Friday, August 31, 2012

The Greedy Master of Supply Chain

1.In the economy, the survival of a business is in the supply chain.

2. When some people are in control over the supply chain, they will have the major power as if they were the monopoly. This is what the Chinese in Malaysia has.

3. Despite being less than 30% of the population, the Chinese are controlling over 70% of the country’s supply chain. Everyone knows about it except for some arrogant Malays and some denial Chinese.

4. If you refer to the history, the Chinese in Malaysia had been given the privileges by British when they practiced “divide and rule” less than 70 years ago. They had been given the power to trade, to start businesses and to extend their business chain as what they did in China.

5. Malaya at that time was full of new economic prospects for these immigrants.

6. As the pioneer, they had all the access to manipulate the economy and to bury inheritance seeds for their generations. Everyone will do the same if given such opportunities.

7. Nevertheless, this open market is based totally on profits and efficiencies. In this case, they have no social obligations toward Malaya and they will keep exploring and getting everything for themselves.

8. This is what happens before 13th May 1969.

9. After 1969, the government had established New Economic Policy (NEP) to intervene this open market system in order to maintain balance. Government knew the effect of this capitalist system where rich people will be getting richer and poor people will be getting poorer. NEP was the required affirmative action.

10. Unfortunately, since most Chinese were in the richer segments and most Malays were in the poorer group, this NEP had been misunderstood as a discrimination against Chinese. Most of them are feeling resentment even until now.

11. Ironically, what they fail to see is the greediness of their ancestors to get 100% of the Malaysian economy. Despite being the pioneer of the most powerful supply chain, it is still not enough and they still want more!

12. Looking throughout the world, China itself will rise as one of the economic giants therefore no policy will have the ability to break into this supply chain. Malaysian Chinese will surely have all the advantages even with NEP.

13. All the cosmetic affirmative actions in NEP such as selective licensing, rules to include bumiputra or subsidies from the government will be useless. Should NEP is a total success; it can only serve to protect Malays from being a total consumer, far less than what Chinese community has.

14. Nevertheless, some arrogant Malays will still want to abandon the system for their hatred to the government.

15. Despite they themselves were the product of NEP, they accidentally realized that other Malay should go out in the open ground to fight the war they couldn’t win and to face the discrimination they couldn’t survive.

16. They are punishing the system instead of the people who abuse it.

17. So unlike the master of supply chain, the Malays will continue to be labeled as racists for protecting themselves via NEP.

18. It is only The Greedy Master that can have it all.

Notes: Picture 1 is taken from Pictures 2 is taken from Removable upon requests.


Anonymous said...

You said no policy can break the monopoly of the chinese over control of the supply chain, not even the NEP.

You're spot on here. Therefore its left to the individual genuine Malay entrepreneurs or their associations to do so: to sow the seeds, to water and nurture the plants, to let them grow big and strong so many more can benefit from them, so to speak. Its been done by all the others before eg. jews and chinese of course.

Do we have any? If we have can we depend on them to lead the good war of breaking the monopoly?

It was initiated by Tun and Daim in the '80s and '90s, but these group of Daim's proteges were wiped out in 1998. But, its also doubtful if they were genuinely concerned with breaking the paths for more Malay businessmen to follow. They did leave a few legacies eg. Kolej Yayasan Saad (I'm hard-pressed to think of any other, though) but they seemed more preoccupied with their own personal affairs - getting themselves trophy wives, for example.

So, when can we see the stronger already established Malay tycoons to start the ball rolling? If we're successful in this effort, nobody can take it away from us and the world outside have to give us the respect, however reluctantly, which we by then would have already earned. And we would then be ready to tackle the business world as equals rather be looked down upon as 'pariah' which is whats happening now!

MalayMind said...

Dear Ano,

I do agree with you.

China once closes their economy to the world until lately.

They're the example how protection and nurturing can help to boost up the nation.

As for the right time, nature will take its course.

anakmalaysia said...

I like your blog...

I will add this to my link

chedayat said...

salam tuan..

terima kasih kerana sudi melawat blog saya yang tidak seberapa itu.. dan saya amat menghargai komen dan sokongan yang tuan berikan.. saya akan link blog tuan didalam blog saya..

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...


My apologies for the earlier posting, had to let of some steam, well....padedoh's mind has been going a bit bonkers with the current leadership.

Am stable now, and I like to comment on your idea of looking at the economy from a supply chain point of view.

A very interesting analysis. Just to add some input, the raw materials i.e. rubber and oil palm was of course Chinese dominated, and at that time, and some of them ventured out to manufacture small value added goods i.e cooking oil, shoes, etc. As the country developed, they took on the more complex and capital intensive steel/metal manufacturing industry e.g. Alumunium, Iron, etc - AmSteel, Lion Corp, Alumium Co.,etc.

In the 2nd tier, we have the construction companies and manufacturers. Of course, now favorable credit terms can be employed so as to give a competitive advantage.

Whilst providers of capital include both Malay and Chinese institutions, unfortunately, Malay finacial institutions have to frequently support 'political' projects, which can increase their NPL, especially if it the deal was an outright con.

Downstream from the company, we see the distribution channel. This too is controlled by Chinese. Freight forwarders, retail stores, etc,etc.

At the consumer level, due to the effects of the NEP, the consumers are both Malay, Chinese and Indian.

So until now, I have merely stated the obvious.

Some questions - and comment;

Why can't we control the primary industry?
We see that the entry of large GLCs like Synergy Drive and LTAT has given control over one sector. But this is largely for the export market. Perhaps the most important source is the steel and metal industry, but efforts have not been targetted or successful here.

A second important sector is the Distribution sector. Why cant we create a company as strong as Tiong Nam?

Questions, questions,...

In conclusion, under Tun's time effort was focused at the 3rd tier,aka Proton for an example, with the hope that a 2nd tier set of suppliers will evolve. But with the input cost coming from the 1st tier, and the annoying corruption employed, the end result was poor quality products, inefficiencies originating downstream from the primary integrator which will screw the 'national project, so to speak.

To put a long story short, we can only come up, if corruption is treated as a high crime and punished.

Al Padedoh


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