Logistics and Supply Chain in Malaysia Issues and

EASTS International Symposium on Sustainable Transportation incorporating Malaysian Universities Transport Research
Forum Conference 2008 (MUTRFC08). Universiti Teknologi Malaysia. 12-13 August 2008.
Logistics and Supply Chain in Malaysia: Issues and Challenges
Rosena Md Ali1, Harlina Suzana Jaafar2*, and Sabariah Mohamad3
ABSTRACT
Rather than being viewed as a supportive industry to other functional areas previously, now, logistics has been
regarded as a strategic industry on its own. In the Asia Pacific region, the potential for growth is very
promising. Despite of the remarkable expansion of the industry; particularly in Malaysia, there has been very
little published research in the area of logistics and supply chain resulting in a very limited dissemination of
information for the purpose of coordination, learning, advancement and etc. Thus, the purpose of this paper is
to examine the issues and challenges faced by the practitioners as well as the relevant parties involved in the
industry. By reviewing the logistics and supply chain management literature in Malaysia followed by a
preliminary interviews with five organisations from different sectors, this study found four key issues and
problems, namely the operational logistics, service response logistics, information flow, and policy-related
issues. These issues have been the hindrance for logistics effectiveness in Malaysia. This paper attempts to
open up various issues surrounding this complex and fragmented industry. It thus, provided a base for future
researchers to examine any aspects of logistics and supply chain management in Malaysia.
Keywords: logistics, supply chain management, logistics issues

