mainly input-driven through massive factor accumulation rather
than productivity-driven (Young, 1992, 1995; Krugman, 1994; Kirn and Lau, 1994).
Young (1992), for example, found that over the period of 1966-1990 productivity growth
in the aggregate non-agriculture economy ranges from as low as 0.2 percent in Singapore
to a high of only 2,3 percent in Hong Kong, whereas in manufacturing, productivity
ranges from a low -1.0 percent in Singapore to a high of only 3.0 percent in South
Korea.
In the past, the growth of Malaysian economy was mainly input-driven particularly
through investment, with capital accumulation contributing almost half of the potential
output growth. Due to limited resources and capacity in capital accumulation and stiff
competition in attracting foreign investment, the government has decided to shift the
economic growth strategy from input-driven to productivity-driven (Malaysia, 1996).
Past Studies on TFF Growth in Malaysia
Studies on TFP growth in Malaysia were mostly conducted either at the macro level
for the Malaysian economy or specifically focused on manufacturing sector. Included
in the first category were studies done by Ikemoto (1986), World Bank (1993), Gan and
Robinson (1993), Kawai (1994), Zarina and Shariman (1994), Gan and Soon (1998) and
Jenny (2001). Studies that attempted to measure TFP growth for the manufacturing
sector are benefited from the work done by the World Bank (1989), Maisom and Arshad
(1992), Maisom and Mohd. Ariff (1993), Maisom, Mohd. Ariff and Nor Aini (1994),
Okamoto (1994), Tham (1997,1998), Nik Hashim (1998), Rahmah (1999), Rahmah and
Idris (2000) and Zulaifah and Maisom (2001).
In estimating TFP growth rates, all of the above studies produced various results and
are not directly comparable due to differences in methodologies, data, time frame as
well as sample coverage. However, these differences should not prevent us from
arriving at a general conclusion on long term TFP growth performance in Malaysia.
Thus, the objectives of this paper are to review the selected TFP growth studies in
Malaysia, identify the pattern of TFP growth performance and analyze factors and
policies that are responsible for the efficiency performance. This paper is divided into
five parts. After the introduction in Part 1, Part 2 reviews the methodologies adopted
in selected TFP studies, Part 3 compares their results and findings and Part 4 analyses
factors and policies that influence TFP performance while our conclusion is presented
in Part 5.
17
Methodologies Fof Estimating TFP Growth in Malaysia
The concept of TFP growth and its measurement was first developed by Solow (1956,
1957) in his conventional growth accounting framework. Basically, the framework was
developed based on the assumption of constant returns to scale and perfect competition.
The framework was further elaborated by other scholars, such as Kendrick (1961),
Denison (1967), Christensen, Cummings and Jorgenson (1980), Gollop and Jorgenson
(1986), Maddison (1987), Jorgenson et. al. (1987) and Gillis et. al. (1996). In essence the
framework decomposes the rate of growth of output into the contributions of the rate
of growth of labor and capital inputs, plus a residuals term, typically referred to as the
rate of growth of TFP. In fact, this residual-based methodology include not only the
effect of technological change, but also other elements, such as improvement in
managerial practices, qualitative improvement in human and capital resources,
economies of scale, imperfect factor and product markets, X-inefficiency, poor
measurement of capital and labor inputs and other omitted factors.
Overall Economy
In estimating TFP growth for the Malaysian economy, two methodologies that are
commonly used are the growth accounting framework (Ikemoto, 1986; Kawai, 1994;
Gan and Soon, 1998) and the econometric estimation of a production function (World
Bank, 1993; Zarina and Shariman, 1994; Jenny, 2001).
The Growth Accounting Framework
The growth rate of GDP as define by Kawai (1994) is given by,
dlnGDP
dlnL
dt
dt
, d\r\K
dlnTFP
I7
————— -y
——— +Ty ——— + —————
dt
m
(i)
dt
where GDP is gross domestic product, L is labor, K is capital stock, VL is labor share in
value added, VK is capital share in value added and t is time. With the assumption of
constant returns to scale, VL + VK is equal to 1.
Following Ikemoto (1986), Kawai's value share of labor is the ratio of averages wages
and salaries in the manufacturing sector to total value added. The first term on the
right hand side of equation (1) shows the contribution of labor to the GDP growth rate,
while the second and third terms show the contribution of capital and TFP respectively.
Thus the growth rate of TFP is a residual which is obtained by subtracting the
contribution of labor and capital from output growth,
dlnTFP
dt
dlnGDP
dt
T7
—————— = —————— -V,
18
d\nL
dt
T7
d\nK
dt
————-V K ————
{(2)
*
The Econometric Estimation of Production Function
The World Bank (1993) utilized the production function approach to estimate TFP
growth. Given the economy production function of the form,
Q=AF(K,E,L)
(3)
where A is TFP, K is capital, £ is human capital endowments, L is labor. The growth of
output per worker (lower case letter indicate rates of change) is given by,
(4)
where SK is elasticity of output with respect to physical capital and SE is elasticity of
output with respect to human capital. The TFP growth is thus the residual obtained by
subtracting the contributions of human and physical capital accumulation from the
growth of output per worker,
(5)
With the assumptions of competitive factor market and constant returns to scale, SK
and SE are equal to the income shares of physical and human capital respectively. Thus
in most empirical studies, the estimated output elasticity coefficients are taken as income
shares. The difficulties of getting the income share data, forced the World Bank to
estimate SK directly from the economy production function by regressing annual log
output growth on log capital growth, log human capital growth and log labor growth.
Manufacturing Sector
Two methodologies that are normally adopted in estimating TFP growth for the
manufacturing sector are the Gollop and Jorgenson (1986) model and the Dollar and
Sokoloff (1990) model. Gollop and Jorgenson's methodology was employed by the
World Bank (1989), Maisom and Arshad (1992), Maisom and Mohd. Ariff (1993),
Maisom, Mohd. Ariff and Nor Aini (1994), Okamoto (1994) and Tham (1997, 1998).
Zulaifah and Maisom (2001) used Dollar and Sokoloff model, while Rahmah and Idris
(2000) adopted the variant of Dollar and Sokoloff model.
Gollop and Jorgenson Model
Following Gollop and Jorgenson model, the World Bank (1989) estimated TFP growth
for the Malaysian manufacturing industries. Given the production function,
Q = F(KtL9X9t)
(6)
where Q is gross output, K is capital, L is labor, X is intermediate good input and
t is time. Differentiate In Q with respect to t,
19
rftog _
——— = 5,,
K ————
dt
dt
L,
———
dt
xr
————
dt
t
'
u
where SK, SL, Sx are the shares of capital, labor and intermediate input respectively and
S( is the residual or the rate of TFP growth. With profit maximization, the value share
of each input is equal to the elasticity of output with respect to each input,
=
K
SL =
PeQ
P±_
PeQ
p^x
where PKis the price of capital, PL is the price of labor and PQ is the price of output. For
changes between discrete points in time, equation (7) can be written as
(11)
where weights are given by average shares of capital, labor and intermediate inputs in
the value of output,
+S_
(12)
Thus, from equation (11), TFP growth is given by:
~
(15)
Dollar and Sokoloff Model
Based on the growth accounting model, Dollar and Sokoloff (1990) introduced
alternative methodology to estimate TPF growth. In essence, their model decomposes
labor productivity growth into the contribution of capital deepening plus a residual,
which is TFP growth, such that,
20
e
V
+ TFP
V
/
(16)
J
O
K
where — is the growth of labor productivity, — is the growth of capital-labor ratio, ft is
L-i
Li
the coefficient of capital-labor ratio and a L
is capital deepening. The first term on the
v j
right-hand side of equation (16) is the rate of growth of labor productivity attributable to
the increase in the rate of capital utilization. OL is estimated from the given production
function,
HfH>T
(17)
(18)
and a =
The TFP growth is the residual between the actual growth in labor productivity and
the amount of the advance due to capital deepening, that is
f A
TFP =
^
Q -a
^
_/v __
x-*
(19)
L
L
\ J \ J
Results of TFP Growth Estimates in Malaysia
Overall Economy
Table 1 show estimates on sources of growth for Malaysian economy obtained by
Ikemoto (1986), Can and Soon (1998) and the Economic Planning Unit (Malaysia, 2001).
Malaysia experienced high rates of growth of between 7 to 8 percent, except during
1984-1989 and 1996-2000 when the economy suffered from severed recession in 1985
and 1998. Despite the differences in the methodologies adopted, these studies revealed
that the growth of Malaysian economy is primarily input-driven.
In his comparison study on sources of economic growth for 10 Asian countries (Japan,
Singapore, Hong Kong, Taiwan, Malaysia, Republic of Korea, Philippines, Thailand,
Indonesia and India), Ikemoto (1986) found that GDP growth in Malaysia during 19701980 was heavily dependent on growth of capital input. Capital contributed about 45
percent to GDP growth as compare to only 22 percent from TFP growth. This result
21
was in contrast to the case of productivity-driven economies such as Taiwan and Korea
where productivity growth contributed about half of their GDP growth.
Note also that despite high rate of economic growth of 7.2 percent during 1979-1983,
TFP growth was extremely low at 0.5 percent per year and contributed only 6.9 percent
to output growth. Distortions in resource allocation due to excessive public sector
involvement and regulation, unsustainable current account deficit and over-valuation
of the exchange rate were factors identified by Gan and Soon (1998) that adversely
affected productivity growth during this period. Estimates by the Economic Planning
Unit showed that productivity performance is expected to achieve its highest level of
2.8 percent and contributed about 37.2 percent to output growth during 2001-2005
Table 1
Sources of Economic Growth (percent)
Country / Author
AnnuaJ Rate of Growth
GDPCapital
Labor TFP
Percentage Contribution to Growth
GDP
Capital
Labor
TFP
46.9
48.1
45.3
33.1
30.4
33.0
20.0
21.5
21.7
37.1
62.5
38.5
52.3
47.9
34.3
30.5
32.7
23.8
29.6
28.6
6.9
30.8
23.9
22.5
50.2
50.2
41.3
23.9
25.0
21.5
25.9
24.8
37.2
30.7
32.2
30.3
21.2
16.7
19.7
48.1
51.1
50.0
26.2
48.6
31.5
25.1
24.7
27.3
48.7
26.6
-41.2
Malaysia
lkemoto(1986)
1970-1975
7.1
1975-1980
8.6
7.8
1970-1980
Gan and Soon (1998)
1974-1978
1979-1983
1984-1989
1990-1995
1974-1995
7.0
7.2
5.2
8.8
7.1
1.4
1.8
1.7
100.0
3.6
2.4
2.6
2.6
2.6
4.5
2.0
4.6
3.4
2.4
2.2
1.7
2.1
2.1
2.0
0.5
1.6
2.2
1.6
100.0
100.0
100.0
100.0
3.3
4.1
Economic Planning Unit (Malay sia,2001 )
1990-1995
9.5
4.7
100.0
100.0
100.0
2.3
3.1
2.3
1.2
1.6
2.5
1.2
2.8
100.0
4.7
7.5
lkemoto(1986)
1970-1975
1975-1980
1970-1980
8.8
10.2
9.5
2.7
3.3
2.9
1.9
1.7
1.9
4.3
5.2
4.8
100.0
Korea
Ikcmolo(l986)
1970-1975
1975-1980
1970-1980
9.5
7.6
8.5
2.5
3.7
2.7
2.4
4.6
2.0
3.5
100.0
1996-2000
2001-2005
100.0
100.0
Taiwan
1.9
2.3
100.0
100.0
100.0
100.0
Source: compiled by authors
The question which can be raised is how do we evaluate the expected contribution of
TFP to the growth process of Malaysia? To answer this question we use Chenery and
Syrquin's typology (1986) of the relative contributions of TFP growth to total output
growth at different stages of development (Table 2).
22
Table 2
Chenery and Syrquin's Typology on Sources of Growth
Annual Rate of Growth (percent)
Capital
Labor
TFP
Percentage Contribution to Growth '?llji
Capital Labor
TFP
Stage 1:
Primary Production
3.90
5.03
2.56
3.06
0.44
0.72
49
49
38
34
12
16
Stage 1 1 :
Industrialization
5.84
6.29
2.85
2.30
6.52
1.81
1.40
2.28
2.92
47
43
39
27
21
15
25
36
44
6.11
5.50
1.40
1.47
3.11
2.80
35
32
15
50
50
Stage 1 1 1 :
Developed
18
Source: adapted from Can and Soon (1998)
According to Chenery and Syrquin's typology, the shift from primary producing to
industrializing economy requires high rates of capital accumulation and rising
productivity. Annual TFP growth increases from an average of 0.44 percent
(contributing 12 percent to growth) in the primary stage to 2.92 percent (contributing
44 percent to growth) in the later stage of industrialization. Consequently, the
contributions of physical inputs decrease from 87.0 percent in the primary stage to
54.0 percent in the later stage of industrialization. As the economy develops, TFP
contributes 50 percent to output growth with physical inputs contributing the other
half. Thus, with the contribution of TFP to GDP growth of around 37 percent, based on
Chenery and Syrquin's typology, Malaysia is in the middle stage of industrialization.
Manufacturing Sector
This section discusses results of selected studies on TFP growth in the Malaysian
manufacturing industries.
(a) Maisom and Mohd. Ariff (1993) estimated TFP growth for 43 five-digit resources
based industries for the period 1968-1988. They observed higher productivity growth
in consumer-oriented labor-intensive industries (vegetable oils and fats and clothing),
industries with lower effective protection rates (paper products and wood products)
and the export-oriented industries (clothing, vegetable oils and fats, palm oil and cocoa).
Industries with excess capacities (rice mills, sawmills, ice factories and fertilizer), heavily
protected industries (sawmills, rice mills and sugar refineries) and the importsubstitution industries (rice mills, fertilizers and tobacco), on the other hand,
experienced lower productivity growth.
(b) Maisom, Mohd. Ariff and Nor Aini (1994) undertook study on productivity levels
in the Malaysian industries over the period of 1974-1989. They found highest TFP
growth was among the medium industries as compared to heavy and light industries.
Among the light industries, the footwear industry was found to exhibit a decline in
productivity. TFP growth was also declining in the tobacco resource-based industries.
Investment goods industries experienced the highest level of TFP growth and were
the fastest growing compared to the intermediate goods industries.
23
(c) Tham (1997), using the four-input model to estimate sources of growth in the
manufacturing sector found that TFP grew at only 0.3 percent for the period 1986-
1991. The low TFP growth for the overall manufacturing sector was due to negative
TFP growth obtained for 12 out of the 28 industries computed. She also found that the
major source of output growth in the manufacturing sector was input-driven,
particularly from capital which contributed 22.4 percent of the growth as compared to
the TFP growth of only 2.2 percent. In another study, Tham (1998) also obtained a very
low TFP growth for the manufacturing sector at 0.1 percent for the period of 1986-
1993.
(d) Rahmah and Idris (2000) undertook studies on sources of labor productivity growth
in large scale industries (LSI) for the period 1982-1994. They found that many LSI have
gained labor productivity growth through efficiency or TFP growth. In some subindustries such as chemicals, non-metallic mineral products and transport equipment
the contribution of TFP growth was more than 100 percent and the contribution of
capital deepening and labor were either very low or negative. As a whole, their results
showed that the LSI have benefited from the efficiency gain in raising labor productivity.
In contrast to this finding, Rahmah (1999) in her earlier study on sources of growth in
small and medium industries (SMI) found that the contribution of TFP growth were
still small especially in the more labor intensive enterprises. These results are not
surprising since it is well recognized that as compared to SMI, LSI enjoy benefits from
technological advancement, better human resource and organizational managements
which will lead to higher efficiency gains.
(e) Zulaifah and Maisom (2001) looked into the sources of labor productivity growth
in the manufacturing sector for the period 1985-1995. They found that for the
manufacturing sector as a whole TFP growth was the most important source of labor
productivity growth contributing about 58.7 percent, followed by capital deepening
which accounted for the remaining 41.3 percent. In almost all industries, TFP growth
constitutes a more important source of labor productivity growth compared to capital
deepening.
Table 3 presents a summary of annual TFP growth estimates for the manufacturing
sector as a whole. The results vary from one another. For example, although using the
same methodology and covering the same time period, Maisom, Mohd. Ariff & Nor
Ami (1994) obtained higher TFP growth estimate of 9.1 percent as compare to 3.8 percent
obtained by the World Bank (1989). These differences can be attributed to differences
in inputs.
24
Table 3
Previous Estimates on TFPG in the Malaysian Manufacturing Industries, 1975-1995
Period of Study
Annual TFPG
Author
Level of Aggregation and Model
1975-1979
3.8 percent
World Bank (1989)
1975-1979
9.1 percent
Maisom, Mohd. Ariff
23 three-digit industries
Gol lop & Jorgenson: 2-input model
1980-1983
6.4 percent
& Nor Ami (1994)
Maisom, Mohd. Ariff
1981-1984
-1.9 percent
1984-1986
4.1 percent
Gollop & Jorgenson: 3-input model
& Nor Aini (1994)
World Bank (1989)
Maisom, Mohd. Ariff
& Nor Aini (1994)
1986-1989
0.9 percent
Tham (1998)
1987-1989
13.5 percent
Maisom. Mohd. Ariff
1986-1990
0.3 percent
Okamoto(1994)
1986-1991
0.3 percent
Tham (1997)
1986-1993
0.1 percent
Tham (1998)
1990-1993
-0.8 percent
Tham (1998)
1985-1995
4.3 percent
Zulaifah & Maisom (2001)
& Nor Aini (1994)
27 ihree-digit industries
Gol lop & Jorgenson: 4-input model
29 ihree-digit industries
Dollar & SokololT: 2-input model
Source: compiled by authors
The World Bank adopted a three-input model comprising of capital, labor and
intermediate goods. Output is measured by the gross value of output while capital is
reflected by the value of fixed assets (the stock concept), and labor is represented by
wages and salaries. Maisom, Mohd. Ariff & Nor Aini, on the other hand, employed a
two-input model. Value added is taken as output, while real cost of capital assets (the
flow concept) measures capital input and the number of full-time and part-time workers
representing labor input. This differences, thus lead to different estimates of TFP growth.
Despite differences in methodologies and sample coverage, comparison of these results
provides some insights on longer perspective of TFP growth performance. Neglecting
Maisom, Mohd. Ariff & Nor Aini results, prior to 1980, the overall manufacturing
industries experienced positive TFP growth with an average of 3.8 percent per annum.
Until the middle of 1980's, the efficiency performance of the manufacturing sector
deteriorated and recorded negative growth rate. However, from 1986 the productivity
performance showed an improvement. The TFP grew from less than 1 percent per
year during 1986-1993 to more than 4 percent per year in mid 1990's.
25
Policy That Influence TFP Growth
Estimate of TFP growth in the previous section shows that TFP recorded negative
growth in the first half of 1980's which may be due to the poor performance of the
heavy industries. The early 1980's was the period of transition from export-oriented
industrialization towards heavy industries, such as chemicals, iron and steel, petroleum,
cement and transport equipment. Maisom, Mohd. Ariff and Nor Aini (1994) found
that the productivity performance of the heavy industries during 1973-1989 were not
encouraging as compared to the medium and light industries. Similarly, the World
Bank (1989) found that during 1975-1984, despite substantial investment resources,
the capital intensive industries have performed poorly with excess capacity, low rates
of labor absorption and declining productivity. The average TFP growth for crude oil
refineries and iron and steel during 1981-1984, for example, was found to be -11.4
percent and -21.0 percent respectively.
The 1980's also witnessed heavy involvement of public sector in the capital intensive
projects through the establishment of various public enterprises (Rugayah, 1991).
However, many of these public enterprises were not performing well (Ismail and Osman
Rani, 1991 and Ismail and Meyanathan, 1993), operating inefficiently, causing wastage
of investment resources, imposing greater fiscal burden and slowing down the economic
growth (Salih and Yusof, 1989) thereby contributing to the deterioration of the total
factor productivity performance.
To overcome the problems associated with the public enterprises and to minimize the
size of public sector, the government announced the privatization policy in 1983. Besides
encouraging private sector to play an active role in economic development, the
government also gave greater emphasize towards improvements in research and
development (R&D), human resources development, and liberalization of trade and
capital operations. Since most of the policy changes took place after the recession of
1985, it is not surprising to find improvement in efficiency performance in later years,
thus reflecting the success of government economic policies in managing the economy.
Technological Progress
Technological progress has been seen as a crucial element in enhancing the total
productivity in the manufacturing sector. Technological improvement can be acquired
either through the transfer of technology from abroad or the development of indigenous
technology. Transfer of technology involves four components- techno-ware, human
resources, information and organizational structures (Anuwar, 1992). Thus, the transfer
of technology requires not only mere importation of plant, machinery and equipment,
but also considerable investment in research and development of the other components
of technology. The development of own indigenous technology would also require
vigorous research and development (R&D) efforts.
Realizing the importance of R&D in generating better efficiency, improving total factor
productivity, and increasing competitiveness of all sectors in the economy, the
government in early 1986 started to give greater emphasize on the development of
26
Science and Technology (S&T) by launching the Fifth Malaysia Plan (1986-1990) and
the Industrial Master Plan (1986-1995). The commitment of government to build and
develop indigenous technology and improve S&T capabilities is shown in Table 4.
Table 4
Malaysia: Development Allocation for R&D,
S&T and Technological Transfer by Type
of Agreement, 1981-3995
Programme
Allocation (KM mil/inn)
Direct R & D
S&T Infrastructure & Development
Types of Agreement
Technical Assistance & Know-how
Join! Venture
Management
Trademarks & Patents
Service
Turnkey & Engineering
Others
Total
1981-1985
1986-1990
413-8
629.0 (52.0 %)
126.7
807.7 (537.5 %)
278
1991-1995
1,000.0(59.0%)
1,749.0(116.5 %)
331
72
39
194
21
4
76
418
76
45
46
19
19
US
601
737
697
31
12
179
27
9
21
Note: Figures in brackets refer to percentage increase.
Source: Malaysia (1986, 1991 & 1996).
There was tremendous increase in the allocation for S&T infrastructure and
development. The allocation for R&D was increased by 50 percent between 1981-1985
and 1986-1990 and by 60 percent between 1986-1990 and 1991-1995. Besides the
commitment to build and develop indigenous technology, the transfer of technology
from abroad becomes increasingly important. Malaysia has sought foreign technology
through a variety of mechanisms, such as technical assistance and know-how, joint
ventures, trade marks, patents and turnkey. The transfer of technology is mostly focused
on the technical assistance and know-how. The composition of imported technology
also reflected the movement towards investment in high value added and capital
intensive industries, such as transport equipment and industrial chemicals (Malaysia,
1996).
Human Capital
Economists have long stressed the important of human resources development in
influencing productivity and growth of a country (Nelson and Phelps, 1966; Denison,
1967; Walters and Rubinson, 1983; Barro, 1991 and Haskel and Martin, 1993).
Productivity-driven growth economy requires highly skilled, trainable and
knowledgeable workers, as well as administrative and managerial expertise. Adequate
supply of competence and skilled manpower is essential for the country not only to
utilize new technology, but also to adapt to imported technology.
27
According to Nelson and Phelps (1966), a country with larger human capital stock
would be able to absorb new products and technology discovered elsewhere. Hence, a
follower country with more human resource would grow faster because of the ability
to catch up rapidly to the technological leader. Similar conclusion was made by Barro
(1991) who found that the growth rate of a country is positively related to the starting
amount of human capital and poor countries tend to catch up with richer countries if
the poor countries have high human capital per person.
Realizing the importance of human capital in enhancing productivity, the government
has taken various measures to improve educational and training facilities, which
includes among others, offered courses in specialized trades to provide workers with
skill required for the use and adaptation of modern and high technology production
methods and processes. As a result, the number of trainees completing their training
programme in the field of engineering, buildings trades and skill upgrading increased
by 42.1 percent between 1981-1985 and 1986-1990 and by 96.2 percent between 19861990 and 1991-1995 (Table 5). This gives a positive influence on the pattern of the TFP
growth in early 1990's.
Table 5
Malaysia: Output of Degree Courses from Public Institution and Skilled and SemiSkilled Manpower from Public Training Institution, 1981-1995
Course
1981 - 1985
number %
1986 - 1990
number %
1991 - 1995
number
%
Course
Arts
Science
Technical
14,802
9,317
2,719
55.2
27,780 52.6
17,507 33.1
7,540
14.3
49,018 61.9
34.7
10.1
Total
26,838
100.0
52,827 100.0
79,168
28,240 35.1
21.110 26.3
13,440 16.7
12,850 16.0
4,730 5.9
7 1 ,300 45.2
46,610 29.6
13,030 8.3
16,750 10.6
10,000 6.3
80,370 42. 1 1
157,690 96.2'
Skilled and Semi-Skilled Manpower
Mechanical Engineering 24,778 43.8
Electrical Engineering
13, 543 24.0
Civil Engineering
8,621
15.2
14.4
Buildings Trades
8,162
1,437
2.6
Skill-Upgrading
Total
56,541
Note: 1 refers to percentage increase.
Source: Malaysia (1986, 1991 & 1996)
28
19,642 24.8
1 0,508 13.3
1 00.0
Despite efforts to encourage enrollment of students in S&T, the output of graduates
from public tertiary institutions continued to be dominated by arts graduates as
compared to science and technical graduates, with the ratio of 60:40 during 1991-1995
(Malaysia, 1991). This suggests the weaknesses of Malaysian education system in
producing adequate supply of S&T manpower. The ineffectiveness of our education
system is revealed in a study by Jenny (2001) and Rahmah (2003) who found that
human capital did not play major role in enhancing productivity growth. Rahmah
(2003), on the other hand, found that improvement in physical capital, through the
utilization of more advanced technology, would give significant effect in increasing
productivity growth.
Trade Policy
Malaysia has adopted an inward-oriented trade policy during her second round of
import substitution policy in the early 1980's, concentrating on the substitution of
intermediate and capital goods industries. To encourage the development of these
industries, the government adopted the import-restriction trade policy by raising the
degree of protection. Trade restriction has resulted in an increase in both nominal and
effective rates of protection for the majority of intermediate and capital goods industries
during 1982-1985, especially in nonmetallic mineral products, fabricated metal products
and transport equipment, (Okamoto, 1994).
However, these heavily protected industries were not performing well as expected
(Malaysia, 1989). Protection makes them complacent within the domestic market and
lack of interest to improve productivity in order to be internationally competitive.
Existing empirical literatures on the relationship between trade policies and productivity
change do indicate that trade restrictiveness tend to have a negative impact on TFP
growth (Krueger and Tuncer, 1982; Nishimizu and Robinson, 1984).
Industries which are heavily protected will experience lower productivity growth as
compare to those with lower effective rates of protection. (Edwards, 1991; Maisom
and Mohd. Ariff, 1993). The adoption of import-substitution policy will trap the country
into the vicious cycle characterized by inflation, stagnant exports, imports and
investment and slow productivity growth (Kawai, 1994). Hence, it is not surprising to
find very poor TFP performance for the manufacturing sector as a whole in the early
1980's.
The poor economic performance of the import-substituting industries and the onset of
economic recession in 1985 have led the government to shift to the export-oriented
trade and also implementing import liberalization policy. The most rapid efficiency
gains is said to occur when barriers to competition, such as tariffs, quotas and other
protective devices, are absent (World Bank, 1989). As a result, between 1985 and 1987,
both nominal and effective rates of protection declined for the majority of industries,
especially beverage, tobacco, footwear, rubber products, pottery, nonmetallic mineral
products, fabricated metal products and transport equipment (Okamoto, 1994).
29
The coexistence of export-promotion policy and import liberalization policy is also
known as trade neutrality (Thomas, Nash, et al., 1991). This neutral export-orientation
trade policy would enable Malaysia to enjoy the benefit of a virtuous cycle through
increases in export, imports and investment and a rise in productivity (Kawai, 1994),
thereby improving the TFP growth. In fact, available empirical evidence shows that
greater openness of the Malaysian economy through trade enhanced the productivity
growth (Can and Soon, 1998; Jenny, 2001; and Rahmah, 2003).
Foreign Direct Investment Policy
Declined in prices of primary commodities, accumulated public debt and limited
domestic investment due to the economic worldwide recession in the mid 1980's forced
the government to adopt a more liberalized foreign direct investment (FDI) policy.
Several changes were made to FDI in 1986 including the introduction of new fiscal
incentives and the acceptance of 100 percent foreign ownership of capital to companies
which export more than 50 percent (previously 80 percent) of their products. Changes
in FDI regulations have successfully attracted large inflow of FDI, especially the exportoriented foreign companies, into the manufacturing sector and improved the production
efficiency.
Two mechanisms has been identified by Okamoto (1994) through which FDI
liberalization policy tend to have favorable effect on the level of TFP in the Malaysian
manufacturing sector. First, foreign companies entering Malaysia are more productive
in comparison with local companies. Since most of them are an export-oriented
companies and to compete successfully in the international market, they must be more
superior in terms of production technology and management know-how and thus more
productive than the local firms.
Second, the entry of foreign companies may create spillover-effects which will improve
the productivity performance of the companies. Stiff competition from foreign
companies will encourage the local companies to improve their production and
management technology and take advantage from direct and indirect transfer of
technology from foreign companies. Furthermore, the creation of new business
opportunities to the local companies due to the entry of foreign companies would
raise capacity utilization of the locals and improve their productivity performance. In
fact, available empirical evidence showed that the existence of foreign-owned companies
gave a positive impact on TFP growth in Malaysia (Jenny, 2001).
