The P-K-P TIGeR

With increasingly keen competition and uncertainty, many MNCs are consolidating global production. Some have or are considering moving their plants to other countries, such as China and India, which are more cost effective than Malaysia. They are also focussing on plants, which are globally competitive from the aspects of technology innovation, quality of products, speed of response and those that are connected efficiently to the global and local supply network.

To sharpen Malaysia's competitiveness in the Electrical & Electronic (E&E) cluster and ensure its sustainability, an NITC initiative called the P-K-P TIGeR has been birthed. Some of the objectives of the P-K-P TiGeR are to jumpstart and integrate an e-manufacturing hub for global supply chain management, build ICT capacity within SMIs and ensure that government agencies are e-enabled and e-aligned to facilitate the seamless delivery of products and services.

The Co-Chairs of the TIGeR Steering Committee are the Chief Minister of Penang, Tan Sri Dr Koh Tsu Koon and the Secretary of the NITC, Tengku Datuk Dr Mohd Azzman Shariffadeen. Other members include Director and Secretary Generals as well as high-ranking officials from the Ministry of International Trade & Industry (MITI), Economic Planning Unit (EPU), Malaysian Industrial Development Authority (MIDA), Ministry of Energy, Communications and Multimedia, Penang Development Corporation, NITC, MIMOS, Federation of Malaysian Manufacturers (FMM), Frepenca, MyBiz, the Treasury Department, the Malaysian Administrative, Modernization & Management Planning Unit (MAMPU), Small & Medium Industries Development Corporation (SMIDEC) and the Customs Department.

FAQs on the P-K-P TIGeR

What is the PKP TIGeR?

'P-K-P' represents Penang, Kedah and Perak, the prime region for the country's E&E industry. TIGeR is an acronym for 'Technology', 'Industry' & 'Government' for e-Revolution.

What are some of the issues facing the local E&E industry?

Statistics indicate that currently, as much as 65.7% of Malaysian exports come from the E&E sector. 85% of these E&E exports are produced by TNC subsidiaries in Malaysia (Tier 1 firms) like Intel, Motorola, Hitachi Semiconductor, Siemen Osram, Sony Electronics, etc. Local firms export only 19%(Tier 2 firms) and 38% (Tier 3 firms) of their production. [Tier 2 firms, such as Globetronics, Unico and Eng Technology, are made up of local firms, which are linked to TNCs. Tier 3 firms are large local independent firms like Unisem, Likom and Sapura.] These statistics indicate the dependency of the local E&E industry on TNC subsidiaries. The TNCs are presently showing the trend of consolidating global production by focussing on more cost effective plants, whose supply chain networks are in place. Hence, there is a need for local firms to gradually wean themselves from this dependency by splicing themselves into the global supply chain.

Statistics also indicate that only 48% of the local firms have reached an intermediate level of Innovative Capability and 37%, an advanced level. In comparison, the majority of Tier 1 firms have demonstrated advanced and research-based innovative capability. There is a need to build technological capability in our local companies.

Only 28 of our local E&E firms have direct access to global buyers, via independent representatives, overseas sales subsidiaries, overseas joint ventures or overseas production units.

What is the aim of the P-K-P TiGeR? Through what means does it hope to achieve the aim?

The P-K-P TIGeR aims to reintermediate firm-level competitiveness of local SMIs in the E&E sector by integrating them into the global supply chain. Information and Communication Technology (ICT) can be employed as the enabler to drive down costs, increase speed and add value. The PKP TIGeR initiative hopes to achieve its aim, through the use of ICT, by building local technological capability to support the integration, creating direct access to the global market, creating opportunities for collaboration with international partners in order to facilitate technology transfers and by becoming sensitised to global trends in products and services.

What is the chronology of events leading up to the birth of the PKP TIGeR? 

14 June 2001 - Presentation by Frepenca to the Deputy Prime Minister on "Issues & Challenges in making Penang more Competitive Globally" in conjunction with InfoSoc Malaysia 2001, an annual conference organized by the National IT Council (NITC).

9 July 2001 - Meeting between MIMOS, FMM, PDC and MyBiz on an e-Manufacturing Hub. TIGeR initiative was mooted.

19 July 2001 - Presentation to the Prime Minister and NITC on the TIGeR initiative. The Prime Minister agreed to the setting up of the TIGeR Committee.

