As the agency for implementing productivity improvement programmes, the main role of MPC is to increase productivity levels in order to achieve the targeted productivity growth of 3.7% by 2020. The year 2017 had presented new challenges to MPC, namely being given a greater mandate as the Delivery Management Office (DMO) to work closely with the Economic Planning Unit (EPU) of the Prime Minister’s Department in monitoring and controlling the effectiveness of productivity initiatives at the national, sectoral and enterprise levels.
Strengthening Productivity and Competitiveness
In the Productivity Report 2016-2017, Malaysia recorded productivity growth of 3.5% to a level of RM78,218 in 2016 compared to RM75,548 in the previous year. Various efforts therefore need to be intensified to continuously improve the country’s productivity levels. With the establishment of 9 Productivity Nexus in May 2017, it is expected that productivity at sector level will continue to increase through 43 planned initiatives that are currently in progress. Among the projects that have been carried out include sharing of best practices, recognition of firms that have high productivity and acknowledging industry experts in the area of productivity enhancement.
MPC, as the Secretariat to the National Oversight Productivity Council (NOPC), also monitors the implementation of 4 strategic innovation models that have been successful in creating a positive impact towards improving productivity of the companies involved based on productivity indicators, namely capital productivity, process efficiency, profitability and labor productivity after the implementation of the intervention project. Among the achievements recorded were the Public-Private Research Network (PPRN) (by Ministry of Higher Education) which had succeeded in matching 104 projects involving academic experts to assist in addressing issues faced by the industry while SIRIM – Fraunhofer Partnership had implemented 560 technology intervention projects. In addition, Steinbeis Malaysia Foundation – The Malaysian Innovation Agency (AIM) was able to complete 212 business-related solutions and PlaTCOM-Ventures with SME Corp successfully transferred 33 intellectual property rights.
In order to strengthen the implementation of Good Regulatory Practice (GRP), MPC continues to conduct research and implement efforts to improve business regulations to enhance Malaysia’s competitiveness. In 2017, the cost savings from compliance reached RM1.2 billion through the Reducing Unnecessary Regulatory Burdens (RURB), Modernising Business Licenses (MBL) and Cutting Red Tape (MyCURE) projects.
The Doing Business 2018 (DB2018) Report by the World Bank ranked Malaysia 24th position out of 190 economies. For another two major international reports monitored by MPC, the Global Competitiveness Report 2017-2018 (GCR2017-2018) report released by the World Economic Forum (WEF) ranked Malaysia 23rd out of 138 countries while in the World Competitiveness Yearbook 2017 (WCY2017) report by the Institute for Management Development (IMD), Malaysia was ranked 24th among 63 economies. Overall, Malaysia sustained its position as among the 25 most competitive countries in the world in all the three reports.
Productivity Gain Measurement (PGM) is a systematic measurement and productivity management approach to assess the productivity performance of a firm. In 2017, PGM had been used in 6 projects involving 233 companies, namely projects under the National Blue Ocean Strategy (NBOS), projects monitored by NOPC, the High Productivity Enterprise (HPE) Recognition Programme and Enterprise Productivity Improvement Scheme (SPPE). In addition, ePGM had also been developed to facilitate PGM’s activities and enabled companies to self-assess seamlessly.
Among other initiatives undertaken by MPC to improve organisational productivity is the introduction of the Benchmarking Online Networking Database (BOND) system that has produced best practice articles from the Lean Project, Productivity-Linked Wage System (PLWS), Innovative and Creative Circles (ICC) as well as sharing by the winners of various national and international excellence awards. Furthermore, MPC promotes the use of the Malaysian Business Excellence Framework (MBEF) which has been adopted by 261 private companies in 2017 bringing the total to 5,326 companies in Malaysia after having adopted this framework since 2013. MBEF has also been adopted as a basis for assessing companies participating in the Industry Excellence Award (AKI) organised by the Ministry of International and Industry (MITI) as well as other local awards.
Among the programmes implemented by MPC to increase productivity at enterprise level are capacity building programs, system development programs, and best practice sharing. Organising the Team Excellence Convention is one of the main agenda of MPC to inculcate creativity and innovation among employees in an organisation through best practice sharing. Overall, the Team Excellence Convention Series in 2017 saw participation of 754 groups from 511 organisations with a total of 5,719 participants. A cost savings of RM515 million was also recorded at the series of conventions held in 2017.
Regional Productivity Improvement
As a member country of the Asian Productivity Organisation (APO), MPC hosted the International Forum on Productivity programme which was held from 12th to 14th September 2017 in Putrajaya. The program was attended by representatives from both the public and private sectors as well as delegates from the 19 APO countries had benefited from sharing of experiences and information on the latest developments occurring in productivity institutions across the Asia Pacific region.
MPC recorded an increase of 4% in revenue to RM49,108,594 in 2017 compared to RM47,178,952 the previous year. This was due to an increase in revenue of RM2,090,382 (18%) resulting from collections in training, consulting and convention fees. Expenditure for the year 2017 recorded an increase of 6% to RM53,177,857 which was an increase of RM3,043,585 compared to 2016. The increase in spending was due to the availability of additional development grants. Development expenditure for 2017 was RM6,714,484 compared to RM3,017,838 in 2016. This was in line with the allocation grant for SPPE of RM3,020,511. However, operating expenditure was reduced by 8% to RM1,421,613 as compared to 2016 due to the implementation of cost savings.
Prospects for Productivity 2018
Moving forward into 2018, MPC needs to be proactive in ensuring the successful implementation of productivity improvement initiatives at national, sectoral and enterprise levels. An additional allocation of RM15 million to increase productivity of the 9 major sectors of the industry which contribute to 30% of Gross Domestic Product (GDP) and 40% to total employment in Malaysia should be fully utilised by the Productivity Nexus that have been set up. We believe that this ongoing effort will be able to develop future workforce, drive digitalisation and innovation, ensure that the industry is equipped to increase productivity, build strong ecosystems and adopt a culture of productivity.
I would like to express my appreciation to MPC Board Members, Champions and members of the Productivity Nexus Committee, Consultative Panels and special task forces, as well as MPC Management and staff for their commitment and dedication in making MPC and the Nation more productive. I also wish to acknowledge the strong support given by the Ministry of International Trade and Industry (MITI) to MPC in its productivity improvement initiatives throughout 2017.
Tan Sri Azman Hashim
Malaysia Productivity Corporation