The discussions above reveal that most of the drastic policy changes were introduced
in 1986. Hence, it is not surprising to find the TFP growth in the manufacturing sector
improved from -1.9 percent during 1981-1984 to 0.3 percent during 1986-1990, and
further to 4.3 percent during 1985-1995.
30
Conclusion
In summary, the studies reviewed show that the growth of Malaysian economy and
its manufacturing sector is primarily input-driven. Recent estimate of contribution of
TFP to Malaysian economic growth ranges between 25 to 37 percent. This is relatively
low compared to the expected contribution based on Chenery and Syrquin's typology
which requires half of the economic growth originating from total productivity growth
for a developed country. Various factors contribute to the enhancement of TFP growth.
These include improvements in human resource, management, organization technique
and trade policies and upgrading R&D. Greater openness of the economy through
trade, existence of foreign-owned firms and improvement in physical capital tend to
give significant effect in enhancing productivity growth in Malaysia.
On the methodology side, the model adopted varies from one researcher to another,
the most popular being the Gollop and Jorgenson model. The measures of inputs and
output also differ. Gross value of output and value added are two common measures
taken to represent output, while the input components highlighted the differences
inherent in the models. To measure labor input, World Bank (1989), for example
considered wages and salaries to be superior to the number of workers, since wages
and salaries take into account changes in age, sex, hours worked and educational
composition. Maisom, Mohd. Ariff and Nor Aini (1994), on the other hand, preferred
to adopt the number of workers as an alternative proxy. The transformation of inputs
to a single output, that is the production function, is normally assumed to be of CobbDouglas type with constant return to scale. Researches have shown that not all industries
exhibit this phenomenon. The frontier of TFP study thus provides a challenge and
remains to be explored.
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34
QUALITY MANAGEMENT IN MALAYSIAN MANUFACTURING FIRMS
By
Associate Professor Dr. Syed Azizi Wafa
School of Business and Economics
University Malaysia Sabah
Julian Paul Sidin
Universiti Malaysia Sabah
Felix Jules
Executive, Sony Electronic, Malaysia
Professor G. V. Shenoy
Besant Institute of Management, India
Abstract
In this study the researchers attempt to investigate the relationship between organizational
quality context and the current and ideal quality management using data collected from managers
of manufacturing organizations in Malaysia. The knowledge of organizational quality context
is useful in explaining and predicting quality management practices. The findings of this
study reveal that there are significant differences in manager's perceptions between current
and ideal quality management. In addition, this study found that perceptions of managers on
current quality management are influenced by organizational quality context. While perceptions
of managers on ideal quality management are still influenced by organizational quality context,
the degree of influence is less compared to current quality management. Further, the study
found differences in the perceptions on quality management between managers from
organizations of different sizes and ISO 9000 certification status.
Introduction
The concept of Total Quality Management (TQM) has gained much attention in recent
years. Rapidly changing competitive conditions often create for organizations
continuous environmental changes. Increasing global competitiveness has made TQM
an important aspect of an organization's management and performance not just for
survival but also for growth and success. TQM is a strategy for change in an
environment where the accepted paradigms are subject to constant challenge. It is a
strategy concerned with developing an organizational culture in which people are
able to meet these challenges and realize the opportunities of change. However,
according to Lau and Idris (2001), the transformation to a TQM organization depends
on the extent to which firms successfully implement certain quality management
practices.
35
The past few years have seen considerable evidence presented on the importance of
product and service quality to corporate survival in the marketplace (Singh, 1999).
Most modern companies recognized the need to alter their thinking in terms of quality
and how that can improve their business performance. TQM has become an essential
strategy in both manufacturing and service organizations. Quality has been identified
as one of the competitive strategies for improving the business performance in a global
market (Gurnani, 1999). Many firms are pursuing TQM implementation to deliver
high-quality products and services and hence to achieve their business objectives
(Gunasekaran, 1999; Gurnani, 1999).
The implementation of TQM is one of the most complex activities that any company
can attempt. Glover (1993) argues that many organizations do not actually understand
the complexity of organizational change and innovation. It is only appropriate that a
sound implementation framework be developed before actual implementation to ensure
a successful adoption of TQM in any organization. One of the most influential factors
in ensuring TQM adoption success is theformulation of a sound implementation
framework prior to embarking on such a change process (Yusof and Aspinwall, 2000).
Jasmine and Sameer (1998) mentioned in their paper that only one-third to one-half of
organizations have observed significant improvement through TQM programmes. This
lack of significant success is often not a failure of the TQM concept, but failure to pay
sufficient attention to the cultural and structural variables that influence TQM (Jasmine
and Sameer, 1998; Parzinger and Nath, 2000). There are many examples of entities that
have tried to adopt TQM and failed in the process. As a result, some organizations are
questioning whether quality programmes offer the right solutions despite the wellintentioned objectives of TQM. Wrong implementation approaches to TQM are perhaps
the most frequent reason for failure (Glover, 1993; Gurnani, 1999; Yusof and Aspinwall,
2000).
A study done by Lee-Peng Tan and Gilbert Lim-Teck Sia (2001) on TQM implementation
in Malaysian companies has proven that customer-focused approach in the operations
will increase process efficiency and greater customer satisfaction. In Malaysia, the
National Development Plan (NDP) was developed to attain a balanced development
of the economy. Part of the NDP strategies is to improve product quality through a
comprehensive program to enhance and promote standardization and quality
management among industry (Hamzah and Ho, 1994). A survey done by Agus (2000)
on TQM practices in public listed manufacturing companies in Malaysia concluded
that companies adopting TQM were seen as being better quality implementers and
this could give them an edge over their competitors. However, another study comparing
the adoption of quality practices between manufacturing companies in Malaysia and
in the UK found that companies in Malaysia make less use of quality practices than
UK companies (Idris et al., 1996; Aziz et al., 1998). In addition, another study conducted
by Syed and Mustafa(1999) found that the organisational commitment of workers in
companies adopting TQM did not differ significantly with those working in companies
not adopting TQM.
36
This study attempts to investigate the relationship between organizational quality
context and the current and ideal quality management using data collected from
managers from manufacturing organizations in Malaysia. This is a correlational crosssectional study where the independent variables and the dependent variables are
studied in several organizations. Respondents comprised of Quality Managers,
Production Managers and Finance/Accounts or Human Resources Managers from
108 different manufacturing organizations located in Northern Malaysia. The
organizations range mostly from medium to large manufacturing organizations, both
local and multinationals.
Literature Review
Quality Management actions taken by managers are triggered by stimuli in their
environments or what is known as the organizational quality context (Benson et al,
1991). Thus, it is the organizational quality context that determines the level of quality
management. Knowledge of organizational quality context is useful for explaining
and predicting quality management practices (Germain and Spears, 1999). Therefore,
a better understanding of the relationship between the organizational quality context
and quality management would enable managers to better describe quality
management. By more fully describing the practice of quality management, the door
is then open for the development and implementation of new, well-grounded
prescriptions for the improvement of quality management, thus enabling managers to
contribute towards achieving Malaysia's Vision 2020.
Ideal Quality Management and Current Quality Management
In this study, managers' perceptions regarding what quality management should be,
are referred to as "Ideal Quality Management" and managers' perceptions of the current
practice of quality management are referred as "Current Quality Management". Both
ideal and current quality management are measured in terms of comprehensive, critical
factors of effective quality management developed by Saraph et al. (1989) which include
eight critical factors namely: Organizational top management leadership for quality;
The role of the Quality Department; Training; Product design; Supplier quality
management; Process management; Quality data and reporting; and Employee
relations. These factors were derived through a process that involved identification
and synthesis of those critical requirements for quality management that have been
prescribed by eminent quality practitioners and academics.
Many researches have been conducted to understand the important aspects for a quality
program to have a real chance of success. It has to have top management's strategic
support (Raghunathan et al., 1997; Sohail and Hoong, 2003; Llopis and Tari, 2003),
employee participation (Chiu, 1999; Rees, 1999; Shapiro, 2000; Solis et al, 2000; Sohail
and Hoong, 2003) improving product quality (Wyatt et al., 2000), quality record and
data (Raghunathan et al, 1997; Llopis and Tari, 2003), a good quality management
system (Boon and Ram, 1998; Owusu, 1999), a professional quality assurance practices
(Raghunathan et al, 1997), performance and result assessment (Kennerly and Neely,
2002; Sharma and Gadenne, 2002), and training (Boon and Ram, 1998; Brah et al, 2000)
37
for employees, suppliers, and even customers. Apart from that, Ishikawa (1976) has
emphasized on total quality control. He too stressed the need for training foremen and
employees to improve quality. He advocated the use of cause-and-effect diagram to
diagnose quality problems. One of his main concerns has been the collection of data
regarding quality and their use by production workers and first line supervisors. He
has been a leader in stressing employee participation and introducing quality circles
in organizations as a tool for problem solving.
Swanson (1995) discussed that the key ingredient to begin the quality journey is senior
management's commitment to openly and genuinely embrace the quality concepts be
willing to change, provide the resources, and create an environment in which the change
will be successful. He adds that besides top management's support for quality, quality
management can be described in terms of several key characteristics: well trained
employees, product/service design and process management, employees responsibility
and commitment and decisions based on facts, statistical data and knowledge data
(Ho and Cicmil, 1995; Raghunathan et al, 1997; Llopis and Tari, 2003). Juran and Gryna
(1993), deliberated on universal processes for managing quality. They stress that to
manage quality, among the other things, one should do is develop product and process
features, and measure actual performance.
Among the attributes for successful TQM is the customer orientation (Westbrook,1993;
Solis et al., 2000; Jones and Ryan, 2002), i.e. the customer-orientated organization advises
the customers on cost effective alternatives. It is also argued that employee relations in
terms of teams forming across functional departments and continuous improvement
(process management) are the driving forces behind problem solving and the criticality
of training in an organization.
Salazar (1994) writes that top management cannot delegate quality but instead, TQM
must start in the boardroom and spread through all levels in the organization. In the
employee relation aspect, he stressed that everyone on the payroll must assume
responsibilities for quality. Angeli et al. (1998) contend that that leadership for quality
management through culture change must come from the executive level and not a
bottom-up process. In addition, Ahire and O'Shaughnessy (1998) argue that top
management must go beyond merely adopting slogans of improving quality and
actually become involved in quality efforts at various planning, implementation and
monitoring phases.
Benson et al. (1991) concluded that generally the ideal quality management should not
be affected by organizational quality context while the current quality management is
believed to be influenced by the organizational quality context. Deming (1986) and
Crosby (1979) writes that generally the expectations regarding ideal quality
management should be context-free. In addition, Juran et al. (1988) state that ideal
quality management is "universal" and suggest that the expectations regarding quality
management should be the same regardless of the context.
38
Organizational Quality Context
The managers' quality environment is referred as "organizational quality context". It
is described using variables such as degree of corporate support for quality, company
size, marketplace conditions and types of products and processes. Frequently cited
organizational quality context variables that may affect the practice of quality
management, according to Benson et at., (1991) are: managerial knowledge, corporate
support for quality, product/process, contextual variables, past quality performance,
marketplace contextual variables, company size, and manager type. Hua et al. (2000)
referred organizational quality context to include the dimensions of leadership,
processes, policy and strategy, people management, employee involvement, quality
assurance, supplier quality, business results, customer satisfaction, and impact on
society.
Deming (1986) and Juran (1986) have suggested that the better the top managers'
knowledge on quality concepts, theories and techniques, the more likely they are to
make improvements in quality within their organizations. Further from this, Juran
(1994) emphasizes that in order to attain world-class quality levels, the entire managerial
hierarchy must be trained in how to manage for quality. In today's world where
technology is progressing in leaps and bounds, the knowledge possessed by managers
must be constantly updated. Managers must take the responsibility for learning,
relearning and directing themselves to master skills, knowledge and tools that keep
changing as the time goes by (Flohr, 1987; Angeli et al, 1998; Teare et al, 1999).
Senior managers must personally take charge of managing quality (Juran, 1994; Angeli
et al., 1998; Corbett and Rastrick, 2000). Senior corporate management's support for
quality may take many forms including setting policies and goals in the area of quality,
treating quality as a strategic variable, rewarding employees on the basis of quality
achievements and making resources available for quality improvement (Crosby, 1979;
Juran and Gryna, 1993; Ahire and O'Shaughnessy, 1998). As a real life example, the
CEO of Coming Glass, Houghton (1987) proves that his commitment and involvement
has motivated the implementation of TQM in his organization. Similarly, GTE Supply
learned that the commitments and involvement of the organization's leaders are vital
for success of quality. The actions taken by GTE Supply leaders were crucial in setting
up a successful quality improvement environment (Drew and Fussell, 1996).
High rate of change of product/process design may cause disruptions in quality
management (Garvin, 1983). The higher the degree of manufacturing content as
compared to service content, the better the environment for quality management, as
manufacturing content is associated with more highly evolved, more routinised quality
management practices (Benson et al., 1991). High complexity of product/process
adversely affects quality management. A low portion of product purchased externally,
a high level of batch content (Schonberger, 1982; Garvin, 1983), designs with numerous
parts and complicated assembly steps (Daetz, 1987) are situations which create a more
complex product/process environment (Hua et al., 2000). To increase effectiveness of
quality management and to avoid having unreliable goods produced, we should strive
for simplicity in the manufacturing process (Daetz, 1987).
39
Past quality performance is expected to be one of the functions of the present level of
quality management in an organization (Benson et al.f 1991). Some organizations are
coerced into investing in quality systems by their customers (Wenmoth, 1987; Zairi,
2000), since quality today means meeting customer requirements. However, in order
to be successful, organizations have to embrace "customer enthusiasm" (Sarazen, 1987)
or "superior customer value" (Lee et al., 2001), which is to exceed customer expectations
to the point where they are so excited about the product. Fundamental to ongoing
success are the periodic measurement of results and feedback of the measurements to
those involved.
It is generally perceived that competition will result in higher levels of quality (Deming,
1986). Similarly, Wasmuth (1986); Solis et al. (2000); Lee et al (2001); Jones and Ryan,
(2002) highlight that more frequently than not, the quality organization is affected by
requirements of the customer. However, Fechter (1993) disagrees by saying that this
effect is only for short term, while in the long run, competition is detrimental as it
results in decline of information flow, filtered information, low morale and loss of
intrinsic motivation. Fechter supports co-operation and teamwork amongst employees
instead.
Wasmuth (1986) writes that large organizations have the facilities and finances to
maintain systems and records, which, although desirable, may be well beyond the
means of a smaller organization. Wenmouth (1987) discusses that organization size
may positively influence quality management as larger organizations tend to devote
more resources to organizational quality programs than smaller organizations.
Type of managers is believed to have an influence on quality management too as
different types of managers would have different perceptions of quality management
as a result of their different backgrounds (Benson et al. 1991; Jones and Ryan, 2002).
From the above literature, we can summarize that proper management of the eight
areas of quality management can lead to improved quality performance or to the
maintenance of a high level of quality in an organization. The literature also describes
that the current quality management may be affected by many quality context variables.
As for ideal quality management, the literature supports the proposition that contextual
variables do not affect it.
Relationship between Organizational Quality Context and the Current and Ideal
Quality Management
The seven organizational quality context variables are as suggested by Benson et al.,
(1991) - Managerial knowledge, Corporate support for quality, Product/Process
contextual variables, Past quality performance, Marketplace contextual variables,
Company size, and Manager type.
The literature suggests that the higher the quality knowledge among the managers,
the greater the current quality management as the managers are likely to implement
more quality related programs in their organization. The corporate level support for
quality is important for the organization to achieve superior quality performance. The
40
top management must be solidly behind the organization's quality efforts, for example,
by making the resources available for quality improvements. The higher the degree of
product/process complexity and instability, the more it may affect current quality
management adversely. For example, frequent redesigning would tend to cause
disruptions in quality management since these conditions create a more complex
product/process environment. Another important contextual variable is the past quality
performance. The present level of an organizations' quality management practice is a
function of the organizations' past quality performance. Organizations with higher
demand of marketplace contextual variables are likely to have higher levels of quality
management. For instance, an organization facing stiff competition in terms of price
would tend to focus on cost reduction through the pursuit of quality improvement in
all of its processes. Organization size may positively influence current quality
management since larger organizations tend to devote more resources to organize
quality programs than smaller ones. Finally, the different types of managers are believed
to have an influence, on the quality management as different managers from different
background would have different perceptions of quality management.
While current quality management is believed to be influenced by organizational quality
context, ideal quality management should not be affected by contextual variables as
ideal quality management is "universal" and so the expectations regarding quality
management should be the same regardless of the context.
Methodology
The population of the study consists of Quality, Production, Finance/Accounts and
Human Resources Managers of manufacturing organizations in Northern Malaysia.
While the limited geographical scope of the study could limit generalizibility of the
study results, the area offers a well-diversified industrial area. The list of all the
organizations relevant to the population of the study was obtained from Penang
Development Corporation (PDC) and from other locally available sources. The PDC
list alone revealed that there are 676 registered manufacturing companies operating in
Penang. The unit of analysis was the individual, i.e. the Quality Managers, Production
Managers and Accounts/Finance or Human Resources Managers who responded to
the survey. Three sets of questionnaires were distributed to each of the 190 organization
chosen and the questionnaires were attached to Quality Assurance Manager, Production
Manager and Finance/Accounts Manager or Human Resources Manager of the
organization.
The variables and measures used in the questionnaire are based on the one developed
by Saraph et al. (1989) and Benson et al. (1991), used in their empirical investigation on
the effects of the organizational context on quality management and modified to take
care of the local environmental and cultural issues of importance. Both ideal and current
quality management were measured in terms of the eight comprehensive, critical
dimensions of effective quality management. Forty-four separate items have been used
to measure the eight critical dimensions of quality management. Five point likert scales
were used in the questionnaire. The independent variable organizational quality context
was measured using twenty-two items also on five point likert scales.
41
Results
Out of the 190 questionnaires distributed, 116 questionnaires were received. Eight
questionnaires were either incomplete or incorrectly filled. Discounting these, a total
of 108 questionnaires were used, thus representing a 56.8 percent usable response
rate. A majority of the respondents are from the age of 31-40 years; 87.6 percent are
male while only 12.4 percent are female. As for educational level, 98.1 percent of the
managers who responded have diploma level and above qualification. The two different
groups of managers contacted for the survey were Quality Assurance/Production and
Finance/Human Resources Managers. In terms of number of years of service with the
present company, the mean year is about 5.8 years. The size of organization varies
from 30 employees to 7000 employees with the mean at 1739 employees. The average
number of years of organization in existence is 9.3 years. About half of the respondents
are from electronics/electrical and medical supplies manufacturing companies. Most
of the respondents are from multinational corporations with ISO 9000 certification.
The reliability of variables of ideal and current quality management was analyzed
using SPSS reliability analysis. The cronbach alpha values for all the variables turned
out to be quite good ranging from 0.78 to 0.91. Cronbach alpha for the independent
variables organization quality context ranged from 0.15 to 0.94. Due to the low reliability
coefficient of the product or process environment, the said variable was dropped from
the analysis, leaving a new range of 0.56 to 0.94 which is considered to be acceptable
for further statistical analysis (Davis and Cosenza, 1985).
Test of Difference for Current and Ideal Quality Management Variables
Paired t test was performed on pairs of ideal and current quality management
variables to investigate if there are differences in the perceptions of managers
between the current and ideal quality management variables. A summary of the
tests of difference tabulated in Table 1 indicates that at 5 % significance level, there
are significant differences in the perceptions of the managers between the current
and ideal quality management variables. In order to check for the difference between
the current and ideal quality management variables, the following hypothesis has
been formulated.
HI: There are no significant differences between ideal and current quality management
from the perspective of size of organization, type of managers, MNC vs local companies,
and ISO certification status.
In terms of size of organization, the sample was divided into small (<1001 employees)
and large (>1000 employees) organizations; for type of manager, the respondents were
grouped into two groups - one group of QA and Production managers and the other
consisting of Finance and HR managers; MNC and non-MNC organizations were
divided accordingly, while for ISO certification status, the sample was divided into
three - those ISO certified, those not certified and those which were in the pipeline as
shown in table 2.
42
At 5 % significance level there are no significant differences in perceptions of managers
towards all current and ideal quality management variables for type of manager and
MNC/non-MNC type of organization. However, for the size of organization, there
are significant differences in the perception of managers on the current organizational
top management leadership for quality, current training, current supplier quality
management and current quality data and reporting.
For ISO certification status, which indicated in table 3, there are significant differences
at 5% significance level in the perceptions of managers on current role of quality
department and current training. The managers from companies whose ISO 9000
certification is in progress perceive the current role of quality department and current
training differently from managers of companies that are ISO 9000 certified.
H2: Managers' perceptions of current quality management are not influenced by
organizational contextual variables.
Multiple regression analysis was used to detect the influence of organizational context
on current quality management and ideal quality management. At 5 % significance
level, at least one independent variable (organizational quality context) acts as a
significant contributing factor towards each of the dependent variables (quality
management). Corporate support for quality, managerial knowledge, past quality
performance and size of organization are significant contributing (positively) factors
towards the perceptions of managers on current quality management (Table 4).
H3: Managers' perceptions of ideal quality management are not influenced by
organizational contextual variables.
The multiple regression results indicates that at 5 % significance level the managerial
knowledge and marketplace environment are significant contributing (positively)
factors towards the perceptions of managers on ideal quality management (Table 4).
Discussion
Tests of difference for current and ideal quality management variables show significant
differences in the perceptions of the managers between the current and ideal quality
management variables. The higher rating for ideal quality management shows a gap
between what is currently happening and their ideal perception of quality. This result
shows that management has to put in a stronger effort and emphasis to improve current
practice to meet the satisfaction of their employees.
The tests of difference between current and ideal quality management variables and
selected demographic variables also show significant differences between small and
large organizations in terms of the perception of current training, supplier quality
management and quality data and reporting. This could also be due to more and better
resources available to be utilized for these systems and activities. Furthermore, large
organizations would probably have customers with more stringent requirements and
in order to fulfill these requirements, the training of their staff and the development of
43
their suppliers through supplier quality management must be given more attention as
compared to small organizations. Where quality data and reporting is concerned, in
large organizations, it is inevitable that better communication systems be in place in
order to ensure that information is disseminated to all the relevant people in the
organization in a timely manner. Thus, quality data have to be handled through more
efficient reporting and communication channels.
From the results it can be concluded that managers' perceptions of both current and
ideal quality management are influenced by some of the organizational quality context
variables. However, a comparison of R2 values for the multiple regression of current
quality management/organizational quality context (ranging from 0.40 - 0.66) with
that of ideal quality management/organizational quality context variables (ranging
from 0.17 - 0.36), indicates that while perceptions of managers on ideal quality
management is still influenced, the degree of influence is less compared to current
quality management. This finding is somewhat similar to that of Benson et al. (1991),
that the perceptions of managers on ideal quality management while not context-free,
do not systematically differ over a wide range of contextual variables.
The results indicate that the perceptions of managers on ideal quality management are
affected only by managerial knowledge and marketplace environment from the seven
variables/factors tested while perceptions of managers of current quality management
are influenced by all the contextual variables tested except for marketplace environment
and type of managers.
The findings regarding the two factors affecting ideal quality management, is in
accordance with previous studies whereby ideal quality management is strongly linked
to managerial knowledge as well as external quality requirements by customers that
influence managers' perceptions about how quality should be managed. As mentioned
by Deming (1986) and Juran (1986), managers with wider scope of knowledge, especially
knowledge related to quality aspects would be better equipped with information on
quality standards and quality improvement methods to bring quality improvements
within their organizations. It is, therefore, believed that such managers, since they
have the skills and ability, would have higher ideals of the level of quality management
that they would like to achieve when compared with managers who are less
knowledgeable.
Benson et al. (1991), however found corporate support for quality as another significant
factor affecting ideal quality management (which in this study, was not). A possible
reason for this difference in results could be due to the fact that many of the respondents
were from multinational corporations where top corporate management is housed at
the parent company far away, and therefore, it is the local top management support
and not the corporate support that affects the local managers.
Current quality management was found to be affected by four organizational quality
context variables. They are the corporate support for quality, managerial knowledge,
past quality performance and size of the organization. Numerous authors have stressed
the importance of corporate support for the successful implementation of quality
44
management (Crosby, 1979, Juran and Gryna, 1993; Drew and Fussell, 1996;
Raghunathan et al, 1997; Sohail and Hoong, 2003; Llopis and Tari, 2003). Top
management in many organizations have realized the importance of their support and
as the need for quality improvement is increasingly felt top management support for
quality, both in terms of allocation of resources as well as moral support, is felt now
more than ever before. The results of this study show that this significance of top
management support for quality is apparent even in our local manufacturing
environment.
As discussed earlier on the effect of managerial knowledge on ideal quality
management, it is also certain that with their better knowledge on quality concepts,
theories and techniques, the more likely are these managers to make positive changes
in quality management in their organizations. Thus, managerial knowledge would be
a contributing factor towards current quality management as indicated in the results
of the study.
The finding that the present level of an organization's practices is a function of the
manager's past quality performance is in agreement with the findings of Benson et al.
(1991). The past quality performance affects the present, perhaps due to the
establishment of new or revised objectives and practices (based on the past performance)
that shape the present performance.
Organization size was found to significantly influence current quality management as
larger organizations tend to devote more resources to organizational quality programs
than smaller ones (Wasmuth, 1986; Wenmouth, 1987; Benson et al. 1991). Size of an
organization affects current quality management as larger organizations have more
resources allocated for quality activities and, thus, have better quality systems when
compared to smaller organizations.
Where the ISO 9000 certification status was concerned, there are significant differences
in the perceptions of current role of Quality Department and training between managers
in organizations which were in the progress of obtaining ISO 9000 certification and
those in ISO 9000 certified organizations. Managers from ISO 9000 certified companies
perceive the current role of Quality Department and current level of training higher
than managers from organizations in the process of obtaining certification. Perhaps
this is because managers from ISO 9000 certified organizations have experienced and
witnessed the role of Quality Department and training in helping to improve the
organizations' performance, especially in the quality management aspects. Furthermore,
with quality and training functions in the ISO certified organizations being well
documented, it is quite possible that effective quality and training functions can be
carried out without much difficulty in these organizations.
One would expect that in their perceptions towards current quality management, the
managers of organization which are not ISO certified would be significantly different
from managers of organizations with ISO certification. However on the contrary, the
results indicate that managers from organizations without ISO 9000 certification do
not perceive the current role of Quality Department and current training differently
45
from managers of the other two groups. This is possibly because managers from
organizations without ISO 9000 certification do not realize the shortcomings in their
quality systems, as they most probably do not know the requirements and the
importance of the ISO 9000 quality system. On the other hand, the managers of
organizations in progress of ISO 9000 implementation realize the lacking of their quality
systems and this would possibly cause them to have different perceptions of current
role of Quality Department and current training from managers of ISO certified
organizations.
Managerial knowledge is an important factor in implementing successful quality
management. As such, organizations must emphasize continuous development of their
managers on quality. It is only when there is awareness, that managers can then work
on improving and implementing sound quality management. The ISO 9000
requirements are an area from which managers can gather knowledge of quality
management systems and it is found that exposure to ISO 9000 requirements does
make a difference in the levels of quality management in organizations. Managers of
non-ISO certified organizations perceive their quality management to be relatively
good although they do not have the required quality systems in place, as they are
unaware of their shortcomings. Therefore, knowledge and awareness must be
continuously upgraded for organizations to be ahead in quality management.
The study was conducted on manufacturing organizations only. Therefore, the results
cannot be generalized to the service industries as the quality management in the service
industries differs in many aspects from quality management in the manufacturing
sector.
Table 1
Summary of Paired t Tests for Current and Ideal Quality Management Variables
Quality Management Variables
Mean
t-value
2-tail Sig
3.74
Role of Org. TopMgmt & Quality Policy (Current)
Role of Org. Top Mgmt & Quality Policy (Ideal)
4.59
13.68
0.000
Role of Quality Department (Current)
Role of Quality Department (Ideal)
3.53
4.46
17.14
0.000
Training (Current)
Training (Ideal)
3.13
4.36
16.15
0.000
Product Design (Current)
Product Design (Ideal)
3.37
4.44
14.44
0.000
Supplier Quality Management (Current)
Supplier Quality Management (Ideal)
2.96
4.23
16.82
0.000
Process Mgmt/ Operation Procedure (Current)
Process Mgmt/ Operation Procedure (Ideal)
3.23
4.38
17.56
0.000
Quality Data and Reporting (Current)
Quality Data and Reporting (Ideal)
3.41
4.39
14.79
0.000
Employee Relations (Current)
2.93
4.24
16.46
0.000
Employee Relations (Ideal)
Significant at 5 % level of significance
46
Table 2
Summary of t Tests Results for Current and Ideal Quality Management and
Demographic Factors
Ideal
Demographic
Variable
Dependent Variable
Current
(Quality Management)
t-value
2-tail
sig.
t-va!ue
2-tai)
sig.