Kata kunci: logistik, pengurusan rantaian bekalan, isu-isu logistik
1
Malaysian Institute of Transport (MITRANS), University Technology MARA, 40450 Shah Alam, Selangor.
rosenama@salam.uitm.edu.my
2
* Malaysian Institute of Transport (MITRANS), University Technology MARA, 40450 Shah Alam, Selangor.
harlinas@salam.uitm.edu.my
3
Malaysian Institute of Transport (MITRANS), University Technology MARA, 40450 Shah Alam, Selangor.
sabariahm@salam.uitm.edu.my
1
1 INTRODUCTION
The development and continuing evolution of the logistics role are obvious in the last two decades (Gundlach,
2006). Rather than being viewed as a supportive industry to other functional areas previously, now, it has been
regarded as a strategic industry on its own (Gundlach et al, 2006; Sum et al, 2001). In fact, logistics had already
become prominent and acknowledged as a critical factor of competitive advantage in other advanced countries
like the United States and the United Kingdom (e.g. Bowersox and Closs, 1996; Bowersox and Daugherty,
1995; Christopher, 1993). The increasing importance of the logistics industry has been resulted from the
expansion of the international trade as well as the globalisation strategy of companies in their business.
In the Asia Pacific region, the potential for growth is very promising (Sum et al, 2001; Bhatnagar et al 1999).
The dramatic expansion in the external trade in countries such as Singapore, Thailand, Malaysia and Indonesia
recently, has resulted in an increase in demand for more efficient and effective logistics services. Despite of the
remarkable expansion of the industry; particularly in Malaysia, there has been very little published research in
the area of logistics and supply chain resulting in a very limited dissemination of information for the purpose of
coordination, learning, advancement and etc. Consequently, as a part of a large-scale research project on
logistics and supply chain management, this study begins by examining issues and challenges faced by the
practitioners as well as the relevant parties involved in the industry.
2 LITERATURE REVIEW
In understanding the development of logistics in Malaysia, it is useful to understand the evolution of logistics in
other developed countries such as the United States. The lesson learned could provide some ideas on the
patterns of development on how the logistics and supply chain began and expanding. The development of
logistics and supply chain industry would then be quicker by learning the experience of others, in which various
strategies could be established in achieving the industry’s objectives.
2.1 Logistics Management
Generally logistics refers to the inbound and outbound flow and storage of goods, services, and information
within and between organisations (Gundlach et al, 2006). The Council of Supply Chain Management
Professionals (CSCMP), which is the pre-eminent professional organisation for academics and practitioners in
the logistics field, formed in 1963, defined logistics management as “that part of supply chain management that
plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services,
and related information between the point of origin and the point of consumption in order to meet customers‟
requirements” (see www.cscmp.org). This definition has resulted from numerous changes in the process to
understand logistics (see Table 1).
Despite of its numerous changes, most definitions accept the notion suggested by CSCMP in that the emphasis
should be on leveraging low cost information against more expensive logistics assets such as inventory,
warehousing, labour and transportation. Gundlach et al (2006) emphasised that the early logistics management
research only focused on the management of transportation and warehouse. However, the recent logistics
research is directed into two perspectives:
1. Supply chain logistics, concerned with the flow of goods. This includes traffic & transportation,
warehousing and storage, inventory management, packaging and returns goods handling, salvage and
scrap disposal, which are the key foci of supply chain logistics
2. Service response logistics, concerned with the coordination of non-material activities necessary for the
fulfilment of the service in a cost – and customer service – effective manner such as order processing,
information systems, customer service and procurement.
2
Table 1: The Development of Logistics Management
Period Development
Prior to the 1980s Logistics was primarily concerned with the outbound flow of finished goods and
services, with an emphasis on physical distribution and warehouse management. As a
managerial activity, logistics focused on its role to support an organisation’s business
strategy and to provide time and place utility.
During the 1980s The industry globalisation and transportation deregulation led to the expansion of
logistics beyond outbound flows to include recognition of materials management and
physical distribution as important elements. In 1986, CLM (now CSCMP) defined
logistics as “the process of planning, implementing, and controlling the efficient, cost-
effective flow and storage of raw materials, in-process inventory, finished goods, and
related information flow from point of origin to point of consumption for the purpose of
conforming to customer requirements” (see www.clm1.org).
During the 1990s Logistics was defined as “the process of strategically managing the procurement,
movement and storage of materials, parts and finished inventory and related
information flow through the organisation and its marketing channels”. The definition
was changed as a result of accelerated market changes due to shrinking product
lifecycles, demand for customisation, responsiveness to demand, and increased reliance
on information” (Christopher, 1998).
During the 2000s These years experienced further changes as to how logistics is defined. Development in
international trade, supply chain management, technology and business process re-
engineering generated a need to re-evaluate the logistics concept. As a result, in 2001, it
was defined as “that part of supply chain process that plans, implements, and controls
the efficient, effective flow and storage of goods, services and related information from
the point of origin to the point of consumption in order to meet customer requirements”.
* Adapted from Gundlach, G.T.; Bolumole, Y.A.; Eltantawy, R.A. and Frankel, R., (2006), The Changing Landscape of
Supply Chain Management, Marketing Channels of Distribution, Logistics and Purchasing, Journal of Business and
Industrial Marketing, Vol.21/7, pp 428-438.
2.2 Supply chain management (SCM)
Supply chain management, on the other hand is conceptualized as a network of companies ranging from
suppliers to end-users. These companies have the intention of integrating supply/demand via coordinated
company efforts. CSCMP defined supply chain management as “encompasses the planning and management of
all activities involved in sourcing and procurement, conversion and all logistics management activities.
Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third-party service providers, and customers. In essence, supply chain management integrates
supply and demand management within and across companies” (see www.cscmp.org). Table 2 highlights the
development of understanding supply chain management, in which several definitions have been used
throughout its development.
3
Table 2: The Development of Supply Chain Management
Period Development
Early 1980s The term supply chain management is believed to be originated from the work of
consultants (Oliver and Weber, 1982). During this period researchers focused on
understanding the system integration of business processes throughout the supply chain.
Emphasis was given to reengineering the chain in order to meet customer requirements and
improve customer service (Lee et al, 1997). SCM research has since evolved to encompass
a combination of trends in the management literature, such as industrial markets, integrated
materials management, system integration, the “quality” revolution, management of
relationships, and business process integration and management.
Late 1980s Attempts were made to integrate different frameworks and views of SCM and, thereby,
better define the domain of SCM.
Late 1990s Several frameworks have been developed to guide research and practice, such as Global
Supply Chain Forum (GSCF) (Cooper et al, 1997) framework, the Supply Chain
Operations References (SCOR) model (Supply-Chain Council, 2003) and Srivastava et al’s
(1999) business processes and shareholder value of framework.
* Adapted from Gundlach, G.T.; Bolumole, Y.A.; Eltantawy, R.A. and Frankel, R., (2006), The Changing Landscape of
Supply Chain Management, Marketing Channels of Distribution, Logistics and Purchasing, Journal of Business and
However, some commonalities appeared on two aspects:

