Operation Management (OPM 770)

Introduction Malaysias manufacturing industry has been growth since the early 1980s when the country witnessed a transition from being an agricultural economy to the industrial-based. The huge economic transition was undertaken based on the realization that the country needed to be less dependent on imports to ensure the nations economic success. The manufacturing industry continues to develop rapidly and has since become an important channel to the countrys economic growth. Manufacturing can be divided into several sub-sector such as electric and electronic, petroleum, chemical, rubber and plastic product, motor vehicle, wood, furniture and textile. Besides that, Malaysia also focuses on services sector. These services sector assumes can be increase share of GDP as an evident of developed countries. As Malaysia moves towards becoming a developed nation, greater emphasis should be targeted on the development of the services sector to serve as the engine of growth and sustain the economy. Wholesale, finance and insurance, real estate, transport and storage, communication, utilities, accommodation and restaurant are the example of sub-sector in this services area.

Below are the examples of companies in each sub-sector in Malaysia: Manufacturing Sector Rubber Products Motor Vehicles Companies 1. Hartalega Sdn. Bhd 2. Southern Latex Products Sdn. Bhd. 3. Ansell Malaysia Sdn Bhd 1. DRB Hicom Berhad 2. Perusahaan Otomobil Nasional (PROTON) 3. Perusahaan Otomobil Kedua Sendirian Berhad (PERODUA) 1. Malaysian Olefins Sdn Bhd 2. Alwira Jaya Sdn Bhd 3. Hi-Pak Manufacturing Sdn Bhd 1. Haier Electrical Appliances (Malaysia) Sdn Bhd 2. Panasonics Malaysia Sdn Bhd 3. Pensonic Sdn Bhd
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Plastic Products Consumer Electronics

Services Sector Hotel and Hospitality Finance and Insurance Communication Transportation and Storage

Companies 1. Seri Malaysia 2. Crown Plaza Hotel 3. Hotel Maya 1. Malayan Banking Berhad 2. MAA Takaful Bhd 3. Kurnia Insurans Malaysia Berhad 1. Telekom Enterprise Sdn Bhd 2. DiGi Telecommunications Sdn. Bhd 3. Maxis Communications Berhad 1. Kasenimas Logistic Sdn Bhd 2. Aerosupplies Partners Sdn Bhd 3. Syarikat Prasarana Negara Bhd

These two major sectors give a significant effect to Gross Product Domestic (GDP) in Malaysia. According to Vengedasalam and Madhavan (2007), GDP is the total money value of the all final goods and services produced within a country in a given time period. GDP of manufacturing and services sector will be explain in the table below:

Table 1 :

Year/ Sector Manufacturing Services

2008 153,078 (1.2) 293,072 (7.6)

2009 138,784 (-9.3) 302,045 (3.1)

2010 154,640 (11.4) 322,611 (6.8)

2011 161,663 (4.5) 343,376 (6.4)

Source: Department of Statistics and Ministry of Finance

Graph above shows the percentage of Gross Domestic Product (GDP) for the manufacturing and services sector in Malaysia for the year 2008 until 2011. GDP consist following economic activity; agriculture, manufacturing, construing, services, mining and quarrying.

These two sectors also have a different rate of employability in industry. Employability in manufacturing and services sector will explain further in table and graph below:

Table 2: Year Labor Force (000) Employment (000) Unemployment Rate (%) Manufacturing Services: -Finance, Insurance, Real 2007 11,775.1 (2.0) 11,398.0 (2.1) 3.2 3,296.7 (2.2) 789.7 (2.9) 2008 11,967.5 (1.6) 11,576.5 (1.6) 3.3 2009 12,083.4 (1.0) 11,632.1 (0.5) 3.7 2010 12,361.3 (2.3) 11,937.1 (2.6) 3.4 3,381.7 (5.4) 839.3 (1.7) 2011 12,645.7 (2.3) 12,226.7 (2.4) 3.3 3,533.1 (4.5) 854.4 (1.8)

Employment by Sector 3,338.3 3,209.9 (1.3) (-3.8) 811.9 (2.8)

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825.6 (1.7)

1,174.8 1122.7 1,247.9 (1.9) (-4.4) (11.2) 3,286.7 3,438.3 3,477.5 -Other Services (3.5) (4.6) (1.1) Source: Economic Planning Unit and Ministry of Human Resource

Estate & Business Services -Transport, Storage & Communication -Government Services

660.0 (2.1)

673.2 (2.0)

675.5 (0.3)

683.4 (1.2) 1249.5 (0.1) 3,584.8 (3.1)

704.2 (3.1) 1,251.8 (0.2) 3,682.2 (2.7)

Table 2 shows percentage of Employment Rate for the manufacturing and services sector in Malaysia for the year 2007 until 2011. This rate was taken for percentage of people actively worked from group age of 15 to 64 year old.

From the graph above, we can see that services sector is more employable compared to manufacturing sector. In the year of 2007, services sector was able to supply as much as 51.86% of job opportunity followed with little increment in 2008 which is 52.23%. As we can see, employment rate of service sector increase as much as 1.24% in 2009. Even though the rate was decline in 2010 and 2011 but the percentage of the employability in this sector has slightly different with percentage in 5 years back.
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On the other hand, manufacturing sector was only have 28.92% of employability rate and this figure decreasing in the year of 2008 and 2009 to 28.84% and 27.62%. However, this number able to increase in 2010 and 2011 but the percentage was still low compared with the year of 2007.

This scenario happened because of the nature of the sector itself. Manufacturing sector usually need skilled worker in order to run the operation. Manufacturing sector parallel with heavy and complex job description compared to service sector. Because of that, manufacturing sector tend to provide the job opportunity to the male. For instance, assembly line in automobile sector is monopoly by male because of the job nature that is not suitable for female. This situation may limit the employability of this sector.

In contrast, service sector is more lenient in term of the job responsibility. For example, many students tend to make their part time job at fast food restaurant during their semester break because of the nature of the job that is not really particular regarding the skill and experience of their workers. Because of that, this sector usually gives more job opportunity rather than manufacturing sector.

Table 3: Percentage of Goods and Services In Malaysia Historic | RM mn | Current Prices | Year| on| Year Growth (%) Geographies Historic | RM mn | Current Prices Malaysia Geographies Malaysia Categories 200607 14.1 2007 200708 5.8 2008 200809 4.6 2009 200910 21.4 2010 201011 8.4 2011 38,421.4

Use of Goods and Services Categories 2006

Use of Goods and Services

23,098.7 26,363.2 27,899.3 29,191.2 35,433.5

Use of goods and services consists of goods and services used for the production of market and nonmarket goods and services (except for own-account capital formation), plus goods purchased for resale less the net change in inventories of work in progress, finished goods, and goods held for resale

APPENDICES

References

Department of Statistics, Malaysia. Online available at http://www.statistics.gov.my/portal, retrieved on 15 March 2012 Ministry of Finance. Online available at http://www.mof.my, retrieved on 15 March 2012
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Ministry of Human Resource. Online available at http://www.mohr.gov.my, retrieved on 15 March 2012 Ministry of International Trade and Industry (MITI). Online available at http://www.miti.gov.my, retrieved on 15 March 2012 MITI Weekly Buletin (Vol.34) 04 March 2009.pdf. Online available at http://www.miti.gov.my, retrieved on 15 March 2012 Unit Perancang Ekonomi. Online available at http://www.epu.gov.my, retrieved on 15 March 2012