Si/e of
Organization
Organizational lop management
3.13*
1.53
3.28*
1.85
2.12*
1.73
0.002
0.130
0.001
0.068
0.037
0.086
0.444
0.087
0.140
0.136
0.529
2.53*
1.44
0.013
0.152
0.77
1.73
1.49
1.50
0.63
2.03
1.56
1.74
0.93
0.14
0.10
0.356
0.55
Employee Relations
1.55
0.58
0.87
0.23
0.29
0.886
0.922
0.127
0.566
0.384
0.822
0.773
1.17
1.49
1.41
0.99
1.52
1.32
1.12
0.5 84
0.244
0.140
0.163
0.323
0.133
0.189
0.267
Organizational lop management
leadership Role of Quality Department
Training
Product Design
Supplier Quality Managemeni
Process Management
Quality Data and Report
Employee Relations
0.54
1.07
1.59
0.68
0.10
0.35
0.83
0.90
0.595
0.286
0.116
0.500
0.921
0.725
0.410
0.369
0.41
0.49
0.08
1.20
0.09
0.30
0.12
0.57
0.684
0.628
0.937
0.235
0.932
0.765
0.904
0.571
Training
Product Design
Supplier Quality Management
Process Management
Employee Relations
Type of
Managers/
Designation
MNC/non-MNC
Type
Organizational top management
Training
Product Design
Supplier Quality Mai agemenl
Process Managemeni
0.055
0.123
0.085
* Significant at 5% level of significance
Table 3
Summary of One - Way AN OVA Results for Current and Ideal Quality Management
and Demographic Variables
Demographic
ISO
Certification
Status
Current
Dependent Variable
Organizational top management leadership
Role of Quality Department
Training
Product Design
Supplier Quality Management
Process Management
Quality Data arid Report
Employee Relations
Significant at 5% level of significance
47
F
Ratio
1.99
3.63*
5.20*
0.07
0.07
2.24
1.03
0.83
P
Values
0.142
0.030
0.007
0.932
0.935
0.111
0.360
0.440
Ideal
F
Ratio
Values
(1. 1 3
0.879
0.86
0.47
1.79
0.05
1.80
2.04
1.33
0.425
0.625
0.173
0.951
0.171
0.135
0.268
P
Current
Quality
Management
Ideal
Quality
Management
'55
V
ft
Size of
e
_WJ
Orgnization
5^|
Past Quality
Performance
frg-O
Market
.£»
20 Ia. '-53
Environment
o>
Managerial
Knowledge
Variables
Independent
Table 4
Multiple Regression Results between Organizational Quality Context and Current/
Ideal Quality Management
B Coeff
0.1H
0.31
0.29
0.20
P Val.
0.04
0.002
0.003
0.023
R 2 Vat.
0.66
B Coeff
0.27
0.33
P Val.
0.004
0.001
R 2 Val.
0.36
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51
A STUDY ON COMPETITIVENESS OF FOOD CROPS PRODUCTION IN
MALAYSIA
By
Shahida Abu Bakar
Consultant, Industrial Research Division
National Productivity Corporation
Mazlina Shafi'i
Consultant, Industrial Research Division
National Productivity Corporation
Abstract
This paper discusses on the competitiveness of selected food crops production in Malaysia. The
concept "competitiveness" has been a current issue of interest in both economic and business
terms. Any effort to inculcate this concept to the local farmers will need a different spectrum of
understanding to disseminate this message on competitiveness. This is important, as Malaysia
has been importing RM766.7 million worth of vegetables in 2002. This paper attempts to
understand the farming practices by local farmers, the issues facing them and measure the cost
competitiveness of selected farm products. The study concentrated on four major vegetables
producing regions; namely, Cameron Highlands, Johor, Miri and Kundasang. Benchmarking
analysis was carried out on the production costs of respective region. The paper concludes with
some useful recommendations to enhance the productivity and quality of food crops production
in Malaysia.
Introduction
Competitiveness is among major concerns in the world economy today. To be
competitive is to have sustainable growth in productivity. Staying competitive is the
challenge especially for the developing countries. Competitiveness can be examined
from various perspectives. In the context of agriculture, competitiveness is measured
in terms of how efficient is the farming system in controlling or minimising the use of
farm inputs and ensuring that the farming communities receive a sustainable economic
returns from the farm produce without sacrifying quality (Swaninathan, 2003).
Malaysia has imported RM766.7 million of vegetables in the year 2002 (Business
Development Center, 2003). The high import bill was due to the importation of mainly
temperate vegetables that cannot be produced successfully in Malaysia. Some of the
imported temperate vegetables are onion, shallot, potatoes, garlic and carrots. However,
RM188.5 million was earned from exports and re-exports of vegetables mainly to
Singapore. The majoi export and re-export of vegetables are onion, shallot, cucumbers,
garlic and tomatoes. In terms of comparative advantage, Malaysia is not as competitive
as compared with India, Thailand and Netherlands in producing onion and shallot. In
order to be competitive, several factors have to be considered such as costs of
production, pricing and quality of vegetables. Hence this study examines how
competitive are our local vegetables farms in selected regions in producing the farm
produce in the light of stiff competitions from imported vegetables of neighbouring
countries.
53
Definition
Competitiveness has been defined as the ability of the nation to meet the test of free
international markets while expanding real incomes at home. It focuses on the
sustainable increase in productivity as a result of better business strategies and
improved micro and macro economic conditions (Waves, 2002).
Competitiveness is not about picking winners and losers but rather is seen as a process
of change. Given existing policies and economic structure, competitiveness indicates
whether a firm or set of firms could successfully compete in the trade of the commodity
in the international markets. Porter (1990) claimed that innovation and technological
enhancements are essential to maintain competitiveness on a continuing basis.
Objectives of the Study
i.
ii.
To measure competitiveness of the cost production for selected crops at the
farm level
To examine some of the best practices at the farm level
Scope and Limitation
This study examines the cost of production of selected vegetables at selected farms.
Types of vegetables selected for this study are green mustard, cucumber, tomato, round
cabbage, salad, lady's finger and lettuce. The data collected at the farm level cover
respondents from 4 vegetable growing regions namely, Cameron Highlands, Johor
(covering Skudai and Kota Tinggi), Miri and Kundasang.
Cameron Highlands is chosen as one of the study location as it is the major vegetables
producing region. Johor is chosen to determine whether its proximity to Singapore
has any effect in terms of logistic and marketing at both national and international
level. Miri as well as Kundasang are chosen in this study due to their proximity to
Brunei, a major importer of Malaysian vegetables.
Methodology and Analysis
Types of data collected in this study include both primary and secondary data. Primary
data was collected from 29 respondents at the farm level from the 4 regions. Secondary
data was also obtained from the Department of Agriculture, Federal Agricultural and
Marketing Authority (FAMA), and Malaysia Agriculture Directory & Index 2001/2002
as a counter-check on the validity and reliability of the collected primary data.
The key focus of analysis in this study was to compute and compare price
competitiveness and cost of production in producing the different types of crops at
the different farms. There are two types of competitiveness measures used in this
study; namely, (a) selling price of vegetables as compared with its estimated price,
and (b) cost of production in terms of labour, seeds, fertilizer, chemicals and other
costs.
54
Observations and Findings
Table 1
Price Competitiveness of Selected Vegetables
Types of
Vegetables
RM/kg
Miri
Farmers
Kundasang
Farmers
(RM)
(RM)
(RM)
(RM)
0.93
0.55
1.40
1.96
N/A
Cabbage
0.74
0.62
N/A
N/A
1.30
Cucumber
0.54
0.40
N/A
0.80
N/A
Lettuce
1.50
1.23
1.10
N/A
N/A
Tomato
1.59
2.93
N/A
N/A
1.80
PA MA
Estimated
Prices
Cameron
Highlands
(RM)
Mustard
Johor
Farmers
Farmers
Green
Lady's Finger
1.59
N/A
1.60
N/A
N/A
Chillies
3.02
3.00
3.30
N/A
N/A
Sweet Potato
0.62
N/A
0.90
N/A
N/A
Kail an
1.56
N/A
2.00
N/A
N/A
French bean
2.29
3.50
N/A
N/A
N/A
Source: National Productivity Corporation, Malaysia
Note: FAMA estimated prices are based on ex-farm price as at 2001
FAMA estimated prices are used as the yardstick for the farmers to gauge their farm
prices. FAMA has a Market Intelligence Unit that does market price forecasting on a
daily basis. As such, FAMA is the authority for monitoring prices of farm produce in
the country.
From Table 1, we observed that the price for tomatoes and lettuces produced by the
Cameron Highlands' farmers were higher compared to the other regions. There are
many factors that contributed to the price differences of these vegetables; such as the
quality and size of the vegetable, location of the farms, transportation costs, price of
chemicals, labour costs, state policy and the marketing systems adopted. Miri
commanded higher premium for its green mustard compared to Johor and Cameron
Highlands. This is due to better agronomic practices adopted such as the use of netting
system that has resulted in better quality output, and hence, higher farm price.
Table 1 also shows the price differences between the estimated vegetables price
compiled by FAMA and the actual price received at the farm level of Cameron
Highlands, Johor, Miri and Kundasang. For the green mustard, the ex-farm price at
Cameron Highlands was 0.55 cents per kilogram (kg). This was lower than the estimated
price of 0.93 cents per kg by FAMA. The findings also indicated that Johor and Miri
farmers experienced a higher price of RM1.40 and RM1.96 per kg for green mustard
respectively. The reason for this is the market potential. Johor farmers export the farm
55
produce to Singapore, Taiwan and Hong Kong. As for Miri farmers, Brunei is one of
the major importers of their farm produce.
Lettuce was the only vegetable where the price recorded was below the estimated
FAMA price. As lettuce is a highly perishable vegetable, it must be consumed within
one day after harvesting to maintain its quality. Thus, its price is highly volatile due to
both demand and supply condition. The price for lettuce in Johor was only RM1.10
per kg as compared to RM1.23 per kg in Cameron Highlands. Both the prices were
lower than the estimated FAMA price of RM1.50 per kg. The lower price connoted
over supply that compelled the farmers to sell their produce at a price lower than the
recommended FAMA price to cut down on harvest loss.
There were some vegetables from Johor that recorded higher price as compared to the
estimated price. The vegetables were green mustard, lady's fingers and chillies. The
price of cabbage from the Cameron Highlands' farmers was 0.62 cents per kg compared
to the Kundasang farmers' price of RM1.30 per kg and FAMA's estimated price of 0.74
cents per kg. Tomatoes from the Cameron Highlands recorded a price of RM2.93 per
kg compared with its estimated price of RM1.59. Similarly, French bean's price was
quoted at RM3.50 per kg compared to the estimated price of RM2.29. Tomatoes and
French bean are high value crops that enable the vegetables to command higher market
prices.
Overall, Cameron Highlands' farmers are more competitive compared to their Johor,
Miri and Kundasang counterparts. The reasons are as follows:
i)
ii)
Cameron Highlands' farmers serve a larger market as more than 50% of the
country's vegetables suppliers originates from here
Cameron Highlands' farmers are more organised and adopt intensive farming
system to optimise land usage and economic returns
iii)
The cool climate conditions enable the farmers to cultivate higher value crops
such as tomatoes, lettuces and cabbages,
iv)
Cameron Highlands' farmers are more organized in their distribution network.
DOA or the Department of Agriculture is the authority for input cost. DOA provides
farm management and extension / advisory services to the farmers. Its main task is to
do cost computation on the production of the different types of vegetables and fruits.
Table 2 shows the cost differences between Cameron Highlands, Johor, Miri and
Kundasang farmers in producing the different types of vegetables such as green
mustard, cabbages, cucumbers, chillies, tomatoes and lettuces. The differences can
also be observed between the data collected at the farm level and the estimated costs
of the Department of Agriculture.
56
Table 2
Cost Competitiveness of Selected Vegetables per Hectare
Types of
Vegetables
RM/ha
Johor
Farmers
Miri
Sarawak
Farmers
Kundasang
(RM}
(RM)
(RM)
(RM)
2495
1976
53
2706
587
1765
2803
335
1583
651
45
N/A
2606
286
3023
1195
1099
DOA
Estimated
Costs
Cameron
Highlands
(KM)
Farmers
Sabah
Farmers
a} Green Mustard
i) Labour
ii) Seeds
N/A
iii) Fertilizers
iv) Chemicals
v) Other Costs
b) Cabbage
i) Labour
ii) Seeds
iii) Fertilizers
iv) Chemicals
4785
450
6345
1350
1930
390
1729
1568
1781
8466
556
3124
4976
1764
N/A
N/A
N/A
2882
296
741
823
760
3881
203
1694
v) Other Costs
c) Cucumbers
i) Labour
ii) Seeds
iii) Fertilizers
N/A
vi) Chemicals
vii) Other Costs
d) Chillies
i) Labour
ii) Seeds
iii) Fertilizers
N/A
1 8260
56
6793
1261
16901
16080
1800
7107
1510
7 ISO
13356
1511
3720
1066
5122
N/A
5409
165
2738
3052
iv) Chemicals
5558
56
747
754
5171
N/A
1383
175
N/A
N/A
v) Other Costs
e) Tomatoes
i) Labour
ii) Seeds
iii) Fertilizers
iv) Chemicals
v) Other Costs
g) Lettuces
i) Labour
ii) Seeds
iii) Fertilizers
iv) Chemicals
v) Other Costs
2052
57
N/A
3705
1050
5372
1027
15
1 1 856
1630
N/A
3260
1309
1630
N/A
N/A
Agriculture (DOA) at Cameron Highlands. The estimated costs from DOA Cameron
Highlands were being used for comparison purposes as the figures were the latest
available data to compare with the actual costs of production at the farm level.
The types of seeds used by the farmers are imported seeds from Taiwan and China, as
well as local seeds. The fertilizers used are chicken dung, NFK, Behn Meyer, compose
and also some imported fertilizers from Germany. The pesticides used are Litchin,
Yellow Powder and M45 ; while the weedicides used are Roundup, Gramoxone and
Basta 15. It was noted that cases of farmers using excessive chemicals are still rampant.
Besides fertilizers and chemical costs, other costs incurred in producing the selected
vegetables are bamboo sticks, nylon strings, papers, plastic sheets, carton boxes, rattan
and plastic baskets, and costs of transportation.
Table 2 also indicates that the labour cost per hectare in producing green mustard was
the highest for Miri farmers at RM2803 compared with Johor farmers at RM1976 and
Cameron Highlands farmers at RM2495. The reason for the higher labour cost in Miri
is due to the higher cost of living and keen competition for labour with other industries,
especially the oil refinery industry. The labour cost in this study included the cost of
initial land preparation per harvesting period. In terms of seeds cost, Cameron
Highlands was the highest at RM390 compared to the other three regions. This is
because Cameron Highland farmers purchased the quality seeds directly from Taiwan.
Except for fertilizers, chemicals and the other costs for producing the green mustard
also showed the highest in Cameron Highlands at RM1568 and RM1781 respectively.
The reason for the lower fertilizer costs incurred by the Cameron Highlands farmers is
due to the excessive usage of chicken dung.
The cost of producing round cabbage in Cameron Highlands was higher than that of
Kundasang. The high production cost was due to the high labour cost of RM8466 per
hectare compared with the labour cost of RM2606 per hectare for Kundasang. The cost
of chemicals was RM4976 in Cameron Highlands as compared with the costs of RM1195
for Kundasang. Likewise, the cost of fertilizers was also higher in Cameron Highlands
amounting to RM3124 as compared with the RM3023 for Kundasang. The amount of
other costs in producing the round cabbages was recorded as RM1786 at Cameron
Highlands compared with the cost of RM1099 for Kundasang. The lower cost of
chemicals and fertilizers at Kundasang was due to the fertility of the soil in Kundasang
as compared to Cameron Highland. The other factor is that, most of the farming
activities in Kundasang are carried out on newly cultivated farm lands which are rich
in soil nutrient.
The cost of producing the cucumbers also indicated a difference between Johor and
Miri farmers. As shown in Table 2, the cost for labour, fertilizers and chemical incurred
by Miri farmers in producing cucumber were higher than those of the Johor farmers.
This was due to the difficulties in getting the supply of fertilizers and chemicals in
Miri, as well as the high price of imported fertilizers and chemicals.
There was also the difference in the cost of production for chillies between Cameron
Highlands and Johor farmers. The labour cost in Cameron Highlands was much higher
58
at RM18260 per hectare compared with the RM5558 per hectare for Johor farmers. The
lower labour cost achieved by the Johor farmers was due to the adoption of integrated
farming where labour costs can be apportioned by the number of crops cultivated.
However, the cost for seeds at both regions was the same at RM56 per hectare.
Compared with the Johor farmers, the high production cost for chillies at Cameron
Highlands was further contributed by other high input costs such as fertilizers,
chemicals and other costs.
Tomatoes also indicated differences in the cost of production between the Cameron
Highlands and Kundasang farmers, and the DOA cost estimations. Compared to
cabbage, the estimated costs for tomatoes were much higher than the actual costs
incurred by the Cameron Highlands and Kundasang farmers in terms of labour,
fertilizers, chemical usage and the other costs. The estimated labour costs of tomatoes
by the DOA was RM 16080, but the data collected at the farm level showed that the
labour cost was only RM13356 for Cameron Highlands farmers and RM11856 for
Kundasang farmers. The Cameron Highland and Kundasang farmers are able to sustain
lower production cost for tomatoes due to good agronomic practices adopted. The
same goes for seeds cost which recorded an estimated figure of RM1800 compared to
RM1511 and RM1630 at the farm level for both Cameron Highlands and Kundasang
farmers. In terms of other costs, the estimated figure was RM7180 as compared to the
actual cost of RM5122 at Cameron Highlands.
Table 3
Cost of Production for Selected Vegetables (RM/Kg)
Types of
Vegetables
FAMA
Estimated
Costs
Cameron
Highlands
Farmers
Johor
Farmers
Miri
Sarawak
Farmers
Kundasang
Sabah
Farmers
(RM)
(RM)
(RM)
(RM)
(RM)
0.35
0.27
0.62
0.57
N/A
d) Cabbage
0.48
0.44
N/A
N/A
0.43
b) Cucumber
0.23
N/A
0.40
0.45
N/A
d) Chillies
1.32
1.40
0.83
N/A
N/A
c) Tomatoes
0.58
0.61
N/A
N/A
0.45
1.06
0.77
1.03
N/A
N/A
a) Green Mustard
e) Lettuces
59
Table 3 shows the cost of producing green mustard per kg was 0.27 cents in Cameron
Highlands, 0.62 cents in Johor and 0.57 cents in Miri compared with FAM A's estimated
0.35 cents. The higher cost in Johor and Miri was due to the higher cost of seedlings.
For cabbage, the cost of production was 0.44 cents per kg as compared with the
estimated cost of 0.48 cents per kg. The cost of production for cucumber produced by
Johor and Miri farmers were 0.40 cents and 0.45 cents per kg respectively. This was
higher than the estimated cost of 0.23 cents per kg by FAMA due to labour cost. At
0.83 cents, Johor recorded a lower cost of production for chillies compared to the RM1.40
of the Cameron Highlands' farmers and FAMA's RM1.32 per kg. The reason being,
Johor practices integrated farming compared to Cameron Highlands which faces land
scarcity that does not justify integrated farming cultivation. The cost of production for
chillies was the highest among the selected vegetables because chillies are labour
intensive that needs extra attention throughout the harvesting period of 3 to 6 months.
For tomatoes, the cost of production was higher in Cameron Highlands at 0.61 cents
per kg as compared to the estimated cost of 0.58 per kg and the 0.45 cents in Kundasang.
. In terms of the cost of production, Cameron Highlands was noted to be more
competitive in producing the sub-temperate crops of green mustard and lettuce due
to the suitability of climatic conditions, while Johor was competitive in producing
chillies using the integrated farming method.
Table 4
Import of Vegetables in *2QOQ (tonnes)
Quantity
(tonnes)
Value
(RM'OOO)
Onion & shallot
146662
126912
2
Potatoes
31187
3
Carrots and turnips
19005
4
Garlic
5
6
No.
1
Vegetable
Major
Source
India
Thailand
Netherlands
21049
Indonesia
New Zealand
Netherlands
33652
Australia
New Zealand
USA
18341
22558
China
Round cabbaee
13083
8710
Indonesia
China
Cauliflower/headed
10944
38096
Australia
China
broccolis
7
Chillies
9057
7079
Thailand
Indonesia
8
Peas, shelled or
7932
7521
Australia
China
6677
11030
My an mar
Australia
unshelled
9
Beans, shelledskinned or split
10
Other cabbage
5810
9456
China
Australia
Indonesia
11
Tomatoes
5 1 20
4764
Thailand
China
Indonesia
Source: Malaysian Agriculture Directory & Index 2001/2002
Note: * January-June 2000
60
The onion and shallot are temperate crops which unfortunately cannot be produced
successfully even in Cameron Highlands. The reason is attributed to the unsuitability
of soil to cultivate onion and shallot that are also labour intensive. As shown in Table
4, both items top the list of the most imported vegetables. Onions and shallots were
imported mainly from India, Thailand and Netherlands. In the first six months of the
year 2000, Malaysia imported 146662 tonnes of onion and shallot, and 31187 tonnes of
potatoes. Potatoes were imported from Indonesia, New Zealand and Netherlands.
The other imported vegetables were: carrots and turnips at 19005 tonnes that were
imported from Australia, New Zealand and United States of America; garlic at 18341
tonnes that was imported mainly from China; and round cabbages at 13083 tonnes
which was imported mainly from Indonesia and China.
Besides onion and shallot, cauliflower and headed broccolis which were imported
from Australia and China also registered a high import value of RM38,096 thousands.
These were followed by carrots and turnips at RM33,652 thousands, potatoes at
RM21,049 thousands, and garlic at RM22,558 thousands. Major sources of Malaysia's
imported vegetables came mainly from Thailand, Indonesia, China and Australia.
Table 5
Export and Re-export of Vegetables in *2QOO (tonnes)
(tonnes)
Value
(RM'OOO)
Onion & shallot
20,578
20,076
2
Cucumber/gherkin
13,037
5,229
3
4
5
Garlic
6,859
10,844
Chinese Mustard
5,940
3,432
Tomatoes
6
Spinach
7
Carrots and turnips
7,738
3,939
1,767
4,330
1,196
Vegetable
No.
1
Quantity
8
Long Beans
9
11
Chillies
5,063
4,531
3,249
2,711
2,588
Lady's Fingers
1 ,49 1
2,063
Source: Malaysian Agriculture Directory & Index 2001/2002
Note: * January-June 2000
From the export and re-export perspective, onion and shallot registered the highest
figures in terms of both quantity {20,578 tonnes) and value (RM20,076 thousands). The
second highest export of the food crops in terms of value was garlic at RM10,844
thousands. This was followed by tomatoes (RM7, 738 thousands), cucumbers (RM5,
229 thousands), chilles (RM4,330 thousands), spinach (RM3,939 thousands), Chinese
mustard (RM3,432 thousands), carrots and turnips (RM1,767 thousands), and finally
lady's fingers (RM1,196 thousands).
61
Most of the vegetables were exported or re-exported mainly to Singapore. As an
example, onions are imported and re-exported to Singapore through Malaysia due to
the small import volume by Singapore. It is more economical for Singapore to import
through Malaysia rather than directly from the source country.
Effective Agronomic Practices and Innovation
Some effective practice techniques were observed during the field study. An example
of the effective practices is the optimum land utilization through integrated farming.
Examples of this best practice are: farmers planting sweet potatoes in between the
young oil palm trees, and lady's fingers being planted simultaneously with long beans
to ensure double sources of income. There is also the usage of the silver shine plastics
sheet to prevent grass and other undesirable vegetation undergrowth from growing
rapidly. Besides that, a special grass called Vetiver grass is planted to control heavy
downfall/rain from destroying the crops as well as to prevent soil erosion.
Another effective agronomic practice is the usage of iron rods instead of the traditional
wooden sticks as support for the cultivation of tomatoes. Although the iron rods are
more expensive as compared with the wooden sticks, it is more durable and cheaper
in the long run. It was also observed that the crops that were grown using the netting
system could produce higher yields compared to those grown under open system. The
differences between vegetables using netting and without netting system are as follows:
•
•
With netting - minimum infestation by insects
Without netting - an estimated 80% of the crops are likely to be attacked by insects.
In terms of innovation, invented device/machine to sow (seed) is more practical and
productive. If the traditional method of sowing seeds by hand scattering is used, crops
will grow in scattered direction and need to be realigned to allow it to grow within
suitable distant and range. By using a special device to sow, seeds are used economically
(no unnecessarily seed wastage) and crops cultivation will be more organized with
minimum disruption from the wind.
A sixth effective agronomic practice observed is the usage of Basta to control weeds
rather than other weedicides especially Gramoxone. Besides being safe to use and able
to control weeds for 3 months, it will also turn into fertilizer after 2 months of
application. Gramoxone, on the hand is poisonous, poses danger to workers and can
only control weeds for about one month. Although the price of Basta is much higher
than other weedicides, the total cost involved is more economical in the long run.
Issues
The usage of big bamboo baskets or carton boxes is no longer practical. For example,
when baskets are used to sort vegetables, the task becomes very time consuming and
requires much manpower. Boxes are also bulky with not much commercial value. As
a possible solution to the problem, vegetables should be packed according to the
requests made by the customers that will add more value to the products. Vegetables
62
are currently packed using plastic baskets. Although plastic baskets are more expensive,
it was found to be durable and has multiple uses.
One of the key problems observed in Miri was the excess production of vegetables,
especially the green mustard. Due to its soil suitability, most of the farmers in Miri
prefer to plant green mustard as their main crop resulting in an over-supply of that
particular crop. Miri farmers have limited market options where they are able to sell
their products. Apart from Brunei, the farmers generally sell the products at small
markets such as 'Pasar Tamu' that are scattered around Miri. For some of the Miri
farmers who did not export their produce, they sell their produce to the retailers from
Brunei who will buy the vegetables in small quantity to avoid pesticides level inspection
at the border checkpoint. Due to the lack of knowledge on the importance of farm
management and operating as a family business only, the farmers did not keep any
farm records or transactions.
In Kundasang, strong monsoon wind during the months June to September is a major
problem for the farmers. Strong wind can blow up the stores and buildings in the farm
causing high repair costs depending on the extent of the damage. The soil at Kundasang
is fertile so the usage of fertilizer is very low in this area. This, in turn, reduces the cost
for fertiliser.
In terms of market and business potential, inefficient marketing practices such as the
absence of standard packaging affect the market values of farm produce as vegetables
are perishable items that require short market cycle time. As a solution, FAMA has
put in place the contract-farming concept where vegetables are sold directly from the
farm to major customers such as the hypermarkets and restaurants. This helps in
leveraging the market price of vegetables as well as ascertaining a continuous demand
for local farm produce. It is critical to monitor the demand and supply of local farm
products as the vegetable products from Malaysia have to compete in terms of price
and quality with imported vegetables from Kalimantan.
Other issues that have arisen are the high price of chemicals (pesticides) and fertilizers,
high cost of infrastructure/amenities and also high capital costs to initiate investment
in netting. Most farmers in Kundasang are still using traditional / conventional farming
methods compared to their counterparts in Cameron Highlands and Johor.
Recommendations
From the analysis above and the critical need to enhance the productivity of local
farmers, the researchers would like to put forward four factors for the consideration
of the respective agriculture authorities. The factors are:
a) Role of the Government
It is recommended that the Government through the relevant authorities strategise
policies that:
63
i)
Encourage more private sector participations and investment in the agriculture
sector. Currently, most of the food productions are from the small farmers who
do not enjoy economics of scale. This poses a challenge for achieving price
competitiveness for the local farm produce.
ii)
Improve the infrastructure system at farm levels to shorten the delivery time of
the farm produce to the final consumers.
iii)
Develop user-friendly and efficient marketing information system for the farming
communities. This helps to keep the local farmers in tune with the changing
market scenario globally.
b) Farmers' Role
The farmers must be willing to learn new skills and technology, be involved in
information technology (IT) development, benchmark, adapt and adopt the best
agronomic practices from successful farmers. This in turn helps the farmers to compete
effectively in the international market. The farmers need to invest in seed innovation.
As an example, China has conducted an intensive research on seed resulting in a shorter
production cycle time for mustard. The innovative mustard product is 'easy-to-eat'
and 'easy-to-cook'.
There is also a need to strengthen the Farmers' Cooperatives to ensure that all farming
activities are carried out on a consensus basis and achieve a better bargaining power
for their farm produce. Besides, farmers should ensure that their farm supply is in
accordance with customers' demand. This practice will help sustain the process of
contract farming. There is a need to improve on the packaging of the farm produce to
enable our farmers to compete effectively in the international market.
c)
Price
In terms of pricing, there is the need to consider two aspects:
i)
Pricing of the inputs
The price of inputs such as seeds, fertilizers, pesticides and weedicides need to
be stabilized and monitored from time to time. This is to ensure that the price does not
exceed the agreed gazette price or provide opportunity for any supplier or group to
monopolize the supply of the said inputs. The monitoring on the price of inputs is
crucial as the cost of these inputs form a substantial proportion of the total cost of
production.
ii)
Pricing of the agriculture produce
The agriculture produce requires a mechanism that will help to stabilize the
market value of vegetables. One way of addressing this issue is by reducing the amount
of imported vegetables for the local market. An important factor in stabilizing the
market value of vegetables is the enhancement of market information system for the
farmers. Dissemination of useful and timely information will enable the farmers to
plan their harvest accordingly.
64
d) Labour
In terms of labour, the farmers need to be advised on the required documentation
when applying for the foreign workers. There should not be any restriction on the
maximum number of foreign labour each local farmer can employ as long as they have
the means to employ such foreign labour.
Conclusion
The agriculture sector is moving rapidly from the traditional approach to that of
commercial based. At the farm level, farmers have to remain competitive in terms of
pricing due to the importation of cheaper vegetables from neighbouring countries.