 Each relies on terms such as coordination and integration and emphasises the harmonisation of operation
among supply chain members.
 Focus on their cross-functional business processes with the objective of providing value for the entire
supply chain (Gundlach et al, 2006; Lambert et al, 2005)
3 BACKGROUND OF LOGISTICS AND SUPPLY CHAIN IN MALAYSIA
Managing the logistics industry has been a neglected area of business activity in Malaysia. In the past,
companies are not aware of the advantage of having an effective distribution system and thus have not given
sufficient priority to the development of effective distribution strategies. However, the transformation of
economy from agriculture-based to a trade-driven based as well as the development of international trade within
the last decade has stimulated awareness that transport and logistics sector plays a critical role in facilitating the
country’s economy (MIMA, 2004).
A recent report highlighted that Malaysia has the opportunity to create an additional value of about RM9-11
billion over the next decade, which contributes approximately 12.1% to the GDP, if the supply-chain
competitiveness is improved through more efficient transport and logistics services. The report also emphasised
that by reducing the supply chain cost will ultimately stimulate further national growth as the World Bank has
estimated that a 10% reduction in transportation costs can increase trade by 20% (Anonymous, 2003).
Similarly, McKinsey Global Institute who studied productivity improvements in various industry sectors around
the world, indicate that such efficiency improvements are likely to translate into a GDP growth effect of at least
the same order. Consequently, this creates a virtuous and perpetuates effect on the economy.
Various incentives have also been introduced by the government. One of the incentives is Integrated Logistics
Services (ILS) incentives. The purpose is to encourage logistics service providers to consolidate or integrate
their activities to include other services as well as encouraging them to venture into business abroad (MITI,
2007, 2008). As at December 2007, a total of 20 companies have been granted the Integrated Logistics Services
(ILS) incentives, which amounted to RM 4.1 billion (MITI, 2008). As a result of an active development of the
industry, in 2005, the industry, which comprises of transport, storage and communication services contributed
8.8% to the country’s GDP.
4
Third Industrial Master Plan (2006-2020) (IMP3)

Recognising the significance of the logistics sector towards the enhancement of Malaysia’s progress in
industrialisation and international trade, the role and importance of the logistics industry has been officially
mentioned and highlighted in the Third Industrial Master Plan (2006-2020) (IMP3, 2005). The targets
underlined by the government includes the achievement of overall growth of 8.6% by the year 2020, which is
equivalent to approximately 12.1% contribution to the GDP; to increase the total marine cargo by more than
three-fold, air cargo trade by more than two-fold and railway freight by more than four-fold in the year 2020.
Liberalisation of Logistics Sector under Association of Southeast Asian Nations (ASEAN)

At the ASEAN level, ASEAN has embarked on a priority basis to enhance the integration of the logistics service
sector. Specific measures and timelines for integration, liberalisation and facilitation of the logistics sector have
been outlined in the ASEAN Roadmap for Integration of Logistics Sector, which includes:
 The coverage of logistics services for liberalisation;

 Issues related to trade and customs facilitation;
 Expanding the capability of ASEAN logistics service providers;
 Human resources development; and enhancing multimodal transport infrastructure
investment.
The Ministry of International Trade and Industry (MITI) are taking responsibility to meet the liberalisation
targets under ASEAN (MITI, 2007; 2008).
Malaysia Logistics Council (MLC)

