ISO certification matter when dealing with customers or sourcing vendors because it is well connected to quality management system, well documentation of process of building products and conform to global standard. As yourself, do you want to buy your raw material from an ISO 9000:9001 certified companies or a normal company? ISO certification served as a proof that the company is conform to standard and doing business with them is assured. By gaining ISO certification, we can have potential increase in customers’ confidence, customers’ retention and new customers. Some customers in high value industry such as petroleum, semiconductor, medical and aerospace requires ISO certification as a minimum qualifying requirement to deal with them.
Ø Global reach
Besides winning new customers domestically, gaining a new certification in ISO will qualify my organization to compete globally in international market. This is critical for certain countries that impose high trade barriers such as European Union. To be qualify entering the developed market, my organization need at least an ISO certification to assure the importer and the government that the products that manufactured by my organization are conforming to high European standards. Even as countries in the world progress, high standards are imposed to enter, their market and ISO certification is gaining more popularity around the world. By choosing to certify ISO there will be standardization of system because most countries in the world will adopt the same system. There is no need for prequalifying and reviewing each other different standards from different countries. An ISO is just like international accepted languages which can be understand from any countries in the world. It is associated with quality management system no matter it view from perspective of Malaysian, German, Chinese or American. Even the certification is originated from European, American and Japanese are also began to adopt the system in order to be able to export to European Union countries. Emerging new European nations such as Poland, Latvia, Romania, Bulgaria and Turkey with potential entry to European Union will impact to business world because the European Union market will be getting bigger in term of population market and buying power. No business would like to lose out in this new potential market for them to export.
In order to survive as said earlier, we need to expand to global market not just domestic market. European unified market and new emerging market such as India and China offers a good opportunity for our organization to grow even further. Therefore, qualifying ISO is the best benefits we can ever achieve because it opens new windows to the new market for semiconductor business of my organization. Important things is the fact that ISO is the world most widely adopted quality standard compare to any other certification whether from United States or Japan.
Ø Save qualifying time and cost
As the ISO certification is maintain for certain period and will be reviewed from time to time, there is no need to qualify again and again the same process. Once accepted or qualified, the companies need only to maintain and ensure they pass the subsequent audit from the registrar. No matter they enter Hong Kong market, European market, Japan market, India market or Malaysia market, the company can show the same certification to the company it deals with. There is no need to qualify again for new certificates for each new vendors or customers it deal with. This is cost and time saving because the certification can be widely used and accepted globally.
Another cost saving can be avoidance of customer driven quality audit. By having a reputable certification, there is no need for customer to request additional audits to be carried on its vendor when doing new business. If we have new customer, equip if ISO qualification they will accept it as a standard. We will not follow any variable customer set standard because one unique standard format or criteria from ISO is used and can be accepted worldwide by any company.
Ø Maintaining Quality
Quality is something very subjective. However, the basic understanding of quality is the product or services should be conforming to what the manufacturer has claimed. If the process variability is low and stable, there is high potential that the product process is conform to standard and the outcome of the product is expected as claimed by the manufacturer. That is why a well-documented process should be a fundamental of achieving quality because all employees or systems will follow the expected process flow required to achieve that state. For example to achieve a delicious plate of KFC snack plate, there are same documented process that all kitchen employee should do no matter which branch of KFC it is around the world. This is to ensure there are no visible variability for products coming out from any assembly line, branch or countries where the company operate. It promotes standardization and consistency in the organization and having a repeated process which is expectable is easier to manage.
Besides maintaining quality, it can also instill the behavior of readiness among employees of the organization to uphold quality. This is because there will be a scheduled review and audit from the registrar and company should pass the criteria measure for every subsequent audit for not to risk invoked of their certification. By make sure all employees always ready and aware to maintain the standard of their workflow, they will reinforce the behavior for a long term. They will also be ready when there is any customer audit carry on in the future because from the exposure for the ISO registrar audit carry on constantly. This is also build sense of urgency to employees every time an outsiders such as auditor, customer or vendor come to the plant and they will maintain their seriousness towards quality and conformance standard when visitors come.
ISO series standards also encourage company to identify the need of use of statistical data techniques, and to implement and control the techniques. Statistical data and analysis and be essential to identify problem, seeing trend and taking corrective action if the monitoring of process variability is alarming..