Another contributing factor to the competitive issue is the unfavourable farm prices
received by the local farmers. This is because the farm produce have to pass through
different levels of middlemen along the supply chain before it reaches the final
consumers.
From the input perspectives, the local farmers have to absorb the escalating costs of
fertilizers, chemicals and other incidental costs. Besides all these financial indicators,
the farmers also have to face the risks of unfavourable weather conditions and crop
diseases that could result in substantial losses to them.
Hence, to enhance productivity and remain competitive, it is imperative that our farmers
change their mindset to move from bulk commodity product industry to "boutique
agriculture". Boutique agriculture is a practice whereby only highly specialised crops
that have sustainable market value are planted. This practice will help to command a
higher added value for the agriculture produce and ensure long-term competitiveness
for the agriculture sector.
Furthermore, there is a need to further develop the biotechnology of plant genetics by
the relevant agencies. The application of such technologies would enable our farmers
to have better quality yield rather than depending upon the conventional method of
seed cultivation which is no longer competitive. In terms of farm inputs, some form of
regulatory measures need to be adopted to ensure that price and application of fertilizers
and chemicals are within acceptable level. This is to ensure that the farmers receive
satisfactory economic returns from their farms and at the same time, environmental
protection is observed at every level of farm operations. It is time the agriculture
authorities, private sector and farmers review the agriculture industry with new lenses.
Otherwise, the achievement of competitive food crops production in Malaysia remains
a constant challenge!
65
References:
Malaysia Agriculture Directory and Index 2001/2002, Agriquest Sdn. Bhd.
Panduan Perlaksanaan Kontrak Pemasaran Sayur-sayuran tahun 2002-2005, FAMA
Porter, M.E. (1990), The Competitive Advantage of Nations, Free Press, New York.
M.S.Swaminathan, "Enhancing Our Agricultural Competitiveness." Current Science,
Vol. 85,No7,10 October 2003
Waves, Amber (2002), "Dynamics of Agricultural Competitiveness: Policy Lessons
from Abroad." US Department of Agriculture.
Business Development Center, Ministry of Agriculture. Data dated 14 March 2003
available from http://www.agribdc.com/index. php?ch=85&pg=4S4&ac=1873
66
CI.T.R.A.© TEMPLATING' SEBAGAI STRATEGI PELAKSANAAN
MS ISO 9000:
SATU KAJIAN DALAM PERKHIDMATAN AWAM MALAYSIA
Oleh
Associate Professor Dr. Zainal Ariffin Ahmad
School of Management
Universiti Sains Malaysia
Dr. Yuserrie Zainuddin
School of Management
Universiti Sains Malaysia
Tarn Wei Keong
INTI International College, Pulau Pinang
Dr Zuraidah Mohd Zain
Kolej Universiti Kejuruteraan Utara Malaysia
Siti Rahmah Ahmad
SIRIM QAS Bhd
Abstrak
Artikel ini melaporkan hasil penyelidikan kebangsaan untuk mengenalpasti manfaat, masalah
dan strategi yang boleh membantu pelaksanaan MS ISO 9000 dalam Perkhidmatan Awam
Malaysia. Kaedah tinjauan soalselidik telah digunakan untuk mengumpul data tentang
demografi serta skop, status, tarikh dan jejaktempa pelaksanaan MS ISO 9000 mengikut
garispanduan MAMPU bagi Lapan Langkah Pelaksanaan ISO 9000. Daripada 54 agensi yang
telah menerima persijilan MS ISO 9000, 7 agensi kerajaan (13.7%) telah menerimanya pada
tahun 1997 manakala 6 (11.8%) dalam tahun 1998, 27 (52.9%) dalam tahun 1999 dan 11
(21.6%) sehingga Ogos 2000. Bagi 43 agensi yang telah memberikan jejak tempa mereka,
tempoh mendapatkan persijilan adalah antara 7 bulan hingga 42 bulan dengan purata 25.33
bulan berbanding dengan tempoh persijilan 18 bulan dalam sektor swasta (Aziz et al.,1998).
Antara masalah utama yang dihadapi oleh agensi kerajaan dalam melaksanakan MS ISO 9000
adalah kerja terlalu banyak, kekurangan masa, dan latihan yang tidak mencukupi, maka
dicadangkan bahawa 'templating'menggunakan Model CI.T.R.A.® boleh memudahcarakan
pelaksanaan MS ISO 9000 bagi agensi kerajaan yang sama dari segi struktur, fungsi, proses
utama mereka.
Pasukan penyelidik merakamkan setinggi penghargaan kepada M.O.S.T.E. yang
membiayai penyelidikan ini melalui geran Intensification Research Priority Areas.
CI.T.R.A. ©'Templating' sebagai Strategi Pelaksanaan MS ISO 9000:
67
Latar Belakang
Pada 11 Julai 1996, Pelaksanaan ISO 9000 Dalam Perkhidmatan Awam telah dilancarkan
oleh Ketua Setiausaha Negara melalui Pekeliling Kemajuan Pentadbiran Awam (PKPA)
Bilangan 2 Tahun 1996. Pelancaran pekeliling ini merupakan satu penanda baru yang
membawa satu perubahan baru dalam usaha kerajaan Malaysia yang beriltizam
menubuhkan satu kerajaan yang pertama melaksanakan MS ISO 9000 (Musalmiah,
1998). Pelaksanaan MS ISO 9000 merupakan satu langkah yang mendorongkan agensi
kerajaan ke arah peningkatan dalam pengurusan yang lebih berkesan dan berkeupayaan
yang bertujuan untuk meningkatkan kepuasan pelanggan. MAMPU pula
dipertanggungjawabkan untuk menjadi badan latihan dan persijilan MS ISO 9000 bagi
semua agensi kerajaan. Menurut PKPA Bilangan 2 Tahun 1996 tersebut, semua agensi
kerajaan berkeupayaan untuk mencapai persijilan MS ISO 9000 dalam jangkamasa
yang disasarkan sehingga bulan Ogos 2000. Walau bagaimanapun, sehingga Disember
2000, hanya 104 agensi kerajaan daripada 781 agensi kerajaan berjaya mencapai
persijilan manakala 677 agensi kerajaan lain masih bersusah payah dan bertungkus
rumus menuju ke arah persijilan. Persoalan yang timbul adalah mengapa terdapat
perbezaan dari segi pencapaian persijilan dalam kelompok agensi kerajaan yang
homogeneous dari segi faktor kewangan dan faktor persekitaran. Maka, kajian ini
berfokus kepada pengenalpastian manfaat, masalah dan strategi yang boleh membantu
dalam pelaksanaan MS ISO 9000 dalam Perkhidmatan Awam. ]
Pelaksanaan Pengurusan Kualiti dalam Perkhidmatan Awam di Malaysia
Sejak penubuhan Unit Perkembangan Pentadbiran (DAU- Development Administration
Unit) pada 1968, kerajaan Malaysia telah berusaha untuk mempertingkatkan
keberkesanan pengurusan dalam perkhidmatan awam. Pelbagai program telah
diperkenalkan untuk meningkatkan kualiti dalam perkhidmatan awam, antaranya
termasuk Manual Prosedur Kerja (MPK) dan Fail Meja (FM), Peningkatan Kualiti
Perkhidmatan Kaunter, Kumpulan Meningkat Mutu Kerja (KMK), Sistem Perakaunan
Mikro (SPM), Pengurusan Kualiti Menyeluruh (TQM) dan Piagam Pelanggan {Pekeliling
Kemajuan Pentadbiran Awam Bil 2/1996). Selain daripada itu, idea dan amalan kualiti
dari korporat dan syarikat multinasional juga dipindahkan ke sektor perkhidmatan
awam. Program yang telah diperkenalkan ini telah berjaya meningkatkan keupayaan
agensi kerajaan dalam memberi perkhidmatan yang berkualiti kepada pelanggannya.
Pelaksanaan program ini juga telah menyediakan asas bagi pembentukan satu sistem
pengurusan kualiti dalam perkhidmatan awam.
Demi merealisasikan pengurusan kualiti dan peningkatan prestasi perkhidmatan,
SIRIM telah menghasilkan satu model yang dipanggil SIRIMEX untuk membantu agensi
kerajaan dan industri kecil dan sederhana (SMI) ke arah pengurusan kualiti dan
peningkatan prestasi (Ho & Idris, 1997).
68
5S
Pengurusan Operas!
MPP
QCC
Pengurusan Kualiti
ISO
TPM
1
TQM
5-S
Mr>pc
QCC
ISO
TpM
l^M
= Organisasi, kemas, bersih, piawai, disiplin
(Seiri, Seiton, Seiso, Seiketsu, Shitsuke)
= Pemasaran, Produktiviti, Pembelian, Pengawalan
(Marketing, Production, Purchasing, Control)
=
Lingkungan Kawalan Kualiti
(Quality Control Circles)
= Siri ISO 9000 (ISO 9000 Series)
= Pengurusan Produktiviti Menyeluruh
(Total Productive Management)
= Pengurusan Kualiti Menyeluruh
(Total Quality Management)
(Sumber : Buletin Kualiti & Standard, 5(1), 1997)
Rajah 1 Model SIRIMEX
Menurut model SIRIMEX, pengurusan produktiviti diutamakan dahulu u n t u k
memastikan aktiviti harian sesebuah organisasi mematuhi prinsip dan konsep
produktiviti dan selalu dalam landasan yang betul. Kemudian penambahbaikan akan
dijalankan dan konsep serta prinsip kualiti akan disalurkan dalam aktiviti harian
organisasi. Jadi jelaslah bahawa langkah dan usaha yang diambil oleh kerajaan pada
peringkat awal adalah lebih cenderung kepada pengurusan produktiviti dan bukan
pengurusan kualiti.
Menurut Bouckaert (1995), kajian pengurusan kualiti dalam perkhidmatan awam dapat
difokuskan kepada tiga kategori iaitu pengurusan kualiti mikro, pengurusan kualiti
meso dan pengurusan kualiti makro. Pengurusan kualiti mikro merupakan satu konsep
kualiti dalaman organisasi yang bertujuan untuk meningkatkan prestasi organisasi.
Sedangkan pengurusan kualiti meso merupakan satu konsep kualiti luaran organisasi
yang berfokus kepada kepuasan pelanggan/ pengguna terhadap perkhidmatan yang
diterimanya. Manakala pengurusan kualiti makro merupakan satu konsep sistem
generik yang berfokuskan kepada penambahbaikan kehidupan rakyat dalam
masyarakat dengan pemerintah.
69
Setelah Pekeliling Kemajuan Pentadbiran Awam (PKPA) Bilangan 2 Tahun 1996 - Garis
Panduan Bagi Melaksanakan ISO 9000 Dalam Perkhidmatan Awam dilancarkan oleh
Ketua Setiausaha Negara pada 11 Julai 1996, kerajaan Malaysia secara rasminya
melangkah ke era pengurusan kualiti sebagai kerajaan yang pertama melaksanakan
MS ISO 9000. Pelaksanaan ISO 9000 dalam perkhidmatan awam bukan sahaja dapat
mempertingkatkan pengurusan kualiti dan memantapkan sistem kualiti yang sedia
ada dalam agensi kerajaan, ia juga sebagai satu petunjuk ajar kepada industri kecil
dan sederhana bahawa kepentingan kewujudan satu sistem kualiti yang berdokumen.
Menurut Aziz et al. (1998), industri di Malaysia kurang melaksanakan aktiviti
pengurusan kualiti jika berbanding dengan industri di United Kingdom. Ini adalah
kerana sikap SMI adalah lebih cenderung kepada "wait and see" (Idris, McEwan, &
Belavendram, 1996) dan takut menghadapi kegagalan (Kanji, Abdul Malek, Tambi, &
Wallace, 1999). Selain daripada masalah sikap, kekurangan sokongan, sumber dan
pakar juga menyebabkan SMI di Malaysia jarang mengamalkan pengurusan kualiti
(Aziz et al., 1998; Kanji et al., 1999). Tambahan pula isu kualiti seperti Faktor Kejayaan
Kritikal (FKK), masalah pelaksanaan jarang dibincang, dihuraikan dan dipertikaikan
secara ilmiah dalam negara kita (Zuraidah & Zainal, 2001). Jadi adalah wajar tindakan
kerajaan melaksanakan ISO 9000 dan menunjukkan teladan kepada sektor perindustrian
kecil dan sederhana.
Muhamad Rais Abdul Karim (1997) menyatakan rasional pelaksanaan ISO 9000 bagi
perkhidmatan awam merupakan satu usaha kerajaan untuk meningkatkan
keberkesanan dan kecekapan agensi kerajaan dalam membekalkan produk atau
perkhidmatan yang boleh memenuhi kehendak pelanggan. Pelaksanaan ISO 9000 akan
membuka peluang kepada agensi kerajaan untuk menambahbaikan kualiti produk dan
perkhidmatan serta memperkemaskan pengurusuan organisasi. Selain itu, pelaksanaan
ISO 9000 akan dapat memastikan produk atau perkhidmatan yang dihasilkan oleh
agensi-agensi kerajaan adalah konsisten tahap kualitinya. Ini adalah kerana ISO 9000
boleh membantu agensi-agensi kerajaan mewujudkan sistem kualiti yang cekap.
Metodologi
Kajian ini merupakan suatu kajian eksploratori dan fenomena yang dikaji adalah
kontemporari (pelaksanaan MS ISO 9000). Penyelidik telah memilih untuk
menggunakan kaedah penyelidikan lapangan (field study) secara tinjauan soalselidik
kerana populasi agensi kerajaan yang hendak dikaji tersebar luas di merata Malaysia.
Populasi
Populasi kajian ini terdiri daripada agensi kerajaan yang berdaftar di dalam senarai
MAMPU yang bersetuju untuk melaksanakan MS ISO 9000. Sejumlah 781 agensi
kerajaan telah berdaftar dengan MAMPU dan mereka terdiri daripada 24 Kementerian,
114 Jabatan-Jabatan Persekutuan, 52 Badan-badan Berkanun Persekutuan, 13 Setiausaha
Kerajaan Negeri, 128 Pejabat Tanah dan Daerah, 145 Pihak Berkuasa Tempatan, 9
Pejabat Residen (Sarawak), 239 Jabatan Negeri dan 57 Badan Berkanun Peringkat
Negeri.
70
Senarai agensi kerajaan yang berkaitan dengan populasi kajian telah diperolehi dari
Unit Pemodenan Tadbiran Malaysia (MAMPU), Jabatan Perdana Menteri. Oleh kerana
populasinya terlalu kecil, penyelidik telah membuat keputusan untuk menyelidik
keseluruhan populasi dan bukan persampelan. Walau bagaimanapun, hanya 527
daripada 781 agensi kerajaan yang berdaftar dengan MAMPU telah dihantar soalselidik
kerana kepada agensi terlibat manakala 254 agensi kerajaan yang lain tidak dapat
dihantar kerana ketiadaan alamat surat menyurat berdasarkan Buku Bemrusan dengan
Perkhidmatan Awam Malaysia (1993) serta sumber lain seperti direktori Jabatan Kerajaan
dan Setiausaha Kerajaan Negeri Pulau Pinang.
Soalselidik
Satu soalselidik telah digunakan unhik mengumpul data tentang dernografi serta skop,
status, tarikh dan jejaktempa pelaksanaan MS ISO 9000. Berdasarkan literatur,
responden telah ditanya tentang manfaat dan masalah yang telah dihadapi semasa
mengikuti garispanduan MAMPU bagi Lapan Langkah Pelaksanaan ISO 9000.
Responden yang terdiri daripada pengurus kualiti juga telah diminta untuk
memberikan jejaktempa pelaksanaan MS ISO 9000 mengikut 8 langkah yang
dicadangkan oleh MAMPU: a) Komitmen Pengurusan Atasan, b) Mengenalpasti Proses
Utarna, c) Latihan Pasukan Pelaksanaan, d) Analisis Gap, e) Dokumentasi ISO 9000, f)
Melatih Staf Mengikut Prosedur, g) Implementasi MS ISO 9000 dan h) Persijilan.
Penyelidik telah menetapkan tempoh pelaksanaan bermula dari bulan pertama (Julai
1996) hingga bulan ke 50 (Ogos 2000).
Keputusan
Profil Responden
Seperti tertera dalam Jadual 1, sebanyak 169 agensi kerajaan telah mengembalikan
soalselidik di mana 42% daripadanya adalah agensi kerajaan Persekutuan dan 58%
adalah agensi kerajaan Negeri. Antara agensi kerajaan Persekutuan yang telah
menerima pensijilan dalam tempoh penyelidikan termasuk 1 Kementerian, 14 Badan
Berkanun Persekutuan, 16 Jabatan Persekutuan manakala agensi kerajaan Negeri terdiri
daripada 6 Pihak Berkuasa Tempatan, 11 Jabatan Negeri, dan 6 Badan Berkanun Negeri.
Bagi tujuan kajian ini, penyelidik hanya fokus kepada 54 agensi kerajaan (32%) yang
telah menerima persijilan MS ISO 9000 dalam tempoh yang ditetapkan oleh MAMPU
sehingga Ogos 2000. Mengikut keutamaan, tiga tujuan utama melaksanakan MS ISO
9000 adalah untuk meningkatkan kualiti perkhidmatan, menambahbaik sistem
pemprosesan organisasi, dan arahan dari kerajaan. Untuk tujuan analisis, penyelidik
hanya mengambil kira jumlah responden yang member! jawapan sahaja dalam mengira
peratusan.
71
Jadual 1
Profit Responden Mengikut Status Persijilan
———————————————————————
Status Persijilan
Frekuensi
I'erkara
Responden
%
Sudah
71
98
169
42.0
58.0
1 00.0
31
23
54
8
31
32
4.7
IX.3
19.0
1
14
16
33
17
38
4
6
19.5
10.0
22.5
2.4
3.6
100.0
6
0
11
0
6
Jenis organisasi
Kerajaan Persekuluan
Kerajaan Ncgcri
Jumlah
%
BeJum
%
32.0
40
15
115
68.0
Jenis Agensi
(Kerajaan Persekutuan)
Kementerian
BadanBerkanun
Pcrsckutuan
Jabatan Persekuluan
(Kerajaan Negeri)
Pihak Berkuasa Tempalan
Pejabat Tanah & Daerah
Jabatan Negeri
Setia Usaha Kerajaan
Badan Berkanun Negeri
169
7
17
16
27
17
27
4
0
Jumlah
Manfaat dan Masalah Felaksanaan
Responden telah mengenalpasti beberapa manfaat utama melaksanakan sistem kualiti
MS ISO 9000 seperti tertera dalam Jadual 2. Antaranya adalah untuk meningkatkan
produktiviti dan mengurangkan kesilapan, variasi pemprosesan, kerja semula, aduan
pelanggan dan kos pengurusan. Daripada Jadual 3 pula, antara lima masalah utama
(mengikut keutamaan) adalah: 1) Kerja terlalu banyak, 2) Kekurangan masa, 3) Latihan
tidak mencukupi, 4) Tiada peruntukan khas, dan 5) Tidak mendapat sokongan dari
staf. Kelima-lima masalah ini menjurus kepada kcsediaan pelaksana, sokongan staf
dan kecukupan sumber (manusia, masa, dana) yang boleh menjadi penghalang kepada
usaha pelaksanaan MS ISO 9000.
Jadual 2
Manfaat Utama Pelaksanaan MS ISO 9000
N
Mean
Rank
Meningkatkan produktiviti
153
Mengurangkan kesilapan
149
2.41
2.44
1
2
Mengurangkan variasi pemprosesan
137
3.11
3
Mengurangkan kerja semula (rework)
139
Mengurangkan aduan pelanggan
143
4
5
Mengurangkan kos pengurusan
127
3.15
3.93
4.73
72
6
Jadual 3
Masalah Utama Pelaksanaan MS ISO 9000
N
Mean
Rank
Kerja terlalu banyak
144
2.66
1
Kekurangan masa
134
2.96
2
Latihan tidak mcncukupi
127
3.60
3
Tiada peruntukan khas
102
4.52
4
Tidak mcndapat sokongan dari staf
Kebaikan tidak dapat diukur
95
5.36
5
83
6.20
6
Kos pelaksanaan terlalu tinggi
87
6.30
7
Pcngurusan tinggi lidak memahami ISO 9000
83
6.36
8
Bersaing unluk mendapatkan sumher
79
6.47
9
Faedah yang dipcrolchi tidak bcrbaloi dengan usaha
81
6.80
10
Tidak mendapat sokongan pengurusan atasan
78
7.51
11
Persamaan Skop, Fungsi, Proses Utama dan Prosedur Agensi Kerajaan
Responden juga ditanya sama ada mereka merasakan skop, fungsi, proses utama dan
prosedur sama seperti agensi kerajaan lain. Jadual 4 menunjukkan kebanyakan agensi
kerajaan merasakan bahawa struktur (61 %), fungsi (58 %), proses utama (49 %) dan
prosedur (47 %) mereka adalah sama dengan agensi lain yang sama seperti mereka.
Majoriti 59 % juga merasakan dokumentasi prosedur yang mendapat pensijilan dapat
diaplikasikan di organisasi lain.
Jadual 4
Persamaan Skop, Fungsi, Proses Utama, Prosedur Agensi Kerajaan
Ya
Organisasi yang mempunyai persamaan
dengan organisasi lain dari segi
Tidak
Frekuensi
%
Frekuensi
%
N
Struktur
94
60.6
61
39.4
155
Fungsi
89
58.2
64
41.8
153
Proses Utama
75
49.0
78
51.0
153
Prosedur
71
47.0
80
53.0
151
Dokumentasi prosedur yang mendapat
persijilan dapat diaplikasi di organisasi lain
93
58.9
65
41.1
158
73
Jejak Tempa Pelaksanaan
Jadual 5 menunjukkan jejak ternpa agensi kerajaan yang telah menerima persijilan
pelaksanaan MS ISO 9000. Dari Julai 1996 (bulan pertama) hingga Ogos 2000 (bulan ke
50), 43 daripada 54 agensi kerajaan yang telah mendapat persijilan MS ISO 9000
mengambil masa antara 7 bulan hingga 42 bulan dengan purata tempoh persijilan
adalah 25.33 bulan dengan sama banyak (50%) mendapat persijilan sebelum dan selepas
25 bulan. Ini berbeza dengan tempoh persijilan 18 bulan dalam sektor swasta (Aziz et
al.,1998), Terdapat 11 agensi yang tidak menyatakan langkah mengikut MAMPU kerana
mereka telah mendapat pensijilan dari SIRIM atau UKAS, maka 8 langkah tersebut
tidak relevan.
Bagi 43 agensi yang telah memberikan jejaktempa, 7 agensi kerajaan (13.7%) telah
menerima pensijilan pada tahun 1997 manakala 9 (11.8%) pada tahun 1998, 27 (52.9%)
pada tahun 1999 dan 11 (21.6%) pada tahun 2000. Majoriti (41%) agensi tersebut
mempunyai skop persijilan MS ISO 9000 untuk proses utama manakala 23% untuk
skop jabatan atau unit dan 36% adalah untuk seluruh organisasi. Hanya 10 (23.8%)
agensi kerajaan telah mengambil masa kurang dari 18 bulan, majoriti 28 (64.2%)
mengambil masa antara 18 hingga 36 bulan dan bakinya (12%) mengambil masa lebih
dari 36 bulan. Majoriti 21 (43.1%) agensi tersebut mempunyai skop persijilan MS ISO
9000 untuk proses utama manakala (10) 21.6% untuk skop jabatan atau unit dan (12)
33.3% adalah untuk seluruh organisasi.
Perbincangan
Tempoh pelaksanaan MS ISO 9000 dalam perkhidmatan awam Malaysia tidak dapat
dibandingkan dengan perkhidmatan awam di luar negera kerana negara kita
merupakan negara pertama yang kerajaannya berpandukan sistem kualiti, MS ISO
9000 (Musalmiah, 1998) dan adalah unik antara negara lain (Hazman Shah Abdullah,
2000). Tambahan pula, pelaksanaan sistem ISO 9000 dalam sektor awam masih berada
dalam tahap eksperimen (Donnelly, 1999).
Jika dibandingkan dengan pelaksanaan MS ISO 9000 dalam sektor perindustrian dan
swasta yang mengambil masa lebih kurang 18 bulan (Aziz et al., 1998; Idris et al.,1996),
tempoh pelaksanaan MS ISO 9000 dalam agensi kerajaan memang adalah lebih panjang.
la mungkin disebabkan kekurangan pakar perunding {Aziz et al., 1998), kekurangan
sumber seperti buku teks dan buku rujukan dalam Bahasa Malaysia dan mengakibatkan
jawatankuasa kumpulan pelaksanaan MS ISO 9000 perlu mengambil masa untuk
menterjemahkan bahan bacaan kepada Bahasa Malaysia (Hamzah & Ho, 1994).
Tambahan pula, pengurusan atasan yang tidak mempunyai komitmen yang tinggi
dan bersikap "wait and see" juga merupakan salah satu unsur memperlahankan
pelaksanaan sistem kualiti (Idris et al.,1996). Manakala bagi golongan staf biasa yang
kekurangan pengetahunan dan kemahiran untuk memahami arahan dan prosedur yang
diberikan dalam sistem kualiti (Hamzah & Ho, 1994) dan anggapan mereka bahawa
penyediaan dokumen dan prosedur terlalu memakan masa dan birokratik (Davison &
Grieves, 1996) mungkin akan menjejaskan pelaksanaan MS ISO 9000.
74
Jadual 5
Jejak Tempa Agensi Kerajaan yang Sudah Menerima Persijilan
8 Langkan Pelaksanaan
Buian
MAMPU (7/1996 - 8/2000)
Agensi
Tiirikh
Kerajaan
persijilan
Pihak Berkuasa Tempatan Pasir
27/2/97
-10 -10 -11
Bahagian Peperiksaan UiTM*
21/4/97
-20 -19 -11
1997
Jabatan Kimia Malaysia
15/9/97
1
4
4
7
7
1998
Hospital Tengku Ampuan
Rahimah, Klang
07/05/98
3
9
9
11
9
1998
Pcrpustakaan Sultanah
Zanariah UTM
30/5/98
5
12
12
12
1998
LcmbagaPelabuhan Kuching
17/7/98
15
16
17
1998
Majlis Pembangunan Sumber
Manusia (HRDF)
28/8/98
13
14
15
1998
Jabatan Pengairan & Saliran
Perak Tengah
17/11/98
9
11
11
1998
Dewan Bandaraya Kucing Utara
10/12/98
3
3
3
1999
Lembaga Lebuhraya Malaysia
29/1/99
10
11
11
1999
Instilut Aminuddin Baki
2/99
1
2
3
1999
Jabatan Perancangan Bandar &
Desa, Pahang
8/2/99
1
7
8
1999
Jabatan Kewangan Ncgeri Pcrak
9/2/99
15
16
17
1999
Jabatan Kerja Raya Perak
22/3/99
1
3
1999
Sabah Energy Corp SB
18/05/99
14
1999
Lembaga Air Sibil
4/6/99
1999
Sek Men Tanah Merah.
Tahun
1997
1
2
3
4
Tempoh Skop
( 8 - 1 ) persijilan
5
6
7
8
6
-3
1
8
18
Organisasi
-5
1
4
10
30
Proses
10
10
15
14
Organisasi
13
15
23
20
Jabatan
14
15
15
22
17
Organisasi
17
17
21
21
25
10
Proses
16
16
21
26
13
Organisasi
Gudang*
1997
-7
21
24
24
28
19
Jabatan
3
9
9
11
30
27
Organisasi
12
13
13
18
30
20
Jabatan
4
5
13
20
32
31
Proses
12
13 24
24
32
31
Proses
22
22
26
27
32
17
Proses
2
3
4
14
15
34
33
Organisasi
20
11
24
14
14
35 35
21
Proses
24
24
27
31
31
35
13
Organisasi
18
23
39
24
Proses
22
24
21/06/99
15
15
15
15
IK
Kelantan
1999
Majlis Bandaraya Johor Bahru
22/06/99
13
19
17
20
20
23
31
36
23
Organisasi
1999
Lembaga Pertubuhan Pcladang
22/6/99
5
10
II
12
12
19
23
36
31
Proses
1999
Lembaga Perlesenan Tenaga
Atom
22/6/99
4
5
4
6
18
15
19
36
32
Proses
1999
MARA
22/6/99
11
12
12
13
14
20
23
36
25
Jabatan
1999
SckKcb Sen Indra, Perils
25/06/99
1
1
2
2
2
3
3
36
35
Organisasi
1999
Lembaga Peri nd us tri an Nanas
Malaysia
27/7/99
1
14
21
22
23
24
26
37
36
Jabatan
1999
Uda Holdings Bhd
5/8/99
12
13
14
12
32
18 38
26
Organisasi
1999
Pejabat Pendattar Pcrniagaan
9/8/99
6
8
8
16
28
30 38
32
Proses
1999
Majlis Perbandaran Shah Alam
22/09/99
13
28
30
30
30
35
39
26
Proses
1999
KWSPMelaka
23/10/99
2
7
11
13
21
23
40
38
Jabatan
75
10
12
Jadual 5
Jejak Tetnpa Agensi Kerajaan yang Sudah Menerima Persijilan(...sambungan)
1999
Jabatan Pembangunan Koperasi
29/10/99
3
37
Jabatan
1999
Pahang
10/11/99
43 45 46 47 48 49 50
50
7
Jabatan
1999
Jabatan Perancangan Bandar &
15/12/99
20 22 22 22 22 29 37 42
22
Proses
4
6
14
14 28 34 40
Desa, Perak
1999
Hospital Kuala Pilah
31/12/99
9
11
1999
Majlis Daerah Segamat Selatan
31/12/99
20
20
2000
Jabatan Perhilitan
24/2/2000
7
13
12
2000
Kementerian Sains, Teknologi & 24/2/2000 12
Alam Sekitar
14
2000
Jabatan Pertanian (Bhgn Pad!)
