[Suara TEEAM 78th Issue] Machinery & Equipment Productivity Nexus: Enabler for Industry Productivity and Sustainability

Suara TEEAM 78th Issue

The Machinery and Equipment (M&E) subsector is an enabler for the economic progress of all other subsectors and has been of strategic importance throughout the global industrial revolution. It is one of the most innovative economic subsectors as it combines key technologies of the future such as electronics, robotics and software integration. All in all, the subsector is a key player in IR4.0, as it cuts across all economic segments, especially the primary manufacturing and services sectors.

In Malaysia, the M&E subsector is dominated by locally-owned SMEs who mainly produce in small batches (instead of mass production) and provide customised solutions for bigger manufacturers. A large portion of these SMEs are largely risk averse and tend to stick to traditional methods of business management, which does little to contribute to the productivity of the subsector in today’s business environment. This needs to be challenged as more developed nations are becoming increasingly competitive by adopting new technologies and business methods.

M&E is typically a labour-intensive subsector, where the workforce needs to be equipped with both technical and management skills so that they can truly understand the intricacies of the processes involved. With the increase of automation in the subsector, SMEs will require fewer workers to produce the same output, with better control and fewer defects. Upskilling the local M&E workforce will increase their income, raise the subsector’s productivity levels and reduce the nation’s dependence on low-skilled labour. In 2018, the subsector recorded significant productivity growth at 1.1% as compared to -1.0% in 2017.

To uplift productivity, the Malaysia Productivity Blueprint (MPB) has identified three (3) broad challenges that need to be addressed at sectoral level with regards to MPB pillars namely, workforce, technology and industry structure. The MPB initially identified four (4) M&E sectoral initiatives to boost productivity from large enterprises and SMEs, which led to the establishment of M&E Productivity Nexus (MEPN).

MEPN is led by Mr. Mac Ngan Boon, President of Machinery and Engineering Industries Federation (MEIF). This nexus aims to address Machinery and Equipment sector productivity challenges through implementation of four following initiatives:

1.         Set up partnership between government and industry associations to up-skill existing employees;

2.         Set up Centres of Excellence for skilled professionals to share industry expertise and develop new technologies;

3.         Update domestic product standards to be at par with international standards and enforce compliance; and

4.         Set up more product testing facilities to ensure standards are met.

The Nexus has set up 4 workgroups to plan, monitor and execute the projects under these 4 initiatives. Leaders and Subject Matter Experts have been appointed in each of the workgroup to advise, recommend and support the champion based on their expertise in projects implementation to expedite the implementation of the 14 outlined projects (Figure 1 and Figure 2).

Figure 1: The Machinery & Equipment Productivity Nexus is spearheaded by Industry Associations to raise the Productivity of the sector