Ø Quality as competitive weapons
Quality has become an important factor that company need to distinguish itself from one another in the ever competitive market. Pricing and promotion is not the key factor to attract customer because customers are more demanding and knowledgeable on their rights. They demand the product that is reliable, value for money, conform to the standards as claim by the manufacturer and will not hesitate to take action if their expectation is not met. A company that can produce a quality product will build their customers confidence, capture new market and ensure the satisfaction of customers fulfilled. For example, Toyota has long branded as quality car manufacturer has recently overtook Ford Motor to be world second largest car manufacturer in term of volume. Toyota excel because it has a well control quality system compare to the American counterparts. It is not anymore we can capture the market by just instilling demand from promotion and price. People are willing to pay more to get higher quality and reliability product. Therefore, quality system build in organization can be an important competitive weapon to stay on top and differentiated it from all other competitors.
Taking quality as a competitive weapons is the main factor now in the market as developing countries are more and more depending on export to the developed and industrialized nations which always impose a trade barrier to protect its market. Having a reliable system, quality products and putting customer at forefront in ensuring their needs and expectation being meet is a key for organization to stay on the top of the game compare to firms or business that still not aware or not ready. Time factor is important to make sure my company build up fast and being a leader of quality in the market which will take time for other organization to follow and achieve the same point.
Ø Quality for Cost Saving
When all process and work related activities are well documented, there is better chance for any improvement and cost saving efforts carries on in the company. If the process is well documented, it is easy for management or team members to look in micro the problems root cause that need to be tackle in course of the project implementation. There are many quality related projects in the company that is carry on with the fundamental outcomes from ISO qualification such as Six Sigma, business process improvement, manufacturing waste reduction, Just-in-Time management and product improvement.
Business cannot survive just to achieve higher sales or new market. It should maintain its management on its resources, management of waste, better process control, greater quality awareness among employees and constant process improvement. In actual Cost of Poor Quality (CPQ) if can be manage effectively can actually increase the sales or revenue of the organization. Therefore, to increase our position does not necessary increase a budget to do marketing or promotional activities. Simple activities of improving quality can result in better results than we would probably know. All those process improvement and managing resources effectively cannot be achieve if there is no clear understanding of process and full view of overall process requirement. ISO9000 help company in this matter because all the process and system in the company will be well documented and maintained. When there is any quality issue arises, there is corrective action taken as soon as possible because well documented process are easily identified and find the root cause. A survey by UCLA also showed that NYSE listed companies that certified ISO9000 also shown a greatly improvement in financial performance. When the performance of company increase in term of lower productivity inefficiency, lower defect rates, lower scrap rate and streamlined process this can results in significant financial returns to our company. Problems solved will be documented and organization will know how to handle better in the future if there is any occurrence. Better perform and manage company share prices will also be a hot buy for investor to invest in our company.
Ø Well archiving of documents and easily accessible information.
As all workflow, work instruction, visual aids and system will be documented either in paper file or system are easily to be access by employees, customers, vendors or auditor when need right on time. It can be time saving and give a good impression because of good data or information resources management. As my organization has extensive intranet network some of the information such as visual aids and work instruction put in the system can be access by employees when doing their job. For example production operator review the work instruction how to start loading and testing a semiconductor devices using a complex tester. Without well documentation to refer, they are prone to make wrong decisions or action that may cause quality issue such as customer return, unit failure and customer warranty claim. The information is kept inside the share drive and can be open by employees when needed. This can be good way to control cost of having paperwork, save space and provide important data when needed. We have our own Document Control department to control hardcopy of the documents in archive that can be retrieving when needed. Documented quality programs are also easy to maintain by the organization.
Well accessible information is also good for top management because they can get a clearer picture of overall business operation. By understanding the fundamental of business operation, management can used it to further improve the overall business efficiency when needed. For example HR Manager can reviewed back formal copies of Marketing Manager job description in document management system (DMS) if he want to review back the job criteria based on current job requirement or set a criteria for advertisement to hire a new managers for my company. Engineering manager can review the process of testing a CMOS device using a type of tester to further find out to explore for improvement. Each person or department responsible for the documents or the originator will be responsible to update it when there is any change. This distribution of responsibility to respective department can ensure they carry their job in good order, as they can be blame for any inaccuracy of data at any time. For example if the updates for new usage of test script program not updated by the Product Engineer, he can be blame by management and customer if there is an issue of wrong program use. Controls of data are more frequent such as cancellation of obsolete documents will ensure all information is up-to-date.