24/2/2000
21
2000
MARDI
15/3/2000
2000
Lembaga Pelabuhan Sabah
2000
2000
42
33
Organisasi
22
34
34 42
22
Proses
17
19
31
35 44
37
Jabatan
13
14
15
29
35 35
23
Proses
12
13
21 21 25 44
42
Proses
16
18 23 43
35
Proses
22/3/2000 34 34 35 34 35
36 39
45
11
Proses
Jabatan Perkhidmatan Haiwan
29/3/2000 28 29 30 30
3
33 37
45
17
Jabatan
Perbadanan Pembangunan
28/4/2000 13
18 16 22 27
36 39
46
33
Organisasi
33 34
2
8
12
13 14
14
15 20 39
20
Ekonomi Sabah
2000
Jabatan Penyiaran
3/5/2000
2000
MIDA
12/5/2000 15 25 29 31
2000
Lembaga Akreditasi Negara
9/6/2000
2000
Jabatan Perkhidmatan Kajicuaca 9/6/2000
Malaysia
1997
TIADA JEJAK TEMPA
1997
Lembaga Pelabuhan Miri
21/1/97
NA
1997
Sek Men Keb Derma, Perlis
21/7/97
NA
1997
Jabatan Kimia Malaysia Kuala
15/9/97
NA
36
34 38 38 39 47
33 42 42 47
11
Proses
32
Proses
23 25 24 25 25 37 37
46
23
Proses
24 25 36 37
46
42
Proses
4
4
7
Organisasi
SIRIM
Organisasi
Organisasi
Terengganu
1997
Jabatan Kimia Malaysia Pulau
Pinang
15/9/97
NA
SIRIM
Organisasi
1998
Perbadanan Produktiviti
30/5/98
NA
SIRIM
Organisasi
NA
Negara
1988
Jabatan Kimia Malaysia
Bintulu
14/9/98
1998
Bank Negara Malaysia
16/11/98 NA
1999 Jabatan Kimia Malaysia Sabah
1999
Jabatan Pertanian Negeri Perlis
1999
Johor
1999
Majlis Perbandaran Seberang
Prai
Organisasi
Unit
3/99
NA
1/10/99
NA
Tiada data
11/99
NA
Unit/
Proses
17/12/99 NA
Proses
SIRIM
Organisasi
Nota: Nombor dalam kolum pelaksanaan 1 hingga 8 merujuk kepada tempoh persijilan dari MAMPU
bermula dari bulan pertama no 1 (Julai 1996) hingga bulan ke 50 (Ogos 2000).
Sejumlah 11 agensi tidak memberikan jejak tempa, hanya tarikh pensijilan.
76
* 2 agensi tersebut telah mula proses persijilan scmenjak 1994/95 dan mendapat persijilan
awal 1997. Untuk tujuan kajian, jejaktempa mereka diseragamkan mengikut jadual 1 - 8
dan jumlah bulan sebelum Julai 1996 diberikan nilai negatif
Bulan/ Tahim
1994
1995
1996
1997
1998
1999
2000
J
F
M
A
M
J
J
O
-11
-
-
-
-
-
-
-
-18
-6
7
19
31
-17
-5
8
20
-16
-4
9
-15
-3
10
22
-14
-13
-1
12
-12
1
43
32
44
21
33
45
34
46
-2
11
23
35
47
24
36
48
2
14
13
25
26
37
49
38
50
O
N
D
-
-
-10
3
15
27
-9
4
-20
-8
5
17
29
41
-19
-7
S
39
16
28
40
6
18
30
42
Implikasi
Hasil kajian ini memberikan beberapa implikasi kepada amalan kualiti dalam
perkhidmatan awam. Daripada profil agensi kerajaan yang telah berjaya mencapai
persijilan MS ISO 9000, adalah didapati bahawa suatu 'template' proses pelaksanaan
MS ISO 9000 boleh dibangunkan bagi agensi lain yang mempunyai struktur, fungsi,
proses utama dan prosedur yang sama dengan mereka. Pembentukan dan penggunaan
'template' pelaksanaan persijilan bagi agensi kerajaan. Sebagai contoh, Jabatan
Pembangunan Koperasi yang telah menerima persijilan MS ISO 9000 bagi skop jabatan
pada tahun 1999 telah berjaya melaksanakan persijilan MS ISO 9000 ke seluruh Jabatan
Pembangunan Koperasi di seluruh negara. Baru-baru ini Jabatan Imigresen juga telah
berjaya mencapai MS ISO 9000 di merata cawangannya.
'Templating' boleh digunakan memudahcara pelaksanaan MS ISO 9000 ke seluruh
agensi kerajaan yang tertentu dan juga bagi agensi yang mempunyai struktur, fungsi,
proses utama dan prosedur yang sama, contohnya semua hospital kerajaan, sekolah
atau universiti. Namun demikian, semasa kajian ini dijalankan, adalah didapati agensi
kerajaan tidak berapa berminat untuk berkongsi maklumat sesama mereka tambahan
pula 'template'. Semangat berlumba mencapai persijilan sebelum Ogos 2000 mungkin
telah mengurangkan minat agensi kerajaan untuk bekerjasama. Templating boleh
membantu membantu agensi kerajaan dan industri kecil dan sederhana (SMI) ke arah
pengurusan kualiti dan peningkatan prestasi sejajar dengan model SIR1MEX.
C.I.T.R.A.© - Template Pelaksanaan MS ISO 9000
Bagi pelaksanaan MS ISO 9000 di perkhidmatan awam, penyelidik ingin
memperkenalkan Model CI.T.R. A.© yang telah mula dibangunkan melalui Biro Kualiti
Universiti Sains Malaysia pada tahun 1999. CI.T.R.A.© merupakan platform
pembudayaan kualiti di USM yang digunakan bagi pengajaran dan pembelajaran,
penyelidikan dan pembangunan, dan pentadbiran dan perkhidmatan. Penggunaan
77
template yang standard telah digunakan pertama kali sempena Bulan Kualiti 1999 di
mana USM ingin memperkenalkan pengajaran menggunakan multimedia dalam kuliah.
CI.T.R.A.© bermaksud "Continuous Improvement, Template, Replicate and
Acculturate" merupakan suatu proses pembudayaan kualiti. Model CI.T.R.A.©, sama
seperti makna perkataan "citra" (Kamus Dewan, 2000) memberi gambaran pelaksanaan
pembudayaan sesuatu initiatif pengurusan kualiti dengan menjawab persoalan berikut:
CI.T.R.A.®
Persoalan
Continuous
Apa
Apakah initiatif kualiti yang ingin dibudayakan?
Improvement
Kenapa
Kenapakah hendak dibudayakan?
Template
Bagaimana
Siapa
Bagaimanakah memudahcara pembudayaan?
Siapakah stakeholder pembudayaan ini?
Replicate
Di Mana
Di manakah akan dibudayakan?
Acculturate
Bila
Bilakah sasaran pembudayaan?
Seperti yang disarankan oleh Model SIRIMEX dalam perbincangan awal, initiatif
pengurusan kualiti termasuk 5-S, MPPC, QCC, ISO, TPM dan TQM. Dalam konteks
USM pada tahun 1999, langkah pertama Continuous Improvement adalah
mengenalpasti penambahbaikan kualiti yang ingin dibudayakan, iaitu Inovasi
pengajaran secara multimedia dalam kuliah. Langkah kedua ialah memudahcarakan
inovasi ini melalui pembangunan template pelaksanaan. Ini telah dilakukan dengan
mengenalpasti inovator atau pensyarah yang sudah mengamalkan pengajaran secara
multimedia dan berkongsi dengan rakan-rakan lain melalui pembentangan semasa
Konvensyen Bulan Kualiti 1999. Template prosedur yang dibangunkan merangkumi
prosedur, keperluan untuk pelaksanaan {frasarana, sofwer, peralatan) dan manfaat
(bagaimana multimedia membantu pengajaran). Pembentangan juga dihadiri oleh
dekan dan ketua jabatan selaku stakeholder utama sesebuah pusat pengajian dan
mereka kemudiannya berbincang tentang feasibiliti sesuatu pengajaran multimedia
tersebut (powerpoint, pengajaran web-based, internet dsb). Setelah dipersetujui,
langkah ketiga adalah Replicate iaitu untuk memudahkan pelaksanaan kaedah
pengajaran multimedia ini dalam kalangan pensyarah di semua pusat pengajian. Ini
dilaksanakan dengan mengadakan pakarujuk yang terdiri daripada inovator dan juga
penyediaan latihan kepada mereka yang berminat. Langkah keempat adalah
pembudayaan atau Acculturate di mana kaedah pengajaran multimedia menjadi salah
satu repertoire pengajaran setiap pensyarah.
78
Penerangan
Contoh Aplikasi Di USM
Improvement
(Apa)
(Kenapa)
Initialif pembudayaan kualiti Tujuan
initiatif tcrsebut
Inovasi - Pengajaran guna
multimedia dalam kuliah
Template
Pembentukan template pelaksanaan
CI.T.R.A.©
Continuous
(Bagaimana)
Template
Faedah
Keperluan
Template: Tcinplale mungkin dalam
bentuk proses, prosedur, dokumcn,
Inovalor sediakan template
langkah/prosedur
manual kualiti.
Faedah: manfaat daripada
pelaksanaan tersebut
Bentang di Konvensyen Bulan
Kualili 1999 untuk mendapat
Keperluan: apa yang perlu dilakukan
untuk rnelaksanakannya sama ada
pcrsctujuan semua pusat
pcngajian
bahan, latihan, kcpakaran
(Siapa)
Slakcholdcr
Stakeholder: Ketua jabatan atau
pengurus atasan
Replicate
(Di mana)
Acculturate
(Bila)
Semua dekan bincang
feasibiliti dan stralegi
Pelaksanaan template di seluruh
organisasi
Pengajaran multimedia
dilaksanakan di semua
pusat pengajian
Pembudayaan initiatif kualiti ke
seluruh organisasi
2000- pengajaran multimedia
menjadi salu kaedah
pengajaran di USM
Rajah 2 Model CI.T.R.A.©
Dalam konteks agensi kerajaan, satu contoh ialah pelaksanaan MS ISO 9000 di semua
Jabatan Pembangunan Koperasi (JFK). Maklumat berikut dipetik daripada halaman
web JPK (http://www.jpk.gov.my/pelaksanaan.html) Setelah mengenalpasti skop
pelaksanaan MS ISO 9000 keseluruh jabatan (Continuous Improvement), langkah
seterusnya adalah membangunkan dokumentasi (Template) yang telah diaudit dan
menerima persijilan pada 29 Oktober 1999. Replikasi (Replication) dilakukan ke semua
cawangan JPK dan pembudayaan (Acculturation) dapat dilaksanakan dalam tempoh
masa dua tahun. Ini disusuli dengan siri latihan MS ISO 9000 oleh semua cawangan
JPK.
79
CI.T.R.A.©
Contoli aplikasi di perkhidmatan awam (Jabatan Pembangunan Koperasi)
Continuims
Improvement
Persijilan MS ISO 9000 di semua Jahatan Pembangunan Koperasi
(Apa)
(Kenapa)
Tujuan:
1. Memastikan pcndaftaran koperasi dilaksanakan dalam tcmpoh 30 hari
dan pendaftaran pindaan Undang-undang kecil Koperasi dilaksanakan
dalam tempoh 45 hari
2. Memastikan akaun koperasi yang lengkap dan scmpurna akan diaudit
dalam tempoh 60 hari
3.
Memastikan pendallaran koperasi, pcndaftaran pindaan Undang-undang
Kecil Koperasi dan pengauditan akaun koperasi dilaksanakan sejajar
dengan kchcndak Akla Koperasi 1993 dan Peraturan-peraturan Koperasi
1995.
4. Berusaha kc arah meminimakan aduan pelanggan.
Template
(Bagaimana)
Template: Bangunkan template dokumcntasi MS ISO 9000 bagi jabalan (ihu
pejabat) - manual kualiti, prosedur pengurusan, proscdur Pcndaftaran Koperasi
dan Pindaan Undang-undang Kecil Koperasi, dan Proscdur Pengauditan
Koperasi.
Faedah: menycragamkan proses pendaftaran koperasi dan pengauditan dan
pendaftaran Pindaan Undang-undang Kecil Kepertuan. Latihan kepada scmua
(Siapa)
staf.
Tujuan: Untuk mendapalkan persijilan di scluruh JPK
Replicate
(Di mana)
Stakeholder: Semua pengarah ncgcri tcrlibat dilanlik sebagai Penolong Wakil
Pengurusan.
Mula pelaksanaan perintis di lima negeri - JPK Ibu Pejabat, Perak, Pulau
Pinang , Pahang dan Ncgcri Scmbilan pada 1999 dan lulus audil pengesahan
Acculturate
(Bila)
oleh MAMPU.
Semua 13 cawangan JPK menerima persijilan MS ISO 9000 pada 2002
Nota: Maklumat tentang JPK dipetik daripada halaman web JPK http://www.jpk.gov.my
Rajah 3 Aplikasi Model CI.T.R.A.© dalam Perkhidmatan Awam
Rumusan
Pelaksanaan sistem kualiti dalam agensi kerajaan memang merupakan satu amalan
baru jika dibandingkan dengan sektor perindustrian dan swasta boleh dirumuskan
secara empirik bahawa sistem kualiti, ISO 9000 memang sesuai dan boleh dilaksanakan
dalam agensi kerajaan yang mempunyai persekitaran birokratik dan pemusatan kuasa
yang tinggi (Luzon & Peris, 1998). Walau bagaimanapun, pelaksanaan MS ISO 9000
memerlukan masa yang panjang untuk menukarkan budaya organisasi ke budaya
80
kualiti asalkan mendapat komitmen dan sokongan pengurusan atasan serta penglibatan
pekerja dalani usaha ini. Lebih penting lagi adalah kesediaan agensi kerajaan untuk
bekerjasama ke arah pencapaian MS ISO 9000 dalam perkhidmatan awam, bukan untuk
organisasi, jabatan atau unit masing-masing sahaja. Model CI.T.R.A. © boleh digunakan
untuk membangunkan template dokumentasi bagi proses dan prosedur agensi kerajaan
yang sama bagi memudahcarakan pelaksanaan tersebut ke seluruh jentera
perkhidmatan awam.
Penekanan oleh pihak MAMPU tentang perkongsian bijak 'template' yang dibangunkan
oleh sesebuah agensi kerajaan untuk digunapakai dalam agensi lain yang mempunyai
proses, struktur, dan prosedur yang sama. Pengurus kualiti perlu menekankan latihan
kepada semua pekerja agensi kerajaan yang terlibat secara langsung dengan
pelaksanaan MS ISO 9000 terlibat kerana penglibatan pekerja adalah faktor kejayaan
kritikal yang paling penting. Pengiktiraf an diberikan kepada pekerja yang terlibat secara
langsung dalam pelaksanaan MS ISO 9000 di agensi masing-masing.
Rujukan
Aziz, Z. A. et al.,(1998). Use of quality practices in manufacturing industries in Malaysia.
Total Quality Management, 9(4/5), S13-17
Bouckaert, G. (1995). Remodeling quality and quantity in a management context.
In A. Halachrni & G. Bouckaert (Eds), Public Productivity through Quality and
Strategic Management. (Vol 1, 21-38). Netherlands: IOS Press.
Davison, J. & Grieves, J. (1996). Why should local government show an interest in
service quality? The TQM Magazine, 8(5), 32-38.
Donnelly, M. (1999). Making the difference: Quality strategy in the public sector.
Managing Service Quality, 9(1), 47-52.
Hamzah, A. & Ho, S. (1994). TQM training in small medium industries in Malaysia.
Training for Quality, 2(2), 27-35.
Hazman Shah Abdullah (2000). ISO 9000 and quality assurance in educational
institutions in Malaysia: Some Observations. Malaysian Management Review, June,
31-42
Ho, S.K. & Idris, M.A. (1997). The Sirim Excellence Model: "SIRIMEX".
Buletin Kualiti & Standard, 5(1), 2-10.
Huarng, F., Horng, C, & Chen, C. (1999). A Study of ISO 9000 process, Motivation
and Performance. Total Quality Management, 10(7), 1009-1016.
Idris, M.A.; McEwan, W. & Belavendram, N. (1996). The adoption of ISO 9000 & TQM
in Malaysia. The TQM Magazine, 8(5), 65-68.
Kanji, G.K., Abdul Malek, B., Tambi, A. & Wallace, W. (1999): Comparative study of
quality practices in higher education institution in the US and Malaysia.
Total Quality Management, 10(3), 357-372.
81
Muhammad Rais Abdul Karim (1997). Cadangan Langkah-langkah Pelaksanaan MS
ISO 9000 Bagi Agensi-agensi Kerajaan. Paper presented at the Simposium
Kebangsaan MS ISO 9000, Kuala Lumpur: Hotel Shangri-La, 6 & 7 Januari 1997.
Musalmiah Asli (1998). Entire Malaysian Civil Service Adopts ISO 9000. ISO 9000 News
Vol.7 No.l January/February 1998
Pekeliling Kemajuan Pentadbiran Awam (PKPA) Bilangan 2 Tahun 1996.
Garis panduan bagi melaksanakan ISO 9000 dalam Perkhidmatan Awam.
Saraph, J. V., Benson, P. G. & Schroeder, R.G. (1989). A Instrument for Measuring the
Critical Success Factors of Quality Management, Decision Science, 20(4), 810-829.
Zuraidah M. Z. & Zainal A. A. (2001). Total Quality Management Practice inMalaysia:
How much is written? Malaysia Management Review, 35(1), 51-58.
____ (1993). Buku Berurusan dengan Perkhidmatan Awam Malaysia. Kuala Lumpur:
Pelanduk Publications.
Dewan Bahasa dan Pustaka (2000). Kamus Dewan Edisi ke 3.
82
JOB DISCRIMINATION AND WORK PERFORMANCE RELATED PROBLEMS
FACED BY AN AGING WORKFORCE: SOME RESEARCH EVIDENCE
By
Associate Professor Dr. Hassan AH
Faculty of Business Management
Universiti Utara Malaysia
Abstract
This article reviews the research findings on two important employment related issues faced by
an aging workforce: job discrimination and work performance. Older workers encounter agerelated stereotypes that negatively discriminates them. These stereotypes hold that older workers
are difficult to train, are more resistant to change, have poor potential for self-development,
and are less productive. Older workers frequently encounter age discrimination when attempting
to find a job or seek re-employment. The research on the relationship between age and job
performance in occupational setting is relatively sparse due to numerous methodological
difficulties encountered in undertaking such research. The predominant age-job performance
relationship obtained is an inverted U-relation, although positive and negative relationships
are not uncommon.
Introduction
Industrial gerontology is a term coined by Murrel (1959) that examines occupational
aspects of aging. Industrial gerontology is concerned mainly with the study of
employment and retirement problems of middle-aged and older workers (Sprague,
1970). These problems can be traced back to the mid-1940s when they first begin to
appear (Casey, 1984). The Director-General of the International Labour Office in his
report has outlined a range of employment problems with which older workers may
confront. According to the report cited in Davies and Sparrow (1985):
"Age becomes a significant factor in a worker's life when, simply because of
advancing years, he begins to find difficulty either in doing his work or
finding or keeping a job. It is at this stage of his career that he becomes an
'older worker' from the standpoint of the world of work. The employment
problems which come into being with advancing years differ greatly in kind
and in extent from one country to another but they are shared by many
nations of the world. Older men and women capable of useful and productive
work, needing to work and ready and anxious to do so, tend to meet with
increasing difficulties as they get on in years. They may find it hard to
adapt to new methods and techniques and to keep up with the fast -changing
industrial society. They may find it difficult to maintain the rapid pace and
rhythm of many kinds of work. They may have to transfer to other work
better suited to their changing capacities. They may encounter discrimination
on the job. They may lose their jobs altogether. They may find it hard to get
any other job or to obtain retraining. They may be faced with rigid hiring
83
limits. They may find that what they have long dreaded is now happening
to them and that for all practical purposes they have been tossed on the
'human scrapheap' and that no one has much use for them or interest in
them (International Labour Office, 1962, Part 1, p.14).
The problems mentioned by the Director-General of the International Labour Office in
1962 has not changed substantially since it was outlined. Issues such as employment
discrimination, job performance, job satisfaction, work place accident, withdrawal
behavior, and retrenchment are all still relevant today to middle-aged and older
workers. This article provides some research findings spanning over fifty years on
two important employment problems faced by middle-aged and older workers namely
discrimination in employment and work performance.
Discrimination in Employment
One of the main problems cited by older workers regarding employment is age-related
stereotype held by employers and other employees (Stagner, 1985). These stereotypes
hold that older workers are difficult to train, are more resistant to change, have poorer
potential for self-development and most importantly less productive (Cleveland &
Landy, 1981; Rhodes, 1983; Stagner, 1985). Employers generally prefer to hire younger
workers as much as possible since they are seen to be well trained, physically more
capable, and less expensive than older workers (Pample & Williamson, 1985).
Rosen and Jerdee (1976a) surveyed a group of realtors and business school students.
They found older workers were regarded as less suited for highly demanding and
challenging jobs than younger workers. Older workers were also seen to be relatively
inflexible and more resistant to change. Further, older workers are likely to perform
poorly in tasks requiring high levels of creativity, productivity and motivation as
compared to younger workers. In a similar study, Rosen and Jerdee (1976b) conducted
an in-basket simulation exercise to investigate business student perception of decisions
made by older and younger managers. They found that older managers are perceived
to be more resistant to change, have less chances for promotion, less suitable for taking
financial decisions involving risk, and less motivated to keep up to date.
Older workers frequently encounter age discrimination when attempting to find a job
(Kasschau, 1976; McAuley, 1977) or when seeking re-employment (Jolly, Creigh,
Mingay, 1980). In a survey of almost 16000 job vacancies in the United Kingdom,
Jolly, Creigh, and Mingay (1980) found that in over one-quarter of the vacancies, agerelated hiring limits existed. Age discrimination is also found to exist in the United
States although it has Age Discrimination in Employment Act (ADEA) passed in 1967.
This Act was intended to prohibit discrimination on grounds of chronological age and
also discrimination in respect to hiring, firing, promotion, pay or any other aspect of
employment (Snyder & Barrett, 1988). Survey and opinion polls have found that
between 60% and 90% of employers agree age discrimination still occurs in the United
States despite the ADEA (Stagner, 1985).
84
Work Performance
The research literature on age and job performance in occupational setting is relatively
small. The paucity of research is partly because investigations of age and job
performance involve methodological difficulties (All, 2000; Davies, Taylor & Dorn,
1992; Griew, 1959; Smith, 1981; Welford, 1958). Production records, which appear to
provide valuable and informative data on job performance, may have serious limitations
(Welford, 1958). For example employees who consistently register declining output
may be transferred to other work or in extreme cases dismissed. As a result, as Davies,
Matthews and Wong (1991) observed that if productivity decreases with age, then
those more productive older workers remaining on the job will be unrepresentative of
their age cohort, and any comparison of the productivity of different age groups will
tend to favor older workers. On the other hand, older workers who perform well may
be promoted to supervisory positions, leaving less productive workers behind.
Therefore any age comparison carried out will tend to favor younger workers. Davies
and Sparrow (1985) suggest that age comparisons of job performance are only
meaningful when turnover and internal rates of transfer are low. Further, any age
comparison requires large samples of workers within different age groups who are all
engaged on exactly the same work. Welford (1958) argued that minor differences in
job characteristics might conceal major differences in the demands made on employee's
skills and abilities.
Despite the methodological difficulties, studies examining age and job performance
found no conclusive evidence of a relationship between age and job performance
pavies & Sparrow, 1985; Davies, Matthews & Wong, 1991; McEvoy & Cascio, 1989;
Rhodes, 1983; Waldman & Avolio, 1986; Warr, 1994). Rhodes (1983) in a comprehensive
review of the age and job performance relationship found mixed results between age
and job performance. Of the 34 studies that reported age and job performance
relationships, eight studies reported positive relationships, nine studies reported
negative relationships, eight studies found an inverted -U relationship, and nine studies
obtained no significant relationship between age and job performance. Rhodes (1983)
also considered the role of experience on the age-job performance relationship. Of
three studies reviewed, two reported an attenuating effect of experience on the
relationship between age and job performance. Performance was found to be essentially
the same across age groups when experience was controlled. Avolio, Waldman and
McDaniel (1990) also found experience to be highly correlated with job performance
than was age. The age-performance correlation dropped substantially when experience
was controlled. However the experience-performance relationship change very little
when age was controlled.
A meta-analysis conducted by McEvoy and Cascio (1989) on the relationship between
age and job performance found that age and job performance was essentially unrelated
(r = 0.07) irrespective of the type of performance measure and type of occupation.
Waldman and Avolio (1986) also conducted a meta-analysis to examine the relationship
between age and job performance and their study found a small but positive relationship
between age and job performance (r = 0.27).
85
Choice of performance measure used is a critical aspect in any age-job performance
study. It is generally accepted that production or output data are the most satisfactory
methods of determining the relationship between age and job performance. Clay (1956)
examined age differences in productivity among machine operators, compositors and
proofreaders at two British printing works. The study found performance peaked
among employees in their forties and declined thereafter. Schwab and Heneman (1977)
conducted a study among semi-skilled assemblers and moderately skilled sewing
machine operators and machine tenders. Their study found the correlation between
age and performance was near zero and non-significant. The study also found
experience predicted performance to a greater extent than does age. A study carried
out in the garment manufacturing industry (Giniger, Dispenzieri and Eisenberg, 1983}
found productivity of older workers surpassed that of younger workers. The study
also found experience rather than age moderated performance, with older workers
being more experienced than younger workers. Ali (1999) investigated the relationship
between age, experience and job performance of rubber tappers in Malaysia. Rubber
tappers irrespective of their age or gender essentially do the same job and are paid the
same wages. The study found an inverted U-relation between age and job performance.
Experience rather than age was also found to determine job performance of rubber
tappers. A study conducted among photocopier service engineers in the United
Kingdom also found an inverted-U relationship between age and job performance
(Sparrow and Davies, 1988). Further it was also found that experience rather than age
influenced job performance of the service engineers.
A performance rating is one other type of measure used in age-job performance studies
besides production data. Performance ratings given by supervisors or managers
however were found to be less satisfactory than output measures (Landy & Farr, 1983).
Cattle & Kline (1977) suggested that ratings tend to be unreliable across time and
susceptible to rater bias (Nieva & Gutek, 1980). Essentially, what this means is, ratings
given to an employee at two different points in time may never be the same. Further,
supervisors and managers who conduct the performance appraisal may also be biased
during the evaluation process. Studies have shown that the main cause of bias is the
stereotyping of older workers as less productive workers and this has given rise to
discrimination of older workers during performance evaluation (Davies, Matthews &
Wong, 1991).
The result of studies using performance ratings to measure the relationship between
age and job performance however has provided mixed results. Vecchio (1993)
investigated the impact of age differences between rater and ratee on ratings of
subordinate performance among high school teachers. The study found no significant
differences in job performance rating given to older or younger employees. In a study
of American air-traffic controllers, Cobb, Nelson and Matthews (1973) reported a
negative relationship between age and performance ratings given by supervisors, crew
chiefs and peers. They found older air-traffic controllers received lower evaluation
than their younger peers.
86
Price, Thompson and Dalton (1975) examined the job performance of engineers
employed in large technological companies in the US. Performance ratings were
obtained from managers of the engineers. The study found an inverted U-relation
between age and job performance. Rated performance increased initially, peaked in
the mid-thirties and declined thereafter. Horner (1980) found managers who were
over the age of 50 in a large American public utility company were rated as less receptive
to new ideas and slower to acquire new skills although they were technically more
competent than younger managers.
Summary
The International Labour Organization's 1962 report outlined discrimination in
employment and work performance among several of the major employment issues
facing middle-aged and older workers. Research conducted over the last five decades
suggests age discrimination in employment remains a major issue to older workers.
Older workers encounter numerous stereotypes held by employers and employees at
the workplace. They are deemed to be less productive, are resistant to change, and are
difficult to train. Older workers out of employment also encounter discrimination
when they attempt to find a job or when they seek re-employment.
Research examining the relationship between age and job performance in occupational
setting is relatively sparse because these investigations encounter numerous
methodological difficulties. Evidence from research nevertheless indicates that the
predominant relationship between age and job performance takes the form of an
inverted U-relationship although some studies have found positive and negative
relationships. The inverted - U relationship suggest that job performance initially
increases with age, peaks around the mid-forties and then declines. Although age is
shown to be related to job performance, experience has been found to be a moderating
variable that operates to influence the nature and direction of the age-job performance
relationship. Most studies though have found that experience predicts job performance
to a greater extent than does age. Hence, although decremental theory of aging
postulates that work performance declines with age, experience accumulated at work
over time is a better predictor of work performance than chronological age.