Parallel to the establishment of the liberalisation; at national level, the Malaysia Logistics Council (MLC) has
been launched in order to strengthen and promote the crucial logistics services in Malaysia. MLC provides
leadership for the overall coordination of strategies, policies, regulations and rules associated with the
development of the logistics industry (NST, 2006; Business Times, 2006). Four (4) focus groups representing
the maritime transport services; land transport services; air transport services; and ancillary logistics and supply
chain management are helping MLC in achieving its mission. Human resource development (HRD) is also
crucial in ensuring the activities of all logistics sectors are developed in a coordinated manner.
The setting up of MLC involves a strategic partnership with the private sector. These partnerships provides a
structured platform for both the private sector and government agencies to work together in addressing
challenges facing the industry as the industry gears itself towards global competitiveness. The members include
the leading industry figures, academics, and technocrat whose inputs and expertise are expected to contribute
significantly to the development of the sector. In line with the targets underlined in the IMP3, the specific
responsibilities of the Council are:
 To provide leadership in the overall development of the logistics industry, as well as

coordination and implementation of policies and programmes;
 To monitor the implementation of programmes and activities of the respective ministries, state
governments and authorities involved in the development and promotion of the industry; and
 To ensure that the development of the industry is in line with the overall strategic thrust of the
IMP3 (MITI, 2007).
5
3.1 Current Trends in Logistics Practice in Malaysia
Within the last decade, several changes have stimulated interest in developing logistics and supply chain
management, in which several trends have taken place. First, companies have now realised that logistics
function could play a prominent role as a strategic tool in gaining competitive advantage. Consequently, the
tendency towards keeping low inventories to reduce the cost of storage, as underlined by the production
concepts such as Just-In-Time and Zero-Inventory became obvious. Thus, logistics activities have become a
concern of Chief Executives and Managing Directors of many companies, rather than the logistics managers
previously (MIMA, 2008).
Second, in a recent Seminar on “Enhancing the Competitiveness of the Logistics Industry”, it was highlighted
that there has been a key trend that many manufacturers outsource their production function worldwide to
achieve cost competitiveness as well as to attain economies of scale. A cost-effective management of logistics
and supply chain is extremely crucial among the companies in satisfying the demand of their customers as well
as to attain competitive advantage (MIMA, 2008).
Third, the outsourcing of the production function has also led to the outsourcing of logistics activities. Many
multinational companies, such as the automobile, electronic and electrical companies have outsourced their
logistics activities to third party logistics (TPL) service providers to enable the companies to focus on their core
business (MIMA, 2008).
Accordingly, these changes create further opportunities for value creation that could significantly enhance the
economic growth.
4 RESEARCH METHODOLOGY
This study is the preliminary study on logistics and supply chain in Malaysia. As has been emphasised earlier,
there is not much information available about the logistics and supply chain industry in Malaysia. Thus, it
should be noted here that this paper is developed based on scant literature, which was mainly from the
documents and websites. To support the limited information, five (5) preliminary telephone interviews have
been conducted. Each interview took less than an hour. The questions were specified to the background of the
informants, the industry they are in and the most critical problems they have encountered in their daily
operations (refer to Table 3). The informants have been selected based on the researcher’s network using the
snowballing technique. This is due to the fact that knowing the informant well is very important in Malaysian
culture in order to get the comprehensive picture, “true and real” issues from them.
Table 3: The Background of the Informants
Length of experience in
Position Industry Type of Companies
the industry
Electronic and
Logistics Officer Manufacturer Less than 5 years
Semiconductor
Logistics service provider –
Director/Owner Agriculture More than 20 years
Lorry operators
Director/Owner Logistics Forwarding agent More than 10 years
Automotive
components Automotive Manufacturer & Assembler Less than 5 years
Executive
Director/Owner Construction Contractor 10 years
6
5 RESULTS AND ANALYSIS
Based on the preliminary interviews and the literature review, the issues of the logistics and supply chain
industry are highlighted.
The Logistics and Supply Chain Issues in Malaysia