Ø Maintaining Best Practice
In documented process, mostly all best practice will be documented for references in the future. This best practice is important to ensure all the organizational activities, process and workflows will maintain its effectiveness, efficiency and maintain of quality standards in its products and services. This will also ensure continuity of knowledge from one generation to another generation when old employees go out and new employees recruited by my organization. There is no lost link of knowledge by the employees. Best practices that are documented is the basic requirement for achieving or participating a higher level quality awards such as Malcolm Baldridge or Deming Prize.
Best practice can also be served as a platform for other organization to learn or do benchmarking. Sometimes our organization can also share this knowledge to certain friendly affiliates to learn and improve their own operation for mutual benefits. For example, sharing knowledge to vendor to improve their cost can bring better business relationship and potential cost saving on our side for material sourcing after vendor able to realized their goals. A good business and strong organization dare to share its best practice to the industry for common benefits.
Ø Improving Company Status and Employee Morale
Company status will be elevated in the market after we achieve the ISO9000:9001 certification. When dealing with other company such reputation is important to us because other company will see us as a solid, strong and well managed company. Such reputation will results in vendors and customer confidence to us. A new company for example from Netherlands will not know the status, financial capabilities and expertise of our company to meet their business requirement but sure they know the ISO9000 certification that we owned. Moreover, to employees working under a company with such certification will increase their morale and pride. It will also help to retain employees when they feel that they work under a stable and well managed organization. To potential new recruits they will also choose a reputable company to work with and thus we can attract all the best talent to work under our organization umbrella. Brand equity results from highly reputable company are subjective but the potential for generating financial outcomes can be significant to our organization.
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By Paul W Dobson
As in the United States, increased concentration in grocery retailing in Great Britain has raised issues about the buying power of multiple retailers.Whether, and if so how, it prevents, restricts, or distorts competition at the retail and/or producer level to the public or consumer detriment has been the central aspect of concern in a number of formal investigations by the British competition authorities over the last couple of decades. These include the industry inquiries conducted by the Monopolies and Mergers Commission in 1981, by the Office of Fair Trading (OFT) in 1984 and 1999, and by the Competition Commission in 2000. Retailer buying power has also featured in certain merger cases, most notably the recent Competition Commission inquiry into Safeway and the contemplated mergers with Asda, Wm Morrison, J Sainsbury, and Tesco in 2003.
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Globalization, with its vast influence on the global economy, society, and culture, has brought significant impacts in its wake. Likewise, the global diffusion of Chinese food culture has occurred during the past 200 years, under the impact of Western capitalism and colonialism (Li, 2001).
Nowadays, Chinese food has become one of the three major popular cuisines in the USA and the UK (Apple Daily, 2001; Retail World, 2001). Chinese flavors and cooking techniques have become commonplace on many menus, and Chinese-concept restaurants sport truly mainstream images. In all likelihood, Chinese cuisine seems to be making more headway on the international palate (George, 2001). Chinese food service operation is a Chinese-dominated profession.
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Malaysia Airlines’ vision is to become “An Airline of Excellence”, offering the very best to its passengers in terms of safety, comfort, service and punctuality. This vision was amplified by our
chairman in the company’s 20th anniversary commemorations in October 1992.
The mission has been stated in three main thrusts
(1) To make Malaysia Airlines one of the leading
standard bearers for the airline industry in
terms of safety, efficiency and quality of
(2) To develop Kuala Lumpur as the preferred
gateway into Malaysia and the South-East Asia
(3) To make Kuala Lumpur a major cargo
transhipment area for the Asia-Pacific rim.
By: Abdullah Mat Zaid
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The government developed ambitious biofuel policies in 2005 when it appeared that the country’s key agricultural product, palm oil, could be profitably transformed into biodiesel. The policies aimed to expand the market for palm oil, improve energy security and create a new export industry.