In conclusion, the research evidence reinforces the view that older workers face daunting
challenges in employment. Much of this evidence though come from research carried
out in the West where older workers retire very late in their life. The situation in
Malaysia however is quite different as older workers who retire earlier then their
counterparts in the West may well be physically and mentally strong. Much research
is therefore needed to examine this issue locally although research evidence from the
plantation sector in Malaysia suggests that evidence from rubber tappers confirms the
findings of previous research. This evidence though should not serve as an excuse for
employers to perpetuate stereotypes held about older workers but instead appropriate
human resource policies are devised to accommodate and suit the changing capacities
of middle-age and older worker.
87
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PRODUCTIVITY OF COMMERCIAL BANKS IN MALAYSIA (1990-1999)
By
Valli Boobal Batchelor
Banking and Finance Unit, Monash University Malaysia
Geeta Krishnasamy
Mahendhiran Nair
Bala Shanmugam
Corresponding Author
Abstract
This paper explores productivity growth of 10 commercial banks in Malaysia over the period of
10 years (1990-1999). Productivity is computed by employing the Malmquist productivity
index (MPI). The MP1 is calculated within the framework of Data Envelopment Analysis
(DEA), whereby productivity growths among the banks are decomposed into technical efficiency
change and technological change. The results of the DEA Program indicate that Bank H and
Bank J experienced productivity regress, whereas the other eight banks experienced productivity
growth over the period of study. Bank A displayed the highest productivity growth. The growth
in productivity is attributed to technical efficiency rather than technological change.
Productivity of Commercial Banks in Malaysia (1990-1999)
Introduction
The concept of productivity has been rooted in the production function approach
describing the relationship between factor inputs and product outputs. Productivity
of a firm has come to be interpreted as the ratio between outputs that it produces and
inputs that it uses. A method for aggregating the multiple inputs of a firm into a single
index of inputs must be used to obtain a ratio measure of productivity. Aggregation of
particular factors of production such as land and labor provides partial measures of
productivity, which can provide a misleading indication of overall productivity when
considered in isolation. On the other hand, total factor productivity (TFP), which
includes all factors of production, provides a thorough analysis of a firm's productivity.
Since early 1990s, the Malmquist productivity index {MPI) has been used as a tool to
measure productivity change in view of its ability to capture changes in technical
efficiency and technical change. Efficiency describes the degree to which an activity
generates a given quantity of outputs with a minimum consumption of inputs, or
generates the largest possible outputs from a given quantity of inputs. Firms in a
particular industry are technically efficient if they operate on the production frontier,
and technically inefficient if they operate below the frontier. In addition, productivity
91
comparisons through time includes an additional source of productivity change, called
technical change, which involves advances in technology represented by an upward
shift in the production frontier {Coelli et al., 1998).
Efficiency levels over time indicate how closely a firm operates to the production
frontier, hence, these measurements do not indicate whether the production frontier
has shifted or not. Higher efficiency from one period to another does not necessarily
mean overall higher productivity since the technology may have changed. When
measuring productivity, comparison is made across units and time, whereas in the
case of efficiency, the comparison is made against a predetermined standard or ideal.
Thus, productivity indicators give holistic view of a bank's performance across units
and time.
Studies on bank productivity across national borders have employed the non-parametric
Malmquist productivity index (MPI) approach to quantify productivity change and
these studies produced differing results. Alam (2001) and Mukherjee et al. (2001) studied
U.S. commercial banks during 1980s and they reported positive productivity growth,
whereas Grifell-Tatje and Lovell (1996) found rapid decline in productivity for Spanish
savings banks during 1980s.
The aim of this paper is to investigate whether productivity of commercial banks in
Malaysia have increased over the period of 10 years (1990-1999) using MPI. This index
is calculated within the framework of data envelopment analysis (DEA). DEA is used
to define the boundary of technology between two periods and to obtain the efficiency
score for each bank in each time period. It does so by creating an envelope of observed
production points {Chen and Yeh, 2000). MPI measures the productivity growth of an
entity between two time periods. Apart from examining productivity growth of these
banks, this paper also analyzes the components of productivity growth, i.e. technical
efficiency and technological change. One advantage of MPI is that it allows for this
decomposition.
This paper unfolds as follows. Section 2 gives a review of the literature on productivity
in the banking sector and discusses the ways to quantify productivity changes and
technical efficiency. Section 3 contains descriptions on the estimation methods employed
in this paper and details of the data. Results of the empirical analysis are explained in
Section 4. Finally, Section 5 presents the conclusions.
Literature Review
The banking sector worldwide is constantly and rapidly evolving due to factors, such
as deregulation, technological advance, financial innovation, and mergers and
acquisitions. As a result of these factors, substantial literature has developed around
the issues of bank efficiency and productivity and the different ways for measuring
them.
The evaluation of commercial banks' productivity/performance has been approached
from a variety of dimensions. The initial approach using financial ratios (e.g. return on
92
assets, return on equity) to evaluate productivity/performance is not considered
suitable for gauging the performance of banks. This is because banks produce multiple
outputs from multiple inputs, and consistent aggregation is not possible1.
The second approach is parametric and it uses econometric techniques that focus on
estimating the characteristics of the production or cost function and measuring
economies of scale. Ferrier and Lovell (1990), Kaparakis et al. (1994), and Altunbas et
al. (1995) investigated the performance of banks using stochastic parametric approach,
meanwhile Humphrey (1991) used growth accounting models. In addition, Bauer et
al. (1993) used both the stochastic econometric frontier and the "thick frontier" approach
in estimating total factor productivity growth of U.S. commercial banks. Haynes (1999)
analyzed the U.K. building societies using augmented production function approach.
The third approach uses linear programming to construct frontiers to measure
productivity changes and can be labeled as a non-parametric programming approach.
DEA and MPI encompass non-parametric techniques of efficiency and productivity
measurements. The application of non-parametric approach to evaluate the performance
of banking markets was first undertaken by Sherman and Gold (1985).
Voluminous researches have focused on the use of DEA to construct non-parametric
frontiers and to derive efficiency score (e.g. Aly et al., 1990; Berg et al., 1991; Berger
and Humphrey, 1991; Chen and Yeh, 1997; Elyasiani and Mehdian, 1995; Ferrier and
Lovell, 1990; Parkan, 1987; Rangan et al., 1988; Seiford and Thrall, 1990; and Sherman
and Gold, 1985).
MPI has been popularly adopted as a tool to measure bank productivity in many
countries, such as United States (Alam, 2001); Norway (Berg et al., 1992); Australia
(Avkiran, 2000); Spain (Grifell-Tatje and Lovell, 1996); Korea (Gilbert and Wilson, 1998)
and Taiwan (Chen and Yeh, 2000).
While much study has been done on productivity of banks in developed countries
such as U.S., U.K., and Canada, the same cannot be said of the Malaysian banking
environment. Bank performance studies that have been undertaken in the area of
technical efficiency in Malaysia (e.g. Katib, 1997 and Habibullah, 1990) provide only a
partial measurement of productivity of banks. Hence, this study is expected to be the
first to utilize MPI as the methodology to measure productivity changes of Malaysian
banks and to decompose the productivity changes into technical efficiency and
technological change.
Methodology
DEAP software version 2.1 was employed to measure bank productivity (Coelli, 1996).
The concepts underlying DEAP software version 2.1 will first be discussed in order to
provide a clear understanding of DEA and MPI model.
1
See Sherman and Gold (1985); Barnes (1987); Smith (1990) and Fernandez-Casrro and Smith (1994) for other
limitations of the ratio analysis.
93
Model Specification and Statistical Procedure
The figure below illustrates single-input and single-output production technology,
which determines the efficiency score and Malmquist index of total factor productivity
(TFP) under constant returns to scale.
Y
,=e
Xnt
=a
o
X
Source: Alam (2001), "A nonparametric approach for assessing productivity dynamics of large
U.S. banks", Journal of Money, Credit and Banking, Vol. 33, pp.130.
The line from the origin, labelled Tt and Tt+1, represent the boundaries of technology at
time t and t+1, respectively. Since Tt+1 is above T^ technological progress has occurred
between period t and t+1. Point (xnt/ ynt) in the graph above represents firm N in period
t. Since this point is interior to T^ this firm is inefficient and its output inefficiency is
measured as the ratio Oa/Ob. Similarly, the firm in t+1, denoted by the point (x M,
yn t+1), is inefficient with respect to the Tt+1 frontier and its inefficiency score is given by
Oe/Of.
The decomposition of MPI into changes in technical efficiency and changes in frontier
technology is illustrated in the formula as follows:
For bank N, the decomposition is :
Malmquist Index = (Q
* { (Oe/QJ (0 /flb)} ^
(Oa/0b) {(Oe/0f) (0./OJ
= (Oe/Of) (Ob/Oa) * {(Of/Oc) (Od/Ob) J1'2
= E,. *A..,
- Alam (2001) op cit.
94
This index captures the dynamics of productivity change by incorporating data from
two adjacent periods : EAsub £+l A reflects changes in relative efficiency while AAsub
f+2 A reflects changes in technology between t and t+1.
In addition, DEA is used to define the boundary of technology between two periods
and to obtain the efficiency score for each bank in each time period. It does so by
creating an envelope of observed production points.
The formula presented above is then computed using DEAF software version 2.1,
which is a mathematical linear programming tool developed by Coelli (1996). For the
indices and its components, a value below 1 indicates productivity decline while values
above 1 indicate growth (Alam, 2001).
Subj ect^Variables
This study adopted an intermediation approach, which views a bank as an intermediary
between suppliers and users of the funds. This method uses the dollar value of accounts
such as loans and deposits as outputs and all costs of funds as the input variables. The
intermediation approach is more appropriate in the Malaysian banking context. This
is because the source of data for commercial banks in Malaysia largely comes from the
published balance sheet information, which is in dollar value.
In accordance with this approach, two types of banking output are specified, namely
loans and advances and total deposits. Deposits however, may be treated as inputs or
as outputs under the intermediation approach. For this analysis, deposits are treated
as outputs. Total deposits comprise of deposits from customers and deposits and
placements of banks and other financial institutions. In addition, two inputs are specified
in this study, which are labor and total assets (excluding loans, advances and financing).
Source of Data
As at February 2,2002, there were 24 commercial banks (excluding Bank Islam Malaysia
Berhad) operating in Malaysia and of these, 11 were locally incorporated banks and 13
were foreign banks (BNM, 2002). For the purpose of this analysis, only 10 commercial
banks operating in Malaysia are included in the study sample for 10 years from 1990
to 1999 (see Appendix 1). The names of the banks included in the study is not being
divulged and will be termed as Bank A, Bank B, and so forth.
Some banks had to be excluded due to the inconsistent availability of data between
1990 and 1999, primarily due to mergers and acquisitions. According to Coelli (1996),
the MPI approach deals with panel data. In order to run the DEAF version 2.1 for MPI
method, the panel must be "balanced", whereby all firms must be observed in all time
periods. Thus, due to unavailability of data, some of the information needed was
missing for certain banks for one or more years. Thus, these banks have been excluded.
All data were extracted from the individual bank's annual reports from 1990 to 1999.
95
Findings
The productivity index for each bank in the sample was computed. For the whole
sample, the mean TFP change score is quite high (1.013). This implies that the gap in
the productivity difference among the 10 banks is not too large, since all banks face
keen competitive pressure in Malaysia. Among the 10 commercial banks, Bank H and
Bank J were categorized unproductive, whereas the other banks in the sample fell
within the productive category. Bank A displayed the highest productivity growth,
which mainly stem from technological advancement as compared to technical efficiency,
whereas Bank J displayed the lowest productivity growth among the group of
commercial banks (See Figure 1).
Overall, there is total factor productivity growth over the 10 years, which is indicated
by the index value of more than 1 for all the banks in the sample. Nevertheless, the
productivity index starts to drop significantly below 1 from 1992 to 1994 (See Figure
2). This rapid decline in productivity among the banks may be due to the increase in
the amount of non-performing loans. Tn a study of U.S. banks, Berger and DeYoung
(1997) found that increases in non-performing loans tended to be followed by decreases
in measured cost efficiency. Gilbert and Wilson (1998) stated that a possible reason for
this relationship was that non-performing loans were more costly for banks to service
than other loans. So, productivity regress among Malaysian banks during 1992-1994
can be attributed to high non-performing loans.
0.9
0-88
Bank A Bank B Bank C Bank D Bank E Bank F Bank G Bank H Bank I Bilrlk J
Total Factor Productivity ('I'M') Change
Figure 1 Malmquist Productivity Index for Bank Means
Year
Total Factor Productivity (TFP) Change
Figure 2 Malmquist Productivity Index for Annual Means
96
Bank A and Bank J operated at technically efficient production point for each of the ten
years, whereas other banks in the sample was technically inefficient. This indicates
that Bank A and Bank J consistently obtained maximum output for a given set of inputs
for every year in the sample period.
Since the TFP change index is the product of the technical efficiency change index (TE)
(relative to a CRS technology) and the technological change index (TC), the relative
sizes of these scores provide evidence as to the source of the overall productivity
change. The mean TE is found to be slightly higher than the mean TC (see Appendix
2), suggesting that the technical efficiency factor has greater importance than
technological change factor as a source of productiveness among all banks in the sample.
Thus, productivity at all these banks may be attributed to the proper utilization of
input or the correct selection of input combinations rather than advancement in
technology. In other words, the productivity changes of the banks were primarily
caused by the movement within the production function (technical efficiency change)
as compared to shift of the production function (technological change).
Malmquist TFP index and its components for different time periods (over all firms)
and for the different firms {over all time periods) are presented in Appendix 2 and 3,
respectively. All indices are relative to the previous year, thus the results begin with
year 2, i.e. 1991, instead of 1990.
Conclusion
This paper analyzed the productivity growth in the Malaysian commercial banks during
the 1990s within the framework of the DEA piecewise linear frontier production function
and the MFI. The MPI allowed the analysis of not only average productivity growth of
the commercial banks, but also frontier growth and optimal resource utilization. The
former refers to technological advancement, whereas the latter indicates technical
efficiency.
DEAP version 2.1 explicitly tested whether the productivity increased among Malaysian
commercial banks during the 1990s and found productivity progress during the
observation period for eight of the banks. On the other hand, Bank H and Bank J
experienced productivity regress during the period. Bank A experienced the highest
productivity growth in the study sample. The productivity changes of the banks were
primarily determined by changes in technical efficiency as compared to changes in
technological investment.
Overall, the results suggest that the banks experience positive technical efficiency change
and also technological change. This indicates that most of the banks in the study sample
have innovated and were operating at technically efficient production points, which
means that the banks are able to obtain maximum output for a given set of inputs. The
presence of positive technological change indicates that the production frontier has
shifted upwards over time. This means that with the presence of technological
innovation, banks are able to produce more output using less input.
97
It is important to derive the productivity index for commercial banks since it enables
the ranking of commercial banks with respect to each other according to their own
productivity index. Since performance is a relative measure, the comparison of the
productivity growth among the banks proves to be useful in enhancing competition in
the banking industry. In addition, the productivity index derived in this study can
prove to be useful in guiding merger decisions, whereby the productivity index of
banks before and after merger is compared to ascertain whether the proposed merger
is justified for the anchor banks.
References
Alam, Ila. M.S (2001), "A nonparametric approach for assessing productivity dynamics
of large U.S. banks", Journal of Money, Credit and Banking, Vol. 33, pp.121-139.
Altunbas, Y., Evans, L. and Molyneux, P. (1995), "Universal banks, ownership and
efficiency: A stochastic frontier analysis of the German banking market", Institute
of European Finance, University of Wales, Bangor.
Aly, H.Y., Grabowski, R., Pasurka, C. and Rangan, N. (1990), "Technical, scale, and
allocative efficiencies in U.S. banking: An empirical investigation", Review of
Economics and Statistics, Vol. 72, pp.211-218.
Avkiran, N.K. (2000), "Rising productivity of Australian trading banks under
deregulation 1986-1995", Journal of Economics and Finance, Vol. 24, pp.122-140.
Barnes, P. (1987), "The analysis and use of financial ratios: A review Article", Journal of
Business, Finance & Accounting, Vol. 14, pp.449-461.
Bauer, P.W., Berger, A.N. and Humphrey, D.B. (1993), "Efficiency and productivity
growth in U.S. banking. In: Fried, H., Lovell, C.A.K. and Schmidt, S. (Eds.), The
measurement of Productive Efficiency. Oxford University Press, New York,
pp.386-413.
Berg, S.A., Forsund, F., Jansen, E.S. (1992), "Malmquist indices of productivity growth
during the deregulation of Norwegian banking, 1980-1989", Scandinavian Journal
of Economics, Vol. 94 (Suppl), pp.211-228.
Berg, S.A., Forsund, F.R. and Jansen, E.S. (1991), "Bank output measurement and the
construction of best practice frontiers", Journal of Productivity Analysis, Vol. 2,
pp.127-142.
Berger, A.N. and DeYoung, R. (1997), "Problem loans and cost efficiency in commercial
banks", Journal of Banking and Finance, Vol. 21(6), pp.849-870.
Berger, A.N. and Humphrey, D.B. (1991), "The dominance of inefficiencies over scale
and product mix economies in banking", Journal of Monetary Economics, Vol. 28,
pp.117-148.
BNM (2002), Available at: http://www.bnm.gov-my/en/Links/bi.list.asp.
Chen, T.Y. and Yeh, T.L. (1997), "A study of efficiency evaluation in Taiwan's banks",
International Journal of Service Industry Management, Vol. 9, No. 5, pp.402-415.
Chen, T.Y. and Yeh, T.L. (2000), "A measurement of bank efficiency, ownership and
productivity changes in Taiwan", The Service Industries Journal, Vol. 20, pp.95109.
Coelli, T.J. (1996), "A Guide to DEAP Version 2.1: A Data Envelopment Analysis
(Computer) Program", CEPA Working Paper No. 8/96, ISBN 1 86389 4969,
Department of Econometrics, University of New England, pp. 49.
98
Coelli, T., D.S. Prasada Rao, and G.E. Battese (1998), "An introduction to efficiency
and productivity analysis, Boston: Kluwer Academic Publishers.
Elyasiani, E., and Mehdian, M. (1995), "The comparative efficiency performance of
small and large U.S. commercial banks in the pre- and post- deregulation eras",
Applied Economics, Vol. 27, pp.1069-1079.
Fernandez-Castro, A. and Smith, P. (1994), "Towards a general non-parametric model
of corporate performance", OMEGA, Vol. 22, No. 3, pp.237-249.
Ferrier, G.D. and Lovell, C.A.K. (1990), "Measuring cost efficiency in banking:
Econometric and linear programming evidence", Journal of Econometrics, Vol. 46,
pp.229-245.
Gilbert, R.A. and Wilson, P.W. (1998), "Effects of deregulation on the productivity of
Korean Banks", Journal of Economics and Business, Vol. 50, pp.133-155.
Grifell-Tatje, E., and Lovell, C.A.K. (1996), "Deregulation and productivity decline:
The case of Spanish savings banks, European Economic Review, vol. 40, pp.12811303.
Habibullah, M.S. (1990), "Empirical evidence on the operating efficiency in commercial
banks in Malaysia: A note", Paper prepared by the Department of Economics, Faculty
of Economics and Management, Universiti Pertanian Malaysia.
Haynes, M., and Thompson, S. (1999), "The productivity effects of bank mergers:
Evidence from the U.K. building societies", Journal of Banking and Finance, Vol.
23, pp.825-846.
Humphrey, D.B. (1991), "Productivity in banking and effects from deregulation",
Economic Review, Federal Reserve Bank of Richmond, Vol. 77(2), pp.16-28.
Kaparakis, E.I., Miller, S.M. and Noulas, A.G. (1994), "Short-run cost inefficiency of
commercial banks: A flexible stochastic frontier approach", Journal of Money, Credit
and Banking, Vol. 26, pp.875-893.
Katib, M.N. (1997), "Technical efficiency of commercial banks in Malaysia", Banker's
Journal Malaysia, No. Ill, pp.40-53.
Mukherjee, K., Subhash, C.R., and Miller, S.M. (2001), "Productivity growth in large
U.S. commercial banks : The initial post-deregulation experience", Journal of
Banking and Finance, Vol. 25, pp.913-939.
Parkan, C. (1987), "Measuring the efficiency of service operations: An application to
bank branches", Engineering Costs and Production Economics, Vol. 12, pp.237-242.
Rangan, N., Grabowski, R., Aly, H.Y. and Pasurka, C. (1988), "The technical efficiency
of U.S. banks", Economic Letters, Vol. 28, pp.169-175.
Seiford, L.M. and Thrall, R.M. (1990), "Recent developments in DBA: The mathematical
programming approach to frontier analysis", Journal of Econometrics, Vol. 46, pp.738.
Sherman, D.H. and Gold, F. (1985), "Bank branch operating efficiency: Evaluation with
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Vol. 18, No. 2, pp.131-138.
99
Appendixes
Appendix 1
List of Commercial Banks in the Sample
Hock Hua Bank
Pacific Bank
Maybank
Oriental Bank
Public Bank
Bank Utama
Ban Hin Lee Bank
Southern Bank
Affin Bank
Wall Tat Bank
Appendix 2
Malmquist Index Summary of Annual Means for All the Banks in the Sample
iV'.
Year
Technical Efficiency Change
Technological
Change
1.011
1.009
1.026
0.997
1 .026
0.975
0.967
0.989
1.097
0.984
Mean 1.007
0.985
1991
1992
1993
1994
1995
1996
1997
1998
1999
0.914
0.969
1.119
1.051
1.057
0.976
0.988
1 .006
(TFP) Change
1 .020
1.011
0.911
0.994
1.091
1.017
1.046
1.071
0.972
1.013
Appendix 3
Malmquist Index Summary of Individual Banks
Technical
Technological
Efficiency Change
Change
(TFP) Change
Bank A
1.017
1.033
Bank B
Bank C
Bank E
Bank F
BankG
Bank H
Bank T
Bank J
0.993
1 .000
1.023
1.018
1.021
0.995
1.012
1.003
0.991
1.026
1.026
1.000
1.013
0.996
1 .006
0.980
1.035
0.949
1.051
1.018
1.026
1.023
1.031
1.017
1.001
0.992
1.038
0.941
Mean
1.007
1.006
1.013
Bank
Bank D
100
ONLINE ENERGY-USE BENCHMARKING FOR THE INDUSTRIAL
SECTOR IN MALAYSIA
By
K. Ernest
Research Officer
Malaysia Energy Centre
R. Ponudurai
Chief Technical Advisor
Malaysia Energy Centre
Tuan Syed Abdul Rahman Al-Haddad
University Putra Malaysia
Abstract
The study is intended to explore the viability of developing a web-based tool to facilitate a
holistic approach to energy-use benchmarking management Malaysian Industrial sector. Energyuse benchmarking uses the measure of the plant's specific energy consumption to assess its
energy performance, which latter can be used as a baseline for future energy efficiency and
energy conservation activities. The measures can also be used to chart out future energy policies
related to the development of national energy sector.
The system developed is a migration of the manual data collection system which limitations to
the number of companies that can use the same. The energy-use benchmarking community
which is customarily known as the Industrial Energy Efficiency Community (1EEC) was created
as part of the National Productivity Corporation's (NPC) Benchmarking On-line Networking
Database (BOND). Currently, the community has a membership of industries from eight energy
intensive sectors in Malaysia, and this will be extended to the entire industrial sectors in
stages.
Among others, the on-line tool developed can perform automatic statistical analysis in the
following:i.
ii.
in.
Computing energy-use benchmarks
Evaluating performance of the community
Ranking companies' performance according to selected indicators
In order to evaluate the usability of the system, a sample of four companies from the wood
sector were selected. A survey conducted among the selected factories on the usability of the
system showed 83 % favorable. However, there are still opportunities available for enhancement
of the tool for better usability that can result in more competitive benchmarking analysis.
Further descriptive statistics can be derived from the collected and analyzed data. Analysis
shows that there is a performance gap of 59 % among the selected sample companies, which can
work together to close this gap through end-use energy efficiency.
Through daily monitoring and setting targets for determining slack in energy performance and
improving end-use energy efficiency respectively, the participating industries can arrest not
only fast depletion of fossil fuel reserves but also the negative impact to the environment due to
the excessive emission of greenhouse gasses (GHG).
101
Introduction
The objectives of the research are:
i.
to study and develop an on-line interactive tool for energy-use benchmarking
activities
to evaluate the functions and usability of the e-benchmarking system
to make an intelligent recommendation from the benchmark information
generated.
Incorporating human computer interface (HCI) techniques in energy-use benchmarking
activity will overcome some of the barriers in implementing and promoting energyuse benchmarking as a daily productivity improvement tool to achieve end-use energy
efficiency. It will also assist in the implementation of energy management programme
using data and information obtained from energy -use benchmarking activities, thus
making energy management holistic and sustainable.
Establishment of current operational specific energy consumption will enable top
management to adopt strategies that will ensure an effective and holistic approach to
energy management.
A well-documented study on industrial energy-use benchmarking exercise will serve
as an excellent guide and motivation for industries to pursue energy efficiency
improvement activities in Malaysian environment where both the relevant legal and
financial frameworks are not in place yet.
Motivation
Industries will not be able to optimize its energy consumption unless their SECs are
compared with others in similar operation. Energy-use benchmarking will facilitate
the comparison exercise and the application of HCI will further enhance the pursuance
of such exercise.
Energy-use benchmarking in developing countries, where energy subsidy has greatly
influenced the structuring of the energy tariff, is relatively a low preferred productivity
activity among the industrial sectors. Besides the low energy price, many other reasons
can be attributed to this attitude. Among them, the user's hostilities in acquiring the
respective data and the absence of user friendly tools or system for analyzing such
data can be considered as a common reasons for both the developed and developing
countries. A systematic approach to an easy, simple and interactive data collection
and analytical system is essential with the aim of outreaching to as many industries as
possible. Another main barrier in data collection is the issue of confidentiality in
providing information.
102
Literature Review
The research discusses the energy consumption trends in Malaysia, current data
collection activities, and various parameters analyzed for the establishment of an online
data collection system for energy-use benchmarking. This includes operation of plant
level Energy Management Information System (EMIS), principles of human computer
interface and its application in the benchmarking model that will be incorporated in
this study to fulfill the requirements for benchmarking.1
Energy Consumption Trend in Malaysia
The manufacturing sector is the highest consumer of energy and the trend in energy
consumption continues to increase in 2005 as shown in Figure 1.
Final Commercial Energy Demand by Sector
700-,
D Industrial
600li Transport
500-
PJ
400-
D Residential &
300-
Commercial
Q Non-energy
200100-
1 Agricultural &
01995
2005
Korestry
Figure 1 Trends in Energy Demand by Sectors
Although to a certain extent the energy demand growth takes the same direction of
that of the Gross Domestic Product (GDP), some developed countries that are engaged
in sustainable energy efficient activities are out of this trend. Subsequently, a recent
study has shown that Malaysia will be a net importer of energy from its current position
as a net exporter by the year 2008.
1
Requirement for benchmarking:
o
o
Large number of samples
Data collection system that is able to outreach to large number of factories
o
o
o
o
Ensuring confidentiality of the data provided - username and password protected
Parameter or indicator for the establishment of the benchmarks
Statistical analysis of the data provided
Computation of results
103
Review of Benchmarking and Data Collection Activities
Though benchmarking unfolds many benefits, priority has not been given in the field
of energy usage. One country where such activity has been implemented at national
level is Thailand. In Malaysia, the Department of Statistics and National Productivity
Corporation carry out benchmarking and data collection activities at national level.
The activities are summarized in the following table :
Table 1
Summary of Data Collection Activity
No
Country/
Department
I
Malaysia Department of
Statistic
National
Productivity
Corporation
Legal
framework exist
Requirement by
the Ministry of
International
Trade and
Industry
Voluntary
participation
Type of data
collected
Metho^
Tool used
Comments
Data related to
Industrial
manufacturing
excellence
Mail enquiry
Data gathered
pertaining to
electricity and
fuels are the total
amount
purchased in
monetary value.
Due to the
varying
electricity tariff
structure in
Malaysia, these
figures cannot be
used to compute
the energy- use
indices for an
industrial sector
Productivity
improvement and
e-benchmark
system since
No data on end
quality related data
2002
use energy
consumption in
the industrial
sector
Malaysia Energy
Centre - executing
Voluntary
participation
Malaysian
Industrial Energy
Efficiency
Improvement
Project (Ml EEIP)
Thailand
Manual data
collection
Energy
Conservation
Energy
consumption
and Promotion
Act
data from
industries
TheMIEElPisa
4- year project,
which started in
1999. Data
collection limited
to 48 companies
from eight energy
intensive industrial
sectors
agency for the
2
End-use energy
consumption data
Developed
software to
analyze data and
generate
feedback report
Provides
information to
the government
on the status quo
and development
of the energy
sector in the
country.
104
Combining HCI Techniques for Energy-use Benchmarking
HCI seeks to discover the most efficient way to design understandable electronic
messages so that interaction and communication between the user and computer will
be most effective. Some of the key feature in HCI design (explained by Shneiderman
and Donald Norman1) is summarized in the following section:
i.