Despite the potential growth of the industry, the Malaysian industry players have identified various issues
resulting from the fragmented development of the logistics and supply chain practices as well as the
uncoordinated implementation of its regulation. They urged the government to resolve these issues before the
country can fully realise its aspiration to become a logistics hub in the region (MPC, 2008; Thong, 2007;
MIMA, 2004; Anonymous, 2003). The issues, among others are:
 Lack of follow up actions and coordination

While there have been numerous meetings and discussions on issues raised, monitoring and follow up
actions have been lacking in rectifying the situations. Issues involving one sector have not been looked
into in total as to how it will affect other sectors. Thus the information gained could not be shared by
other parties in the industry. This could be mainly because of the inexistence of local branches
especially at the important corridors throughout the country, for example the Northern and Southern
area (Thong, 2007). This is crucial for the newly set up MLC in allowing any coordination actions to
be taken.
 Lack of sophisticated management techniques among the supply chain companies.

The rapid development of the industry and the lack of emphasis on service excellence have
consequently given rise to the need for more sophisticated management of the supply chain companies.
This is a challenging task for the companies to acquire sophisticated management and marketing
knowledge as well as implementing them in bringing the Malaysian logistics industry upfront (MIMA,
2008; MIMA, 2004).
 The problems with Information Technology (IT)/Electronic Data Interchange (EDI)

The government has made significant progress toward its vision in integrating the industry players
towards establishing a fully paperless custom clearance and trade facilitation through EDI. However,
problems still arise with regard to the (1) costly EDI pricing and charges due to in transparent mark-ups
by the freight forwarders, and (2) overall performance and functionality of the system (MIMA, 2008;
MIMA, 2004; Anonymous, 2003). It is important to strengthen the linkages and integration among the
transport and logistics networks at promoting an efficient logistics practice and development through
the establishment of e-logistics.
 Lack of skilled and trained manpower

Both the Northern and Southern Freight Forwarder Associations highlighted that the existing hauliers
do not have appropriate experiences and skills in introducing the new services and bringing innovative
solutions to the higher-end clients (MIMA, 2008; Thong, 2007; MIMA, 2004). As indicated by the
forwarding agent:
“The forwarding agent operators normally do not have basic training in logistics, but only from their
experience. Therefore they are not pro-active in providing solutions to the clients… ”
 Lack of dissemination of information with regard to the development and expansion of the
logistics industry
The activities of various sectors have not been made known to all sectors and thus hindered the
possibilities of joint-venture and working together towards the same direction. (e.g. as to how their
services and facilities can be channelled towards the success of the proposed development and
contribute towards positive participation). It is important because through the information obtained, the
practitioners can then suggest on how they can participate in the new business opportunities (Thong,
2007).
7
 No single established source of logistics data and information

Presently, there seems no single established source of logistics information and data is available. Each
sector has its own limited data. For example:
“There is no one stop centre, which can provide information to the logistics operators [e.g. there are so
many places/offices to refer in managing logistics].”- Forwarding agent
There is also a lack of information of the industry players, facilities, services and capabilities of the
sectors (MIMA, 2008). A record of such useful information is important so that the coordinating body
could analyse the shortcomings of each sector and suggestions to rectify such weaknesses. The
expansion plans, new IT enhancements and expansion of activities of logistics providers, both
international and local should be more transparent to the industry players so that they are updated to the
latest news of the industry (Thong, 2007). The industry database is also crucial for accurate assessment
of the industry, better monitoring, assisting company in investment decision, and improve decision
making (MIMA, 2004).
 Lack of assistance to local service providers (LSP)