23 Aug 2001 - Meeting of the TIGeR Consortium (MIMOS, FMM, TradeNex,MyBiz, PDC)

28 Sept 2001 - First TIGeR Steering Committee meeting (Co-chaired by the Chief Minister of Penang and the Secretary of the NITC)

19 Oct 2001 - In the 2001 Budget Speech, the Prime Minister announced an RM5 million allocation for the TIGeR via the Demonstrator Application Grant Scheme (DAGS), another NITC initiative.

3 Dec 2001 - The Minister of International Trade & Industry announced that local manufacturing companies in the E&E sector will be able to benefit from MITI grants in early 2002 to embrace RosettaNet. She also announced that Penang, Kedah and Perak would lead the effort due to the high concentration of the E&E industry in the region.

Who are the members of the PKP TIGeR Steering Committee?

The PKP TIGeR Steering Committee comprise the Chief Minister of Penang, Tan Sri Dr Koh Tsu Koon and the Secretary of the NITC, Tengku Datuk Dr Mohd Azzman Shariffadeen as Co-Chairs; high ranking officials from the Ministry of International Trade & Industry (MITI), Economic Planning Unit (EPU), Malaysian Industrial Development Authority(MIDA), Ministry of Energy, Communications and Multimedia, Penang Development Corporation, MIMOS, Federation of Malaysian Manufacturers (FMM), Frepenca, MyBiz and the Treasury Department.

NITC Malaysia is the Secretariat to the Steering Committee.

The second meeting of the Steering Committee saw the inclusion of the Malaysian Administrative, Modernization & Management Planning Unit (MAMPU), Small & Medium Industries Development Corporation (SMIDEC) and the Customs Department.

What are the key components of the TIGeR initiative?

RosettaNet as an e-Business Messaging Standard; e-Business applications, e-Connectivity Development and an e-Enabling environment.

What did the Prime Minister say about Supply Chain Management?

"In order to compete in the international market, small and medium companies must participate in the Global Supply Chain Management Network for online and real-time procurement, production and logistics management. To use this network, small and medium companies need to utilise internet-based common order code, such as RosettaNet, to communicate directly with global suppliers." (quoted from 2001 Budget Speech, 19th October 2001)

Read more on RosettaNet at www.RosettaNet.org.my Read PowerPoint Update on RosettaNet in Malaysia (PDF  270KB )

What is RosettaNet?

RosettaNet is a common messaging standard for Supply Chain Management and other B2B usage. It can provide an open, internet-based framework for one language to align business processes within the global high-technology trading network. More and more global buyers (MNCs) are using RosettaNet.

Which of the MNCs in Penang are already on RosettaNet Boards?

CISCO, DELL, QUANTUM, SIEMENS, SOLECTRON, INTEL, AMD, HITACHI, ALTERA, FAIRCHILD, AGILENT, MOTOROLA

Who are the members of the PKP TIGeR Consortium?

MIMOS Berhad - as the Internet Infostructure Provider to supply a data centre facility, security, hosting and linkages to Customs and other Government agencies.

TradeNex/FMM - as the Industry e-Community Builder and e-Hub Provider to provide e-Hub services, industry content, portal and linkages to other industry hubs.

MyBiz - as the e-business and e-Marketplace Solution Provider to provide e-business application to support online business services and enabling services to e-enable private business networks.

In what other ways can the TIGeR initiative benefit SMIs?

• The local supply chain can be compressed, resulting in savings through more efficient processes, low inventory levels and volume buying. 
   
• e-Business services facilitate online procurement. This reduces operating costs. 
   
• e-Business applications enables SMEs to create their own unique identity to differentiate themselves in order to compete online in a Global Supply Chain. 
   
• e-Business applications can increase responsiveness, speed up process cycle time, enhance control of selling and customer relationships, increase operating efficiency, eliminate errors and disputes, streamline and integrate the supply chain and enable direct cost savings.

Are there other TIGeRs waiting to be born?

Yes. TIGeRs for the agricultural, automotive, manufacturing, social sectors and a host of other sectors. The NITC welcomes partners who are willing to champion these new TIGeRs.

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