Recognize diversity in identifying the type of users and classifying them according
to their familiarity in using the computer system. The design feature incorporates
and accommodates user's requirement/desire (user friendliness).
ii. Consistency in sequences of actions in similar situations, terminology used in
prompts, menus, and help screens and color, layout, capitalization and fonts
iii. Enables frequent users to use shortcuts to increase the pace of interaction by using
abbreviations, special keys, hidden commands and macros
iv. For every user action, the system should respond in a form of feedback to the
users. This feedback guides the users in the right track while using the system.
v. Sequences of actions should be organized into groups with a beginning, middle
and end. The informative feedback at the completion of a group of actions shows
the user their activity has completed successfully.
vi. Forms should be designed in a way that users cannot make a serious error while
filling up information such as alphabetic characters in numeric entry fields. If users
make an error, instructions should be written to detect the error and offer simple,
constructive, and specific instructions for recovery. Long forms should be
segmented so that the user is not penalized by having to fill the form in again.
vii. Permit easy reversal of actions. Surprising system actions, tedious sequences of
data entries, inability or difficulty in obtaining necessary information, and inability
to produce the action desired will build anxiety and dissatisfaction among users.
viii. Memory load can be minimized by designing screens where options are clearly
visible, and/or using pull-down menus and icons.
ix. Steps can be taken to design so that errors are less likely to occur, using methods
such as organizing screens and menus functionally, designing screens to be
distinctive and making it difficult for users to commit irreversible actions. Expect
users to make errors, try to anticipate where they will go wrong and design with
those actions in mind.
HCI models play an important role for a practical user interface design activity. The
characteristics of highly interactive models are ones that provide frequent and extensive1
Human Computer Interface Design. 1999.
www.usak.ca/education/ coursework/ skaalid/ theory / interface.htm.
105
29 May 2003 feedback such as immediate interpretation of the user's action as well as
direct and continuous feedback during input and processing.
Using the HCI principles and usability criteria, the system developed will be evaluated
by selected users on its compliance to usability.
Energy Management Information System (EMIS)
Energy management is a systematic approach with well planned actions aimed at
reducing or controling an organization's energy consumption. The implementation of
such actions will eventually not only reduce the energy bill of a plant but also minimize
detrimental environmental impacts.
Among many other activities, a successful energy management requires the
establishment of a system to collect, analyse and report an organization's energy
consumption and costs. This will give an overview of energy-use to identify saving
potential at plant level. The system should be able to use both past and on-going energy-
use data to produce relevant reports on regular basis. Information derived from these
reports can be used to determine the status of the energy usage trends of the plant. The
frequency of these reports will depend on plant-to-plant requirements.
The EMIS is a real-time data acquisition and monitoring system, which consist of both
hard and soft wares. The hardwares which, consists of sensors and tranducers are
usually installed at strategic locations in the energy flow lines to capture the relevant
data for the pre-determinal analysis.The system also incorporates HCI modes to
facilitate user friendliness of the same.
Creation of an Online Data Collection System for Energy-use
It is assumed that a system similar to EMIS is established at all companies involved in
the MIEEIP1. Energy-use benchmarking analyses energy consumption against
production as shown in figure 2.
A typical benchmarking process involves four phases : planning, analysis, itergration
and action. By incorporating HCI, the entire benchmarking implementation phases
can be simplied in the planning and analysis phases where an online system is able to
perform these tasks as pre determined by the developer. The system is able to identify
and cluster industries into groups based on the sector or sub sector they belong to.
1
The Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP), co-funded by the government
and the United Nations, introduced a comprehensive and holistic approach to industrial energy efficiency
by targeting several energy intensive sectors. The project was carried out through eight programs to promote
energy-use benchmarking; energy audits; energy rating and best practices; promotion and training; support
for the energy service companies; pilot projects in eight industrial sectors; manufacture of energy efficient
equipment and the participation of financial institutions. A total of 48 audits have been completed involving
energy management by facts (the audits are between walk-through and detailed audits), and the data obtained
have been analyzed for benchmarking purposes and to recommend energy and cost savings.
106
Thus, the user will be able to compare company's own performance with others in
similar operations without knowing the identity of the users in the community. This
will form the basis for making "apple to apple" comparison; which is a very important
factor in energy-use benchmarking.
Furthermore, it allows access to users (industries) to get updated information about
their energy performances periodically. The analysis also provides necessary
information for the management to chart short and long-term plans to close the gaps
in SECs among the community, thus leading the way to improve energy efficiency or
become the benchmark for others.
The system's web based character will able to cover a large number of users. It is
created with the provision to benchmark unlimited number of users belonging to the
industrial sectors pre-selected for the study.
Current
Energy consumption
Current
energy use
standards
production data
Set targets
Best practice
benchmark
Actual consumption
Action plan
new target
Figure 2 Benchmarking
Methodology
The energy-use benchmarking community known as "Industrial Energy Efficiency
Community" is created as part of the BOND at http/bond.npc.org.my/bench. It is an
additional complimentary feature to the existing system. The community comprises
eight industrial sectors targeted by MIEEIP, namely, cement, pulp and paper, ceramic,
food, wood, glass, iron and steel and rubber. These sectors are identified as energy
intensive sectors in Malaysia.
107
Subsequently, the Malaysia Energy Centre (MEC) and the National Productivity
Corporation (NPC) signed a Memorandum of Understanding (MoU) on 6 May 2003 to
formalise co-operation to set up and administer an online interactive benchmarking
system for energy use. This co-operation is part of MIEEIP's aim to promote energyuse benchmarking as a daily productivity improvement tool among the Malaysian
industries. Figure 3 shows the components for the creation of the Industrial Energy
Efficiency Community.
Industries
(8 manufacturing sectors targeted
under the MIEEIP)
HCI bridges the gap between the online
system at NPC and the industries by
creating the networking and
communication link between them
T j * • i Energy
ri-iK Industrial
OJ EfficiencyJ
_
•»
Community
Inputs to energy-use
benchmarking
,
/
\.
/
\.
EMIS +
,
data
.,Online
..
collection system
created at NPC
Set parameters for
energy-use
benchmarking
A-cirrrn
MIEEIP
,.
benchmarking
model
Figure 3 Process Flow and Input for the Creation of Industrial Energy Efficiency
Community
108
The workflow structure of the e-benchmark system is shown in figure 4
Industrial Energy
Efficiency
Community
i
* Indicator
i
Administration
I———————————————I,
i
* Organisation
i
Administration
User
Sign-in
Indicator
Form/ data entry
form
Scores
Report
. • your organisation
.
\ • community performance I
(min, median, max)
I
trend
i
I • graph
'
Ranking
• Your value
• Benchmark
• Ranking
Overall
Min, median, max
Lower quartile
Upper quartile
* Pre-set and created by the Community Manager
Data Collection
Energy Consumption Data
The data input requirement for the establishment of SEC is based on the MIEEIP's
energy auditing experience in 48 companies belonging to the eight sectors. The
computation of SEC is derived as per Equation 1:
SEC = Amount of energy used (GJ)
Production output (unit)
Equation 1 Computation of Specific Energy Consumption
109
The pattern of thermal and/ or electrical energy used in the analysis is related to
production of the manufactured goods of the plant. In the chipboard manufacturing
process, thermal energy is mainly consumed in the drying, screening and hot pressing
processes, whereas, electricity is mainly consumed in the chipping and flaking process.
The fuel type used depends on the process requirements of the individual plant. In the
chipboard manufacturing process, fuel consumption in the drying process is relative
to the amount of heat required to reduce the moisture content of the wood chips by
approximately 30%. The drying process uses the thermodynamic heat transfer equation
(as shown below) to arrive at the energy requirements to reduce the moisture content.
Equation 2: Q = m.Cp.dT
(Heat Transfer Equation)
Where,
Q =
m =
Cp =
dT =
heat input (MJ)
mass of substance (kg)
specific heat of substance (MJ/kg K)
temperature difference of substance (°C)
The application of heat transfer equation for chipboard drying process is shown below:
From Equation 2,
let
m - [ p ( v) (n)J
Where,
p
v
=
=
=
n =
Cp =
density of rubber wood, (769
approximate volume of flake;
2/3(P)(thickness)3 , (m3)
number of flakes per batch
Specific heat value of rubber wood,
(2.7196 MJ/kg K)
dT = temperature difference in the drying process
Substitution for "m" in equation 2 will be: -
Equation 3
dQ = p.v.n. Cp. dt
The thermal and electricity consumptions are converted to a common unit, which is
usually in giga joules (GJ). For the thermal energy, the respective net calorific values of
fuels are used to compute the final consumption. The primary electrical energy
consumption is measured in kWh and later, the same is converted to its equivalent GJ.
Basing on the experiences of the MIEEIP, the details of the common fuel used by the
various Malaysian industrial sectors are shown in table 2.
110
Table 2
Coversion Factor for Electricity and Fuel
No.
Type of utility
Net Calorific
Value (GJ/
Nat. unit
Conversion to GJ
natural unit)
1
2
3
4
5
Electricity
6
7
8
9
Medium Fuel Oil
litre
Kerosene
litre
Natural gas
Sm3
Hardcoal
KWh
tonne
Antracite
tonne
Wood
tonne
Diesel
litre
Light fuel oil
litre
0.0036
30.000
32.300
14.700
0.0361
0.0361
0.0385
0.0361
0.0365
[KWh]*0.0036
[tonne]*30
[tonne]*32.3
[tonne]*14.7
[litre]* 0.0361
[litre]* 0.0361
[litre]* 0.0385
[litre]* 0.0361
[sm3]* 0.0365
Production Data
Plants producing more than one finished good have to be studied carefully to arrive at
a reporting system that will represent the actual situation.
If any product takes up 80% of the raw material processed, that product is considered
as the main product.
In case where many products take almost equal amount of raw material, the
computation of SEC can be arrived from the amount of energy required to process one
unit of raw material.
Based on the agreement among the participating members of a particular sector or sub
sector, the production unit is organized to be entered as tonne or metre cube. If the
production units are in either in kilogramme or litres, they should be converted to the
above units.
Computation of SEC
The tertiary data used in the calculation of SEC is either in GJ/tonne or GJ/m3, as
discussed in the previous section.
The e-benchmark tool will automatically compute the SEC and rank the same among
the other participating members of the same sub sector.
Ill
Generating the Output
From all the computed values, the participating companies can immediately obtain
the following feedbacks on their energy performances.
Scores
Scores shows the performance of own organization against the community performance.
It displays the minimum, median and maximum value of the community. The minimum
and the maximum value is the optimization value for selected indicators according to
how the system is preset.
Ranking
In the case of ranking SECs, it is "lower the better". As mentioned earlier, the ebenchmark tool will rank the SECs from the lowest to the highest. The display of the
above values will provide all the necessary information of an individual's energy
performance status.
Overall
Gives the scores of community including the upper quartile and lower quartile.
The upper quartile is calculated as the average value from the range figures that are
fall within 75 % to 100 % of the overall figures.
n
= X (75%-100%)
(75%-100%)
The lower quartile is calculated as the average value from the range figures that are
fall within 0 % to 25 % of the overall figures.
n
£ = X (0% -25%)
1 =
1
(0%-25%>
Analysis and Results
The real-time analysis of the data obtained from the chipboard sub-sector will be used
for the energy benchmarking studies. In addition to the basic auto-calculated values, a
regression analysis is required to adjust for any variation resulting from external factors,
such as capacity, type of fuel used and standard of final product.
A minimum of four companies is required for good comparative analysis for energy-
use benchmarking study.
112
Benchmarking Analysis
To maintain anonymosity, the four chipboard companies are coded as WoodtWood2,
Wood3 and Wood4 The final analysis of the e-benchmark tool will consist of scores,
ranking and a brief report for each of the participating company.
In addition, the relationship between the energy consumption and the product produced
was analyzed for Woodr The 2001 SECs were taken as references for deliberation.
Score Results
To illustrate score results, Wood., is taken as example. The analysis of the input data is
shown in figure 4, which is the actual display screen of the e-benchmarking tool. It will
be noticed that only three companies have been taken for analysis out of four. This
may be due to two reasons, namely, either any one of the companies has not provided
any data input or it is an outlier. Outliers meaning that the analyzed data are so apart,
including them may distort the final score for the entire sub-sector community.
In the display example, Wood,'s SEC stands at 1.34 GJ/m3, and it is ranked as "1/3"
means the company's SEC is the minimum out of the three companies analyzed for the
energy-use benchmarking exercise.
Since SEC values are rated as "the lower the better" and so, Wood: qualifies for the
benchmark status in 2001. If data for 2000 were available, Wood1 would be able to find
out its incremental performance for 2001.
The median, upper quartile and lower quartile figures can be used by Wood., to
determine the positive performance gap that exists between itself and the participants
of the community.
Subsequently, the other two participants would have a score of 2/3 or 3/3 among
them. These two companies have the opportunities for improvement in their energy
performances. The upper quartile, lower quartile and median information will provide
how gradually the two other companies should plan the strategy to improve their
energy performance.
For instance, the company with the worst SEC in the community should first bring
down its current SEC from 3.28 GJ/m3 in four stages to the benchmark value of 1.34
GJ/m3. The stages are upper quartile of 2.94 GJ/m3, median of 1.93 GJ/m3, lower quartile
of 1.49 GJ/m3 and finally, the benchmark of 1.34 GJ/m3.
Once this is achieved, the company should not only maintain the current status quo,
but also set new targets for continuous improvement to strive to become a benchmark
among its community.
113
Wofidl
Industrial Energy Efficiency (kamzat&ptm.org my)
Organization Name
Community
Competitive Score for Sp energy cons
Cluster
Food
-Anv- "
Wood
Chipboard "
Rubber
-Any-
Iron & Steel
-Any-
Ceramic
-Any-
Pulp & Paper
-Any-
Cement
-Any-
Glass
-Any-
No. of Respondents (N)
4
Year
2000
Ranking
NA/NA 1/3
2001
v
""
v
v
v
v
21X12
Year
2001
MA/NA
Ranking
1/3
Your Organization
1.34
Your Organ i/ation
Maximum
3.2B
Maximum
Upper Qunrtile
2.9425
Upper Quartile
Median
1.93
Median
Lower Quarlile
1.487S
Minimum
1.34
Trend
Figure 4 Competitive Scores on SEC for Woodj
Ranking Results
For this analysis, Wood 2 is selected to generate the output. Except for the production
quantity all the other indicators should be taken as "lower the better". The comparative
indicator in Wood 2 is displayed in figure 5.
Indicators
Your Value
Benchmark
Value
Ranking
Your
2.
Production Quantity (PQm3)
Def.
83335
110765
4/4
14.
Electricity (GJ)
Def.
120495.6
37255.3
3/3
23.
Natural Gas (NG1)
Def.
153470
150041.6
1/3
27.
SEC2 (SEC2)
Def.
3.28
1.34
2/3
Figure 5 Results of Ranking
Overall Results
The overall display of the report in figure 6 is for the Community Manager's view
only. The display states clearly, who are the members in the minimum, median,
maximum, lower and upper quartiles of the SECs. The same view is also available for
individual participating members except without the information to whom the
indicators belong.
114
Overall Report
Overall meld. Organisations
Overall Scores
Kilter
Period
2IMM V
Indicator
S|j encrgi cons(scc 3)
&?
Number Of Respondents in this Cluster (N) : 4
•"MB.V.SX
Indicators
1. Sp energy tons (sccj)
X
Min
lWouiilH.34
Median
Max
(Wood4,...) 1.93
(Wood!) 3.2S
Lower
Quartiles
(W«uiU) 1.4875
Upper
Quartiles
<Wood2) 2.9425
Figure 6 Overall Results for Selected Indicators
Relationship between Energy Consumption and Production - Linear Regression
Analysis
The monthly SEC data for Wood2 was analyzed manually as shown in Table 3. The
SEC for the electrical and thermal energy is computed separately. These data was then
used to plot a scatter diagram of the:
i.
ii.
Electricity consumption versus production (in figure 7)
Fuel consumption versus production (in figure 8)
The analysis of the above provides an indication of how well the plant is managing its
energy use. It is reveals the inefficiencies in SEC which places Wood2 in the lowest
ranking.
Table 3
SECforWood2
SEC
Quantity of
product
m3
Electricity
[GJ]
Jan
7.610
Duration
( 2001)
Fuel
electrical
fuel
sum
[GJ]
[GJ/m3]
[GJ/m-1!
[GJ/m3]
11,417
15,860
1.50
2.08
3.58
Natural gas: NG
Feb
7,147
10,866
13,336
1.52
1.87
3.39
Mar
7,389
11,016
14,616
1.49
1.98
3.47
Apr
6,384
10,786
11,481
1.69
1.80
3.49
May
6,193
7,432
9,564
1.20
1.54
2.74
Jun
7,445
11,082
12,929
1.49
1.74
3.23
Jul
6,911
10,795
13,303
1.56
1.92
3.49
Aug
6,481
9,716
1 1 ,235
1.50
1.73
3.23
Scp
6,916
11,262
12,137
1.63
1.75
3.38
Oct
7,183
10,843
13,474
1.51
1.88
3.39
Nov
6,165
4,191
13,429
0.68
2.18
2.86
Dec
7,511
11,088
12,105
1.48
1.61
3.09
Sum
83,335
120,496
153,470
1.44
1.84
3.28
115
Relationship between Electricity Consumption and Production
14,000 •
O
c
E
a
o
U
r\
12,000 •
10,000 •
8,000 -
u
L.
6,000 '
5
9
\ *B\
\
\
\ *\
\ B2J
f* )
\t3/
"
**
* ** *
^-^
4,000 • I———r—— B——————1——————1——————1——————1——————I—————1——————1——————t6,000 ^00 6,400 6,600 6,800 7,000 7,200 7,400 7,600 7,800
Production (m3)
Figure 7 Relationship between Electricity Consumption and Production
Rela ionship between Fuel Consumption and Production
20,000 •
Cs 18,000 - -——————————————————————————————
J
16,000 -
"£.
I
14,000 •
E
V 12,000 •
"3
^
+ °r\
(
E
t*
*—————
* * FC\
*
I /
^^
10,000 •
8,000 - ——————— -.————————— ,—
5,500
6,000
6,M)0
- —————.———— ————.————————— r7,000
7,500
8,000
Production (m3)
Figure 8 Relationship between Fuel Consumption and Production
A review of figure 7 shows that for the same production levels, the electrical energy
consumption can be reduced from Al to A2, Bl to B2 and Cl to C2.
A review of figure 8 shows that for the same production levels, the thermal energy
consumption can be reduced at point D and F. Furthermore, point E shows that for the
same amount of thermal energy consumed, the production quantity could be higher.
This shows that the energy performance variations exist in both the electrical and fuel
energy consumptions for the same production levels. Initiating the following energy
saving measures can minimize the variation:
116
i)
ii)
No and low cost measures to eliminate wastages i.e. repair of compressed air
leakages, steam leakages, faulty traps and valves, shutting off idling
equipment, heating and chilling process insulation, and carrying out regular
preventive maintenance
High cost measures that require upgrading of current technology and process
equipment to obtain the lower energy-use per output generated
An energy audit exercise carried out in Wood2 showed that approximately 30 percent
of energy can be saved just by implementing both no and low cost measures.
Analysis of HCI Application in the e-Benchmarking System
The key HCI design features (as explained in section 2.3) were analyzed and tested
against the system. The usability of the system is based on the criteria shown in table 4.
Table 4
Matrix for Evaluating Usability Characteristics
No.
Characterist
1
Under standability
2
Learnability
Metric
Rating
1. 1
Completeness of description
1 .2
1 .3
Evident functions
Function understandability
26
2. 1
5
2.2
Effectiveness of the user documentation and help
systems in use
Help accessibility
3
Operatability
3.1
3.2
Operational consistency in use
Message-understandability in use
13
4
Attractiveness
4. 1
4.2
Attractive interaction
Interface appearance customizability
36
5
Usability compliance
5. 1
Conformance to standards and usability regulations
20
Total
100
Evaluation of the system among its beneficiaries showed 83% favorable.
Constraints of the Project
Quantum of Data for Analysis
There were only four chipboard manufacturers who voluntarily participated in this
project. Even though the project achieved its objectives, the number of participating
companies for benchmarking analysis is not reflective of the actual situation and thus,
the SEC may not be a good representation of the sub-sector.
Issue of Confidentially
The perceived issues of confidentiality associated with allowing production and energy
data available for third party analysis is another main constraint for collecting data for
benchmarking analysis.
117
Recommendation for A Sustainable Energy-Use Benchmarking for Industries
Enhancement of e-Benchmark System
The current system is able to conduct basic comparative analysis on an annual basis.
In order to have a better monitoring and control of energy performance, the frequency
of data collection should be increased to monthly.
In order to have a more competitive assessment, international SEC benchmarks of
similar operation should be included in the system. For continuous improvement,
companies should strive for implementing new technologies and evaluate the same
for determining the performance levels.
Monitoring and Targeting System (M & T)
M&T is a technique that enables a plant to manage and control energy usage. A
monitoring and targeting system has 5 major steps as cited below:
i.
ii.
Measuring the energy consumption over a specified period of time
Relate the energy consumption to a measure of output
iii. Setting targets for reduced consumption
iv. Regularly comparing the actual energy consumption with the targeted
consumption
v.
Taking corrective actions to correct the variance in consumption
The benefits of M&T are as follows:
i.
Energy cost savings
ii.
iii.
iv.
v.
vi.
Improve product costing
Improve budgeting
Better preventive maintenance
Improve product quality
Avoid wastages
M & T systems are widely used in industries abroad and in some countries its
implementation is subsidized by government incentives. The basic M&T system is
equipped with a Data Acquisition System (DAS) and the more advance ones include
on-line data analysis and control systems.
With the M& T system in place, companies will be able to monitor their energy
consumption periodically and take measures to improve their SECs by implementing
energy saving measures. New targets can be set, monitored and achieved. By
continuously monitoring the energy performance, companies will have better control
of their operation for systematic energy management.
118
Model for Continuous Improvement
Since there is no proper structure and protocol available locally and internationally
for energy-use benchmarking, the study proposes a model for continuous improvement
as shown in figure 9.
Benchmarking
Request to association
Energy audit
Preparation for site visit
Road show, meeting
Agreement on sector, subscctor ami
performance Indicators
Formation of work team
Walk-through audit
On-site inspection
Data colled ion
Data collection
Agreement on reporting format
Distribute and collequestiunnaiies
Detail audit
EE Technology
Implementation of EE
technology "best practices"
Monitoring and targeting
Continuous improvement
Compile data/information
prepare energy audit report
Data Analysis
Calculation of benchmarks
Feedback report (best practices,
international benchmarks and
recommendation for improvements)
Dissemination of information
•
•
•
.t*
Share findings
Presentation to host
Recommend improvements
* No cosl
* Lowcost
* Highcost SHffiBHKKHI
Workshop/conference
Share finding of survey
Share best practices among members
.Action plan for continuous improvement
Figure 9 Energy-use Benchmarking Model
Energy-use Benchmarking is part of energy management. The activities outlined under
benchmarking are covered in the study.
The final stage of the project is the dissemination of information from the data collected
and analyzed. The BOND also provides a good repository of information on benchmarks
and best practices. Additional information such as best practices, case studies on
successful energy efficiency technologies and best management practices are also
available on-line.
Here the participating companies will be guided on the follow-up action that would
further help the companies in identifying energy saving measures through an energy
audit. The energy audit is conducted using energy auditing equipment for detailed
measurements. From the energy audit, energy saving measures are identified. These
measure are grouped as "no cost", "low cost" and "high cost" measures according to
the capital investment and payback period of each identified measure.
Implementation of "high cost" measures, also known as best practices or EE Technology
will not only give the companies the cutting edge in the industrial sector but also
significantly improve the SEC to attain the benchmark status.
119
A recent energy audit conducted in the wood sector by the MIEEIP show that the
sector can achieve 62.5 % SEC reduction by implementing the no cost, low cost and
high cost energy saving measures. The trend is graphically shown in figure 10.
Wood Sector
120 j
100-•
,100
, 99.5
86.5
80-'
60"
40"
37.8
20"
0"
Current
No cost
Low cost
High cost
Figure 10 Potential SEC Reduction for the Wood Sector
Conclusion
Sustainable energy management can be achieved if energy related issues are given
equal emphasis. This also calls for the greater integration of planning, social, economic
and environmental considerations. Although aspects of community involvement and
empowerment are not considered for the study, including them will definitely improve
the overall energy-use benchmark exercise.
In the long run, benchmarking on energy-use will help industries adopt appropriate
measures to reduce energy wastage, achieve cost savings and subsequently improve
productivity. This will become highly essential once the energy price starts reflecting
its cost. Industries in developing countries should start introducing energy management
through company policies. This will ensure energy management becoming a company
culture once the regulations come into force when these countries attain developed
status.
Benchmarking is a continuous improvement process where benchmarks are moving
figures changing over time. Thus, an online data collection will add value for the process
to be "managed by facts".
120
PELAKSANAAN PENGURUSAN KUALITI MENYELURUH (TQM) ALA JEPUN
(CWCQ) DAN SUMBANGANNYA: KAJIAN KES DI SYARIKAT INGRESS
ENGINEERING BERHAD
Oleh
Ilhaamie Binti Abdul Ghani Azmi
Akademi Pengajian Islam
University Malaya
Abstrak
Kajian ini bertujuan untuk mengenalpasti prinsip-prinsip pelaksanaan TQM @ CWCQ dan
jenis-jenisfaedah hasil dari pelaksanaannya ke atas sebuah syarikat yang sudah dianggap sebagai
model TQM di rantau ini iaitu Syarikat Ingress Engineering Berhad. Antara prinsip-prinsip
utama TQM ala Jepun yang dikenalpasti dilaksanakan di syarikat ini ialah penyertaan
menyeluruh dan peningkatan bertenisan. TQM dilaksanakan secara menyeluruh oleh semua
pihak di syarikat iaitu pihak pengurusan, pekerja, pelanggan dan pembekal Pusingan Deming,
kumpulan kualiti, kanban, praktis 5S, penandaarasan, dan anugerah TQM merupakan elemenelemen penting peningkatan berterusan dalam pelaksanaan tersebut. Manakala faedah-faedah
yang diperolehi ialah pengurangan dalam masa kitaran, aduan pelanggan dan jumlah kerosakan
serta peningkatan dalam keuntungan bersih, prestasi jualan, penjimatan fcos, produktiviti dan
jumlah pekerjaan. Namun begitu, disebabkan oleh kemelesetan ekonomi yang dialami oleh negara
ini dalam tahun 1998, syarikat tidak dapat mempertahankan prestasinya yang begitu menarik
seperti dalam tahun 1997. Ini menunjukkan terdapat faktor luaran yang dapat member: kesan
ke atas hasil pelaksanaan TQM. Walaubagaimanapun, terdapat dua faktor yang konsisten
iautu pengurangan jumlah kerosakan dan peningkatan kepuasan pelanggan.
Pengenalan
Syarikat Ingress Engineering Berhad memulakan operasinya dalam tahun 1991 dengan
penubuhan syarikat induknya. Pada saat artikel ini ditulis, syarikat ini mempunyai
enam anak syarikat. Syarikat ini terletak di Perindustrian Nilai dan aktiviti-aktiviti
perniagaan utamanya ialah mengeluarkan komponen acuan plastik dan besi pintu
kereta. Tahun 1996 digunakan sebagai dasar perbandingan kerana ia merupakan tahun
pertama TQM dilaksanakan dengan secara komprehensif di syarikat ini. Namun begitu,
data-data yang telah diperolehi adalah agak tidak lengkap kerana mungkin disebabkan
data tersebut merupakan rahsia syarikat.
Penemuan Kajian di Syarikat Ingress Engineering Berhad
Permulaan Kualiti di Syarikat
Daripada penemuan kajian, didapati bahawa syarikat ini sememangnya meletakkan
kualiti sebagai dasar utama perniagaannya. la mula melaksanakan TQM apabila pihak
pengurusan telah menyedari bahawa satu sistem pengurusan kualiti yang berkesan
perlu diamalkan dalam tahun 1993 supaya kedudukan syarikat lebih berdaya-saing
pada masa hadapan. Pada September 1993, TQM dengan rasminya telah dilancarkan
di syarikat ini oleh Pengerusi Eksekutifnya.
121
Syarikat ini juga menyedari kepentingan kualiti sebagai faktor penting untuk
berdayasaing dan bertahan di pasaran di negara ini berbanding dengan parameter
perniagaan yang lain. Kerana itulah, ia telah mendefinasikan TQM, dasar-dasar dan
polisi kualiti, visi dan misi perniagaan dengan begitu terperinci sekali.
Fengertian Istilah Penting Dalam Syarikat
Kualiti
Menurut syarikat ini, kualiti didefinasikan sebagai ciri-ciri produk sebagai satu usaha
untuk sentiasa memenuhi keperluan permintaan pelanggan. Ciri-ciri tersebut adalah
seperti berikut :•
Ketepatan
•
•
Astetik
Tepat (perfect fit)
•
Ketahanan (durability)
•
•
Kekemasan (smooth)
Kelihatan menarik
TQM
Syarikat ini mempunyai dua definasi mengenai TQM. Pertama, TQM adalah satu
sistem amalan yang sering berubah disebabkan oleh keadaan dunia yang sering
berubah. Oleh itu, untuk melaksanakannya alat-alat saintifik dan kaedah-kaedah
latihan diperlukan untuk mengurus syarikat-syarikat. Tujuannya ialah supaya ia dapat
memberi kepuasan kepada pelanggan.
Kedua, TQM merupakan pendekatan pengurusan yang bertujuan untuk mendapatkan
perkembangan yang stabil dengan melibatkan semua ahli supaya kualiti yang
diperlukan oleh pelanggan dapat dihasilkan.