One of the main problems faced by the local service providers is the inability to participate in
international logistics activities as a result of limited IT linkage, overseas corporate network and capital
investment (Thong, 2007). Although International Freight Forwarder (IFF) exists in the market,
however their existence is not helping the local service provider. This is because IFF is not transparent
to the local service providers in terms of sharing their knowledge and development plans towards
enhancing the industry (Thong, 2007). The limited range of logistics services would restrain the
growth of small domestic market. As a result, they only confine to operate within the nation’s borders
(MIMA, 2008). As emphasised by the logistics officer:
“In the electronic and semiconductor industry, a lot of product defects occurred during the delivery
process resulting from the weakness of the logistics service provider….. and a lot of cases happened
where the components did not reach on time as agreed in the initial contract”.
 Lack of research and development (R & D) of the industry

Although both the practitioners and the academics are increasingly aware of the importance of logistics
and supply chain in Malaysia, however the field is still under research. It is important to prioritise
research and development so that various weaknesses in the industry could be identified and improved.
For example, one of the informants (Logistics Officer) indicated that “the lack of Key Performance
Indicators in the semiconductor industry has caused a lot of problem in the manufacturing process as
well as meeting customer satisfaction”. The R & D Centre could also become the focal point for
advanced research in the field of logistics, supply chain and transportation management.
.
 Lack of regulatory forms to facilitate the industry
A unified and standard form of regulatory implementation is still lacking resulting to various loopholes
throughout the process. Therefore, a comprehensive approach in standardising the regulatory forms is
vital as to facilitate the smooth movement of freight through national and international logistic chains
(MIMA, 2008; Anonymous, 2003). The forwarding agent claimed that:
“The frequent changes of procedures imposed by the authority always put the operators in trouble”
and,
“Although there are many rules and regulations imposed by the Customs in clearing goods, however,
these rules would not be able to stop any „cheating and discrepancy‟ to occur…”
The Lorry operator also highlighted that:
“The conflicts among the authorities occurred during the enforcement of regulations resulting to the
unethical method of problem solving and delay in the delivery”.
 Other issues
There were also other issues highlighted by the informants such as the lack of support given to the
automotive industry in the full implementation of Just-In-Time (JIT) concept. The problems are related
to the geographical constraints faced by the vendors. As claimed by the Logistics Executive, “some of
8
the vendors are not located near the manufacturer/assembler plant resulting to the improper
implementation of the JIT concept especially the timeliness aspect…”.
The understanding of the concept of logistics and supply chain is also limited. Presently, the concept of
logistics and supply chain is only applied to the flow of materials and goods in the manufacturing
industry, whilst the efficiency of the concept are also crucial to the construction sector in terms of the
flow of construction materials and parts supplies. As mentioned by the Director of a contractor’s
company, “Management efficiency of the building materials and parts supplies should be viewed from
supply chain perspective as a whole that is the flow of materials from suppliers – subcontractor – main
contractor…”
6 DISCUSSION
The overview of the current development, changes and issues in the logistics and supply chain sector in
Malaysia provides several insights to the present situation of the industry. The review of issues opens up
numerous areas for research as well as identifying its priorities. The issues highlighted by the informants and
the review from the scant literature reflect the fragmented nature of the industry. Consequently, it poses
numerous challenges to all levels of relevant parties ranging from the top management i.e. the policy makers and
government agencies down to small logistics-related companies.
Studies in other countries should therefore become the guidelines in establishing strategies to restructure and
reshape the Malaysian logistics industry. As suggested by Stock (1997), strong theoretical foundation in various
contemporary research, developments and findings in the previous studies that are potentially relevant to the
examination of various logistics issues in Malaysia context could be applied without having to reinvent the
wheel. In line with Gundlach et al (2006), Lambert et al (1998) and the definition of logistics management by
CSCMP, it is suggested that the issues in the logistics industry in Malaysia could be viewed in four (4) different
perspectives, namely (a) the policy related issues, which concerns with planning, implementation and control (b)
the supply chain logistics, which concerns with the flow of goods, (c) service response logistics, which concerns
with the flow of service, and (d) the flow of information (refer Figure 1). The categorisation of issues is
important in identifying which party is responsible to the issues to ensure that the issues are addressed and
within the control of the relevant party.
Operational logistics
(Flow & storage of goods)
- Lack of skilled and
trained manpower
- Lack of sophisticated
management techniques
- The need to boost R & D
in technical and
operational issues
Service response logistics