Malaysia subsidises the end-user prices of petroleum transport fuels so, by replacing a proportion of petroleum diesel with biodiesel, the government hoped to reduce its subsidy burden.
Environmental considerations were a minor motivating factor, with the government seeking to improve ambient air quality and reduce emissions of greenhouse gases through increased biofuel use.
However, the very striving of governments worldwide to encourage the production and use of biofuels undermined the economic viability of the industry. In 2007, global production was approximately 70 million litres of biofuels, converting millions of tonnes of vegetable oils, tallow, grains and sugar cane to biofuels.
A sizeable portion of this production occurred in OECD countries, supported by government incentives that are estimated to have totalled over US$15 billion in 2007 alone. The result was a major surge in demand for agricultural commodities over the past two years, causing dramatic rises in prices, including for palm oil.
High feedstock prices put biofuels beyond the reach of any but the wealthiest nations that can afford to maintain subsidies.
Malaysian biofuel producers were not able to draw on significant domestic government support to maintain their operations.
To date, government support for the Malaysian biodiesel industry has been limited to RM60 million (US$16 million) in low-interest loans in 2004, and RM12 million (US$3.3 million) in federal grants for demonstration projects in 2006. Plans to mandate the replacement of five per cent of domestic diesel consumption with palm-based biofuel (B5) were never implemented.
Hoped-for jobs from the biofuels industry did not materialise and, instead, many biofuel facilities suspended operations in 2008, stranding public and private investments.
Worsen subsidy burden
While 92 biodiesel projects had been approved in Malaysia during 2006 and 2007, a survey of plants in September 2008 revealed that there were 14 functional biodiesel plants, only eight of which had produced biodiesel in 2008 (approximately 130 000 tonnes—less than ten percent of their potential production capacity).
The remainder had suspended operations due to high feedstock prices, and a further four had closed. Eight new biodiesel plants were under construction.
Assuming no further closures or cancellations, total production capacity is expected to reach approximately 2.7 million tonnes in 2009.
Biodiesel is estimated to cost around RM0.67 (US$0.20) per litre more to produce than petroleum diesel when palm oil is RM3000 per tonne and Malaysian Tapis crude petroleum oil is US$115 per barrel.
Replacing petroleum diesel with biodiesel would therefore worsen the government’s subsidy burden, rather than improve it. The Malaysian Government’s consumption subsidies for petroleum fuel have been estimated to total around RM25 billion (US$7.8 billion) in 2008 alone.
Replacing five per cent of petroleum diesel with biodiesel would add RM395 million (US$122 million) per year to this subsidy bill, at the above mentioned prices.
A B5 mandate would lock Malaysia into consuming around 500000 tonnes (approximately 560 million litres) of biodiesel per year, regardless of its cost relative to petroleum diesel. The implications could be expensive.
For example, if petroleum oil prices fell to US$75 per barrel while palm oil rose to RM5000 per tonne (only RM500 higher than prices in March 2008), the subsidy cost of supplying five per cent of Malaysia’s diesel from biodiesel would be around RM2.2 billion (US$675 million) per year.
Crude oil vs palm oil balance
A biofuel mandate would be a retrograde step for the Malaysian Government, which introduced measures in June 2008 to restructure the price subsidy for petroleum fuels. Fuel subsidies increase consumption, discourage more efficient use of resources and absorb national budgets that could be spent on social services (such as health and education).
By moving fuel prices closer towards the international market price, the government generated subsidy savings in the transport fuel and electricity sectors of RM14 billion (US$4.2 billion) in 2008 alone.
If palm oil is cheap relative to petroleum oil, replacing five per cent of Malaysia’s petroleum diesel with biodiesel could generate subsidy savings.
For example, if the palm oil price were to fall to pre-2006 prices of around RM1500 per tonne while petroleum oil prices shot up to US$175 per barrel, a B5 mandate would reduce government subsidies by around RM1400 billion (US$430 million).
Were such circumstances to arise, however, production and blending of biodiesel would be profitable, eliminating the need for government intervention.
The profitability of Malaysian biodiesel production is precarious, depending on volatile palm oil and petroleum prices, and decisions of policymakers both in Malaysia and overseas.
The vast majority of Malaysia’s current biodiesel production is exported, mostly to the EU and United States where domestic subsidies support biodiesel use (including imports).