Frinsip TQM yang dipraktikkan
Di dapati syarikat ini juga mengamalkan dua prinsip utama TQM iaitu penyertaan
menyeluruh dan peningkatan berterusan.
Penyertaan Menyeluruh
Pelaksanaan TQM memerlukan komitmen yang menyeluruh daripada semua peringkat
seperti pengurusan atasan, pengurus-pengurus dan pekerja dan lain-lain.
Pihak Pengurusan sebagai Jawatankuasa Pemandu (JKP)
Jawatankuasa ini dipengerusi oleh Pengarah Urusan sendiri. la dianggotai oleh semua
pengurus-pengurus jabatan sebanyak 10 orang. Tiap-tiap ahli mempunyai peranan
dan tugas masing-masing bagi mempastikan pelaksanaan TQM berjalan dengan
berkesan. JKP mempunyai agenda bulanan yang tetap untuk dibincangkan dalam
mesyuarat. Di antara agenda yang dibincangkan ialah :-
122
•
Perkembangan program peningkatan kualiti seperti Kumpulan Mutu Kerja/ KMK/
QCC (QuaUty Control Circle), 5S, Penandaarasan, ISO 9000 dan Kaizen.
•
Lain-lain agenda pengurusan.
Pihak pengurusan mempunyai falsafah tersendiri mengenai kenapa TQM perlu
diamalkan dan mereka percaya tiada jalan mudah untuk mencapal kecemerlangan.
Antara falsafah-falsafah tersebut ialah :• Peningkatan kualiti adalah tugas individu.
• Pekerja yang membuat sesuatu kerja itu lebih mengetahui cara yang terbaik untuk
melakukannya.
• Kualiti memerlukan semangat kerja berpasukan di kalangan pekerja.
Morning Market
Perjumpaan ini diadakan oleh setiap Pengurus Jabatan dengan Penolong Pengurus
dan Penyelia masing-masing pada setiap hari daripada pukul 9.30 pagi hingga 10.30
pagi. Dalam perjumpaan tersebut, perkara yang akan disampaikan ialah:
•
•
•
•
Laporan daripada penyelia mengenai pencapaian semalam
Sasaran pengeluaran
Pencapaian program kualiti
Menyelesaikan masalah (jika ada)
Jabatan TQM
Atas kesedaran syarikat mengenai kepentingan TQM, satu Jabatan khas telah
dibangunkan iaitu Jabatan TQM atau dikenali sebagai Jabatan Jaminan Kualiti/ Quality
Assurance (QA). Jabatan ini memainkan peranan dalam mengkoordinasikan aktivitiaktiviti bersangkutan dengan pelaksanaan TQM. Sebagai garis panduan dalam
pelaksanaan TQM, Jabatan ini menggunakan 19 buku panduan TQM yang didapati
daripada pakar TQM Jepun. Buku-buku tersebut adalah mengenai:Ketua Pengawai Eksekutif
Pengurus
Pekerja
Pengurusan Polisi
Piawaian
Pengurusan Harian
KMK (QCC)
Penyelesaian Masalah
Kaedah Statistik
Kawalan Keselamatan
Kawalan Proses
Peralatan dan Kemudahan Pengurusan
Kawalan Pengukuran
Pemeriksaan
Pembelajaran dan Latihan
Pembekal dan Pembelian
123
•
•
Kawalan Pengeluaran
Jadual Pembuangan
•
Persekitaran dan Kebersihan
Pekerja
Pekerja-pekerja di syaiikat ini memainkan peranan penting dalam memastikan objektif
syarikat iaitu peningkatan kualiti dapat dicapai. Jika terdapat masalah yang perlu
diatasi dengan segera, mereka boleh mengadakan mesyuarat tergempar bagi mencari
penyelesaian tersebut. Mereka boleh menyelesaikan masalah tanpa menunggu arahan
dari atas. Keadaan ini melatih mereka lebih bertanggungjawab terhadap kerja yang
diberikan. Mereka juga diberi kuasa untuk membangunkan prosedur baru tetapi hanya
berkaitan dengan skop pekerjaan mereka bagi memastikan prosedur dapat
diseragamkan.
Pelanggan
Pelanggan syarikat ini terdiri daripada Proton, Perodua, Ford/Madza (Thailand),
Mitsubishi (Thailand) dan General Motors (Thailand). Setiap tahun, mereka akan
mengaudit komponen keluaran syarikat ini dengan tujuan untuk memastikan syarikat
ini menepati kehendak ISO 9000. Pelanggan boleh membuat aduan sekiranya mereka
tidak berpuas hati dengan Syarikat Ingress Engineering Berhad. Aduan itu dikenali
sebagai 'Complaint Status'. Terdapat dua jenis aduan iaitu DCRS (Defect Counter Measure
Report) yang merupakan laporan yang digunakan oleh Proton untuk melaporkan
mengenai jenis item dan bahagian mana yang mengalami kerosakan. Sebaliknya,
Perodua menggunakan borang yang dikenali sebagai QPCR (Quality Problem Counter
Measure Report). Pada asasnya, kedua-dua aduan ini adalah sama sahaja supaya Syarikat
dapat menepati syarat-syarat yang terdapat dalam ISO 9000.
Pembekal
Syarikat ini mempunyai sembilan pembekal. Tiga syarikat yang paling utama ialah
Semi Puteh, Metal Formers dan Polimer Resources Sdn. Bhd. Syarikat-syarikat ini
akan menghantar bahan mentah seperti PVC, gulungan besi (metal coil) dan sebagainya
kepada syarikat setiap bulan. Syarikat Ingress Engineering Berhad akan mengaudit
pembekal ini setiap tahun untuk memastikan sama ada mereka menepati ISO 9000
atau tidak dari empat aspek penting iaitu kualiti, kos, penghantaran dan keselamatan.
la juga mempunyai skedul yang telah ditetapkan dan kertas semakan bagi mengaudit
pembekal-pembekal tersebut.
Peningkatan Berterusan
Syarikat ini juga melaksanakan peningkatan berterusan yang menekankan kepada
peningkatan proses atau lebih dikenali sebagai kaizen.
Peningkatan Proses/Kaizen
Terdapat 3 jenis kaizen di syarikat ini iaitu Jabatan Kaizen, kumpulan kaizen, dan
cadangan Kaizen. Jabatan Kaizen merupakan sub-jabatan dan ditubuhkan dalam tahun
1995. la mempunyai wakil daripada setiap anak syarikat. Tujuan penubuhan Jabatan
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ini ialah untuk mempertingkatkan lagi dan mengubahsuai model produk agar dapat
diterima oleh proses pengeluaran syarikat.
Kumpulan kaizen adalah kumpulan yang terdiri daripada pekerja-pekerja. Setiap
jabatan akan rnemilih kumpulan kaizen yang terbaik dan kumpulan-kumpulan tersebut
akan saling berentap antara satu sama lain. Pemenang akan mendapat gelaran
kumpulan Kaizen terbaik untuk tahun tersebut. Mereka juga akan menerima saguhati
sebanyak $750, medal pusingan dan sijil penghargaan. Di tempat kerja juga, papantanda
Kaizen akan diletakkan bagi memberi penghargaan kepada pemenang. Papan tanda
ini mengandungi nama pemenang berserta tarikh cadangannya dilaksanakan.
Bagi cadangan Kaizen, pekerja diberi $1.00 sebagai saguhati terhadap cadangan yang
diberikan. Dari tahun 1996 hingga 1998, didapati cadangan yang diterima meningkat
dari 0.5% kepada 3.5%. Manakala dalam tahun 1999 sahaja, sebanyak 1,490 cadangan
diterima di mana sebanyak 378 cadangan sedang dilaksanakan dan 182 cadangan yang
sudah dilaksanakan dan 111 cadangan yang tidak dapat dilaksanakan kerana didapati
tidak munasabah. Sementara itu, sebanyak 819 cadangan masih di dalam semakan
pihak pengurusan.
Selain daripada itu, terdapat 4 aktiviti peningkatan kaizen yang diamalkan oleh Syarikat
ini iaitu mesin, proses, kos bahan mentah dan penggunaan alat-alatan seperti jit, alatalatan dan dies. Berikut adalah anggaran penjimatan kos daripada setiap aktiviti ini
iaitu: Jadual 1
Penjimatan Kos bagi Setiap Aktiviti Kaizen
Bil.
Aktiviti Kaizen
Penjimatan Kos (setahun)
1
Peningkatan mesin
$136,000
2
Peningkatan proses
$11,000
3
Pengurangan bahan mentah
$120,000
4
Penggunaan alat-alatan
$253,000
Jumlah
$520,000
Sumber: Syarikat Ingress Engineering Berhad
Jadi, secara keseluruhannya, dianggarkan syarikat telah dapat menjimatkan sebanyak
$520,000 setahun daripada aktiviti-aktiviti ini sahaja.
Syarikat ini juga menggunakan SPC(Statistical Processing Control) bagi mengawal
kualiti produknya. SPC mula digunakan dalam pertengahan tahun 1997 setelah pihak
pengurusan menerima arahan daripada Pengarah Urusannya untuk mengawal dan
mempelajari proses-proses pengeluaran di syarikat ini. la digunakan di peringkat
eksekutif di Jabatan Kualiti/ TQM di mana mereka mempunyai latarbelakang dalam
bidang kejuruteraan. Jurutera-jurutera ini ditugaskan untuk menganalisa data dan
mendapat maklumbalas daripada data tersebut. Sementara itu, operator berperanan
untuk mengumpul data-data sesuatu proses pengeluaran.
125
Kumpulan Mutu Kerja/KMK (Quality Control Circle/QCC]
Syarikat ini telah mengamalkan QCC sejak lima tahun lalu dan ia bukan sahaja
melibatkan operator tetapi juga eksekutif yang dikenali sebagai Aktiviti Kumpulan
Eksekutif atau EGA (Executive Group Association). Kumpulan ini diketuai oleh Pengurus
atau Pengurus Besar atau Pengurus Urusan Kumpulan bergantung kepada jenis projek
dan ahlinya terdiri daripada Eksekutif atau Penolong Pengurus atau Pengurus. Projekprojek yang dihasilkan oleh kumpulan ini melibatkan kepentingan daripada jabatan
yang berlainan (Cross Functional Team). Semua isu atau masalah yang berkaitan dengan
program peningkatan kualiti akan dibincangkan di dalam mesyuarat yang diadakan
dua kali sebulan iaitu pada hari Rabu jam 4.30 hingga 5.30 petang. Ada setengah
daripada isu yang timbul itu memerlukan koordinasi di antara jabatan-jabatan yang
berlainan. Oleh itu, melalui perbincangan ini, masalah tersebut boleh di atasi dengan
mendapatkan kerjasama dan sokongan daripada semua jabatan yang terlibat.
Kumpulan kedua adalah terdiri daripada operator dan diketuai oleh penyelia. la
dikenali sebagai Pasukan Peningkatan Kualiti (Work Improvement Team/WlT). Terdapat
lapan belas kumpulan yang aktif menjalankan projek peningkatan kualiti. Kumpulankumpulan ini akan berjumpa dua kali sebulan selama satu jam iaitu dalam waktu
kerja pada hari Jumaat. Setiap penyelia kumpulan akan mempastikan mesyuarat ini
berjalan mengikut jadual. Di antara perkara yang dibincangkan ialah mengenai aktiviti
harian atau proses ke arah:•
•
•
•
Penjagaan kualiti produk
Penjimatan tenaga/kos
Mengelakkan daripada kesilapan (error), kecacatan (defect) dan kerosakan (reject)
Penjagaan kebersihan
• Peningkatan program kualiti seperti QCC, 5S dan lain lain.
Kumpulan ini dikehendaki mencatat atau merekod hasil perbincangan tersebut
termasuk juga kaedah penyelesaian masalah yang dipersetujui semasa perbincangan.
Tindakan pembetulan harus diambil mengikut apa yang telah ditetapkan.
Syarikat ini juga menggunakan ketujuh-tujuh alat kawalan kualiti dalam usaha untuk
meningkatkan projek. Dengan menggunakan alat-alat di atas, kumpulan-kumpulan
KMK akan dapat mencari punca masalah dan merancang untuk mengambil tindakan
pembetulan. Kumpulan eksekutif akan lebih menekankan kepada penggunaan SPC
bagi menganalisa proses pengeluaran. Mengenali punca masalah dan kaedah
penyelesaian biasanya dilakukan dengan menggunakan 5 soalan Wh iaitu why, what,
how, when dan who? Setelah memperolehi maklumat dan data, kumpulan-kumpulan
akan merancang untuk menyelesaikan masalah dengan mengunakan teknik PDGV
pusingan Deming.
Kumpulan KMK akan membuat persembahan masing-masing dalam Majlis
Konvensyen QCC di NPC (National Productivity Centre) di mana kumpulan yang
berjaya akan mendapat sijil dan trofi sebagai tanda penghargaan dan pengiktirafan.
126
Selain daripada konvensyen QCC yang diadakan pada setiap tahun, syarikat juga
mengadakan majlis tahunan kualiti. Dalam majlis ini, pekerja-pekerja akan diberikan
penerangan dan kefahaman mengenai visi, misi dan dasar kualiti perniagaan syarikat
dan aktiviti-aktiviti yang dijalankan adalah seperti berikut :* Ceramah kualiti
• Bengkel kualiti dan produktiviti
Penyampaian hadiah dan penghargaan juga akan diberikan kepada kumpulan atau
individu yang berjaya meningkatkan kualiti syarikat.
'Kanban'
Sistem kanban di syarikat ini menggunakan prinsip FIFO (First In First Out). Ini
bermakna, bahan mentah pertama akan keluar dahulu sebagai komponen pertama.
Syarikat ini juga menggunakan sistem kad 'kanban' bagi menunjukkan sama ada stok
sudah habis atau belum dan perlu diganti (warna merah) atau menukarkan proses
pengeluaran menjadi lebih pendek (warna kuning). Ini dilakukan apabila proses
pengeluaran adalah cepat dan stok makin berkurangan.
Syarikat ini juga menggunakan sistem pengawalan visual bagi mengawal stok. Ini
adalah berdasarkan kepada masa anjal dan jumlah penggunaan. Lori akan siap
menunggu untuk menghantar komponen-komponen tersebut kepada pelanggan. Hasil
daripada pengamalan sistem 'Kanban'nya, syarikat telah mendapat anugerah daripada
Perodua kerana Perodua tidak lagi perlu memeriksa komponen yang dihasilkan oleh
syarikat ini. Dalam tahun 1996, Proton juga telah menganugerah Syarikat Ingress
Engineering Berhad penghargaan sebagai pembekal yang terbaik untuk tahun tersebut.
Amalan 5S (seiri, seiton, seiso, seiketsu, shitsuke)
Syarikat ini telah mendapat khidmat bantuan teknikal dari Katayama Jepun untuk
membantu pelaksanaan amalan 5S. Seorang penasihat Jepun telah ditugaskan di
syarikat ini sejak tahun 1993 hingga sekarang. Hasil daripada program ini, pengurusan
syarikat amat berpuashati tentang pencapaian dan hasil yang diperolehinya dan
pelaksanaannya akan terus dikekalkan. Bagi mendorong pekerja terus mengamalkan
aktiviti ini, maka pengurusan Syarikat telah bersetuju untuk memilih kumpulan 5S
yang terbaik pada tiap-tiap bulan. Mereka yang berjaya akan diberi hadiah berbentuk
wang dan sijil penghargaan.
Penandaarasan
Dalam kes ini, Syarikat Ingress Engineering Berhad telah menjadikan Katayama Kogyo
of Japan sebagai tandaaras mereka. Kaedah dan teknik pengeluaran daripada Syarikat
Katayama telah dijadikan contoh dan disesuaikan dengan kaedah yang dilaksanakan
di syarikat ini.
127
Hasil daripada program tersebut, syarikat ini dapat memperbaiki tahap kecekapan
pengeluaran dengan lebih baik lagi berbanding dengan pencapaian syarikat Katayama.
Program ini sangat berfaedah kerana dapat meningkatkan kecekapan dan produktiviti
syarikat.
ISO 9000
Syarikat Ingress Engineering Berhad juga cuba menepati dan melampaui (exceed)
prinsip-prinsip ISO 9000 dan ini dikatakan sebagai TQM. Ini adalah kerana ISO 9000
cuma merupakan permintaan asas pelanggan. Sekiranya syarikat dapat menepati dan
melampaui permintaan pelanggan, hasilnya ialah pelanggan tersebut akan berpuas
hati dan menjadi setia kepada syarikat tersebut.
Anugerah TQM
Syarikat ini telah memenangi anugerah seperti 'Winner for the Most Improved Vendor
Award' dalam tahun 1996, MS ISO 9002, Anugerah Emas QCC, Anugerah Perak QCC,
Anugerah Perak QCC, Anugerah Pelanggan Paling Berjaya dan Anugerah Penghargaan
Model TQM, kesemuanya dalam tahun 1997.
Faedah-faedah Yang Diperolehi
Faedah Nampak
Antara faedah-faedah nampak yang telah diperolehi oleh Syarikat Ingress Engineering
Berhad iaitu hasil daripada pelaksanaan prinsip-prinsip TQM ala Jepun, boleh
dirumuskan di dalam Jadual 3 di bawah :Tahun 1997
Dalam tahun 1997, syarikat mengalami peningkatan yang agak mendadak daripada
tahun sebelumnya. Ini adalah disebabkan oleh kecemerlangan ekonomi pada tahun
tersebut. Faedah-faedah yang diperolehi hasil langsung daripada pelaksanaan TQM
ialah peningkatan dalam persembahan jualan, jumlah pekerjaan, keuntungan bersih,
produktiviti dan penjimatan kos serta pengurangan dalam jumlah kerosakan. Namun
begitu, syarikat mencatat jumlah aduan pelanggan yang tertinggi iaitu sebanyak 14
aduan. Ini adalah disebabkan oleh syarikat ini memperkenalkan banyak produk baru
dalam tahun tersebut. Jumlah pusingganti pekerja juga meningkat kerana pekerja
menjadikan syarikat ini sebagai batu loncatan untuk mendapatkan tawaran yang lebih
baik di syarikat lain.
128
Jadual 2
Faedah-faedah daripada Pelaksanaan TQM di Syarikat Ingress Engineering Berhad
Item
1996
1997
1998
1999
Fersembahan Jualan (jut a)
17.8
48
15
43.4
Jumlah Pekerjaan
250
350
275
510
Keuntungan Bersih (juta)
1.6
10.5
-3.5
4.5
Peratusan Kerosakan (purata)
5%
3.5%
1.1%
0.7%
Jumlah Aduan Pelanggan
12.1
14.2
3
1
Produktiviti
12.1
14.2
12.5
14
Masa Kitaran (purata)
NA.
NA.
NA.
35%
Pusingganti Pekerja
NA.
Meningkat
Menurun
Menurun
sebanyak
5%
Penjimatan Kos (juta)
1.8
3.2
2.8
NA.
Pengunaan Mesin (purata)
70%
NA
NA
110%
B,
Sumber : Syarikat Ingress Engineering Berhad
Tahun 1998
Dalam tahun ini, jumlah jualan, pekerjaan, keuntungan bersih dan produktiviti didapati
menurun berbanding dengan tahun 1996 dan 1997. Ini bermakna trend persembahan
untuk item-item tersebut tidak meningkat secara berterusan disebabkan syarikat ini
telah mengalami kesan kemelesetan ekonomi yang agak hebat dalam tahun tersebut.
Namun begitu, ia tidak mengadakan polisi pembuangan pekerja. Sebaliknya, ia
mengurangkan kos pengeluaran dengan tidak mengadakan pekerjaan lebih masa. Oleh
itu, terdapat peningkatan dalam penjimatan kos. Namun begitu, jumlah pusingganti
menurun kerana pekerja tidak berani untuk mencari pekerjaan di tempat lain. Pada
masa yang sama, masih terdapat pengurangan dalam jumlah kerosakan dan jumlah
aduan pelanggan.
Tahun 1999
Dalam tahun ini, ekonomi negara mula pulih secara perlahan. Jesteru, jumlah jualan,
pekerjaan, keuntungan bersih dan produktiviti meningkat. Mesin-mesin pengeluaran
digunakan 110% bagi memenuhi pemintaan yang telah terbantut sebelumnya. Oleh
kerana itu, pusingganti pekerja semakin berkurangan sebanyak 5%. Pada masa yang
sama, aduan pelanggan dan peratusan kerosakan menurun. Pengkaji juga diberitahu
bahawa penjimatan kos meningkat dan masa kitaran mengurang lagi dalam tahun ini
tetapi syarikat tidak dapat memberi angka yang tepat.
129
Daripada persembahan data syarikat ini, dapat dibuat kesimpulan bahawa daripada
pelaksanaan TQM, syarikat telah memperolehi faedah-faedah secara konsisten iaitu
pengurangan dalam kerosakan dan aduan pelanggan (tanpa mengambil kira tahun
1997 kerana banyak produk diperkenalkan dalam tahun tersebut). Walaupun syarikat
tidak dapat memberi maklumat lengkap mengenai masa kitaran kerana ia merupakan
rahsia sulit syarikat, namun begitu, syarikat dapat mempastikan bahawa masa kitaran
berkurangan dari tahun ke tahun. Masa kitaran adalah hasil pencampuran masa
perjalanan proses dengan masa pengendalian (mengalih dan mengangkat barang) dan
masa mesin. Syarikat hanya dapat memberi satu contoh iaitu pengurangan sebanyak
0.441 minit bagi setiap keping komponen produk.
Faktor-faktor lain tidak dapat ditentukan disebabkan oleh perbezaan keadaan ekonomi
dalam tahun-tahun perbandingan. Namun begitu, jika dibandingkan tahun 1996 dan
1997 kesan kemelesetan ekonomi masih belum dirasai, didapati terdapat peningkatan
dalam jualan, keuntungan bersih, pekerjaan, penjimatan kos dan produktiviti dan
pengurangan dalam peratusan kerosakan.
Faedah Tak Nampak
Setakat ini, syarikat telah memenangi banyak anugerah kerana kecemerlangan dalam
melaksanakan TQM. Hasilnya, ia menjadi model TQM untuk peringkat industri
pertengahan di negara ini.
Syarikat ini juga merupakan jawatankuasa untuk mempromosi TQM di seluruh
Malaysia bagi generasi kedua dan keseluruhannya. Fengurus dan Penolong Pengurus
Jabatan Kualiti/TQM ini dikira sebagai pakar TQM di negara ini. Ini menyebabkan
syarikat-syarikat lain datang melawat syarikat ini untuk mempelajari prinsip-prinsip
TQM yang diamalkannya.
Selain daripada itu, faedah-faedah lain yang diperolehi ialah: Dari Sudut Pekerja
Program kaizen, QCC dan amalan 5S telah memberi kesedaran kepada pekerja bahawa
sumbangan dan peranan mereka sangat diperlukan oleh syarikat. Tahap motivasi
pekerja telah meningkat kerana faktor-faktor berikut:•
Suasana kerja yang menyeronokkan.
•
Tempat kerja yang bersih dan kemas.
•
Banyak insentif telah disediakan seperti galakan memberi cadangan Kaizan, elaun
•
makan atau kerja lebih masa, pertandingan kebersihan, anugerah dan
penghargaan, latihan dalaman termasuk teknikal dan bukan teknikal dan pekerja
mempunyai kuasa dalam bidang masing-masing untuk melaksanakan
peningkatan.
Kepimpinan syarikat yang lebih terbuka dan dinamik.
130
Dari Sudut Syarikat
Pihak pengurusan syarikat juga telah mendapati faedah-faedah daripada pelaksanaan
TQM iaitu:•
Setiap kumpulan pekerja berusaha untuk mencapai sasaran pengeluaran harian.
•
Amalan 5S dapat membentuk sikap dan tabiat pekerja menjadi positif dan telah
dapat mengurangkan pelbagai pembaziran di tempat kerja. Antaranya ialah
masa, bahan, pengerakan pekerja, kerosakan, kesilapan dan latn-lain yang mana
telah mengurangkan kos pengeluaran syarikat.
Pekerja lebih bertanggungjawab terhadap kerja kerana terdapatnya perasaan
yang dikatakan sebagai selfbelongingness.
Syarikat semakin berkembang dan mampu bersaing dalam pasaran global.
•
•
Kesimpulan
Daripada kajian yang dijalankan ke atas sebuah syarikat yang sudah menjadi model
TQM di rantau ini, terbukti bahawa daripada pelaksanaan TQM ala Jepun, syarikat
telah memperolehi banyak faedah-faedah sama ada nampak atau tidak. Namun begitu,
disebabkan kemelesetan ekonomi yang telah dihadapi oleh negara, faedah-faedah
nampak yang konsisten dapat dikenalpastikan ialah pengurangan dalam jumlah
kerosakan dan aduan pelanggan. Ini bermakna, dengan pelaksanaan prinsip-prinsip
dan elemen-elemen TQM, syarikat berjaya untuk mengekalkan dalam mengurangkan
kerosakan dan kepuasan pelanggan meningkat. Sementara itu, banyak faedah tidak
nampak yang telah diperolehinya seperti peningkatan imej syarikat dan motivasi
pekerja. Oleh itu, dengan melaksanakan TQM, sesebuah organisasi sama ada
bermatlamatkan keuntungan atau tidak, pasti akan memperolehi faedah-faedah yang
disasarkannya.
Rujukan
Aktiviti dan Fencapaian Kumpulan Kawalan Mutu (KKM) di Kumpulan Syarikat
Ingress (Model Syarikat TQM). (1998) QCC Annual, ms. 85
Quality Management by Small Manufacturer in Korea, An Exploratory Study. (1998).
Journal of Small Business Management, ms. 61
Adam, E. E. (1995) Production of Operations Management, Models and Behaviour. London.
Prentice Hall Inc.
Ashokk, K. (1996). Doing It Right The Second Time. Industrial Management and Data
Systems. 6(96). ms. 14
B. Miles, M & Huberman, A. M. (1984) Qualitative Data Analysis, A Source Book of New
Methods. Carlifornia. Sage Publications.
Barker, R.L. (1990) SPC and TQM. Total Quality Management. 2(1). ms. 183
Buku Laporan Syarikat Kumpulan Ingress (1997)
E. Ross, J. (1994) Total Quality Management, Text, Cases and Readings. Edisi ke 2. London.
Kogan Page Limited.
George, S. & Weimeiskirch, A. (1998) Total Quality Management, Strategies Techniques
Proven at Today's Most Successful Companies. New York. John Wiley & Sons Inc.
131
Heng S. K. (1998). Pelaksanaan TQM Gaya Jepun Meningkatkan Prestasi Perniagaan.
Kajian Kes : Kamaya Electric (M) Sdn. Bhd. Tesis Sarjana Pengurusan Perniagaan
UKM.
Hosotani Katsuya (1995) Tujuh Alat untuk Kawalan Kualiti, Tutorial Bagi Teknik-teknik
QC. Kuala Lumpur. Perbadanan Produktiviti Negara dan Ikeda Shinichi &
Associates Sdn. Bhd.
Ilhaamie A. G. A. (1999) Pelaksanaan TQM ala Jepun (CWCQ) dan sumbangannya.
Satu kajian kes di Syarikat Ingress Engineering Berhad. Tesis Sarjana Pengurusan
Perniagaan UKM.
J. Laabs, J. (1998) Quality Drivers: Trident Is The Little Company That Could. Workforce.
ms 46.
Johnston, R. & Camill, G. (1994). Statistical Process Control Enhances Total Quality
Management. Appliance Manufacturer. 11(42). ms. 54.
K. Ho, S. (1995). Total Quality Management An Integrated Approach, Implementing Total
Quality Through Japanese 5S and ISO 9000. London. Kogan Page Limited.
Kristensen, Dahlgaard, }, K. Kanji, Gopal, (1998) fundamentals of Total Quality
Management, Process Analysis and Improvement. Blackpool. Chapman & Hall.
L. Ahire, S. & Y. Golhar, D. (1996) Quality Management in Large vs Small Firms, An
Empirical Investigation. Journal of Small Business Management.
L. Flood, R. (1993) Beyond Total Quality Management. New York. John Wiley & Sons.
Logothetis, N. (1992) .Managing for Total Quality, from Deming to Taguchi and SPC.
London. Prentice Hall.
N. Weaver, C. (1995) Managing The Four Stages of Total Quality Management, How To
Achieve World Class Performance. Kuala Lumpur. Syarikat First Agency.
Malaysian TQM Casebook Series No. 2, NPC. (Ogos 1997)
O'Con, R.(1997) A Brief Introduction to Statistical Process Control. Tech Directions.
3(57). ms. 38
R. Skrabee, Q. (1994) Integrating Quality Control and Inspection into Total Quality
Management. Total Quality Management. 5(5). ms. 321
R.Temev, A. & J. De Toro (1992) Total Quality Management. Massachusetts. Addison
Wesley Publishing Co.
S. Rusell, R. & W. Tayer, B. (1998) Operations Production on Quality and Competitiveness.
London. Prentice Hall Inc.
Sarmila M.S. (1998) Kos Kualiti, Satu Kajian di Syarikat Ingress Engineering Bhd. Tesis
Sarjana Pengurusan Perniagaan UKM.
Ton Van Der Wiele & Brown, A. Venturing Down The Total Quality Management
Path for SME's. International Small Business Journal. 2(6). ms. 50
Weiss, W. H. (1997) Promoting Quality through Training and Employee Performance.
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132

SBil: 20,Jun 2001 PKRBADANAN PRODUKTIVITI NEGARA ISSN

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