(Flow of services)
Policy –related issues - Lack of sophisticated
- Follow up actions and management techniques
coordination - Lack of skilled & trained Logistics Output
- Efficient regulatory manpower - Competitive advantage
procedures, rules and - The need to boost R & D - Efficiency
regulations in dealing with soft
- National/local agenda issues
Information logistics
(Flow of information)
- Efficient IT/EDI
- Dissemination of
information
- Database
Figure 1: The Structure of Logistics and Supply Chain Issues in Malaysia
9
Secondly, the issues raised up from the preliminary study reveal the crucial role need to be addressed by the
policy makers. It is because some of the problems and issues emerged from the changes in policy imposed by
related authorities has given direct impacts to service efficiency offered by the industry players (refer to Figure
1).
Third, the approach to tackle the issues in the industry should be viewed from a holistic approach across
industrial sectors rather than fragmented in nature. For example the application of information technology to the
whole industry could be a solution to various management and efficiency issues.
Finally, collaborations in learning and research and development (R&D) should be strongly encouraged between
the industry and academics in dealing with human resource issues as well as other issues. It is obvious that the
investment in human resource development should be given priority as they do in capacity expansion due to the
fact that the level of professionalism in the industry should be enhanced in meeting the needs of the industry.
The willingness and effort of various universities in offering logistics-related courses in meeting those needs
could be a platform for those collaborations, in which the practitioners should be made aware of the importance
of Continuing Professional Development courses in enhancing the skills and knowledge of the existing
practitioners. Collaborations in R & D, on the other hand could help the industry in introducing and improving
various techniques and technologies in the operational as well as the management aspects.
7 SIGNIFICANCE OF THE STUDY
With exception to a few studies, not much have been studied and published on the logistics and supply chain
industry in Malaysia. With a very limited information and scant literature available, this paper attempts to open
up various issues surrounding this complex and fragmented industry. It thus, provided a base for future
researchers to examine any aspects of logistics and supply chain management in Malaysia.
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EASTS International Symposium on Sustainable Transportation incorporating Malaysian Universities Transport Research

Logistics and Supply Chain in Malaysia: Issues and Challenges

Rosena Md Ali1, Harlina Suzana Jaafar2*, and Sabariah Mohamad3

Keywords: logistics, supply chain management, logistics issues

2.1 Logistics Management

Table 1: The Development of Logistics Management

2.2 Supply chain management (SCM)

Table 2: The Development of Supply Chain Management

However, some commonalities appeared on two aspects:

3 BACKGROUND OF LOGISTICS AND SUPPLY CHAIN IN MALAYSIA

Third Industrial Master Plan (2006-2020) (IMP3)

Liberalisation of Logistics Sector under Association of Southeast Asian Nations (ASEAN)

 The coverage of logistics services for liberalisation;

Malaysia Logistics Council (MLC)

 To provide leadership in the overall development of the logistics industry, as well as

3.1 Current Trends in Logistics Practice in Malaysia

Table 3: The Background of the Informants

5 RESULTS AND ANALYSIS

The Logistics and Supply Chain Issues in Malaysia

 Lack of follow up actions and coordination

 Lack of sophisticated management techniques among the supply chain companies.

 The problems with Information Technology (IT)/Electronic Data Interchange (EDI)

 Lack of skilled and trained manpower

 No single established source of logistics data and information

 Lack of assistance to local service providers (LSP)

 Lack of research and development (R & D) of the industry

Service response logistics

Figure 1: The Structure of Logistics and Supply Chain Issues in Malaysia

7 SIGNIFICANCE OF THE STUDY

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