Malaysian biodiesel is likely to be benefiting from a loophole in U.S. legislation that allows fuel blenders to claim a US$1 per gallon (US$0.26 per litre) subsidy for blending biodiesel (including imports), even if the product is then re-exported (usually to the EU, where the biodiesel can access additional consumption subsidies).
Pressure from the EU to close this loophole could prevent Malaysian (and other) biodiesel exporters from accessing the U.S. subsidies. In the longer term, sustainability standards could limit access into the EU of all but certified biofuels and feedstock.
Despite biodiesel being uneconomic, many countries have supported the development of a domestic biodiesel industry for social and environmental reasons.
There is no evidence to suggest a strong social or environmental rationale for promoting biofuels in Malaysia. While high commodity prices have delivered benefits to some, these have been more than offset economy-wide by rising food prices, which have hit the poor hardest.
Oxfam (2008) estimated that high food prices attributed to global biofuel production have caused 30 to 75 million people to fall into poverty and to jeopardise the livelihoods of 100 to 220 million people.
Forest clearing offsets benefits
The presumed environmental benefits of biodiesel—most notably in terms of reducing greenhouse gas emissions—have evaporated with improved understanding of the full lifecycle impacts of biofuel production.
Biodiesel is commonly considered to be "carbon neutral" because carbon released in burning the fuel is offset by growing the feedstock.
However, the conversion of forest to oil-palm plantations has been has been found to cause greenhouse gas releases that far outweigh any carbon emission reductions arising from the use of biofuels sourced from that land.
The expansion of the palm oil industry in Malaysia has been associated with deforestation, release of carbon from vegetation and soil, forest fires, soil erosion, water pollution and biodiversity loss.
Current domestic production of biodiesel in Malaysia is unlikely to be driving deforestation, due to low production levels.
However, the growing global demand for palm oil—largely due to increased demand for vegetable oils for biodiesel production—has contributed to a plantation expansion boom in Borneo, with associated deforestation and social conflicts.
The Government has said that no more forest reserves will be converted to oil-palm.
However, it is allowing land previously zoned for agriculture to be cleared, including rainforest.
Should the Malaysian Government institute its B5 mandate, 570 000 tonnes of palm oil would be required. This equates to approximately 130 000 hectares of land or three per cent of the current 4.2 million hectares currently under cultivation.
The majority of new Malaysian oil-palm developments are in the states of Sarawak and Sabah.
These state governments have a great deal of autonomy and it appears that, in some areas at least, environmental impact assessments are not being performed rigorously.
Many Malaysian firms are also operating in the Indonesian provinces of Kalimantan and Riau, which have high rates of conversion of forest to oil-palm, and less exacting governance structures.
These fundamental elements of biodiesel production are unlikely to change in the near term. In the meantime, measures to address sustainability issues will become increasingly important in order to supply environmentally-conscious markets.
Such measures might improve the environmental credentials of palm oil destined for OECD markets, but are likely to do little to avoid expansion of uncertified oil-palm and consequent deforestation.
As for the international export opportunities, prospects have diminished since the early euphoria. European Union and U.S. subsidy policies may currently be improving the viability of Malaysian biodiesel exports, but policy changes in the future may limit access for Malaysian biodiesel to U.S. and EU subsidies.
Refrain from intervening
In light of the limited economic, social and environmental benefits of promoting biodiesel in Malaysia, this report recommends that the government refrain from intervening in the market for biofuels, through such measures as offering direct price support or imposing mandatory blending.
The biofuel industry should be allowed to function in response to market signals - consistent with environmental and social standards - so that the industry establishes itself on a sustainable rather than a government-dependent basis.
The government’s current plan to move domestic retail fuel prices towards the world price is commendable, particularly as steps are also being envisaged to ensure that adequate safeguards are provided for the poor.
The government has correctly surmised that biodiesel can only, at most, complement other energy sources. It cannot significantly augment the nation’s energy supplies.
A B5 mandate would only lock in a new form of fuel subsidy that is delinked from market forces, thus creating new inefficiencies in the economy that would likely require painful reform in future years.
GREGORE LOPEZ is a postgraduate student at the Crawford School of Economics and Government, Australian National University. The above is a summary of this biodiesel subsidy viability report