Review of the existing inbound & outbound logistics functions at Proton Automobile Malaysia

Author: Iloka Benneth Chiemelie

Published: 24-july-2016

CHAPTER 1

INTRODUCTION

Background of the project

There is a growing need for corporations to understand the risk associated with their business process and this is because the modern business environment is full of risk as a result of the increase in outsourcing, globalization of supply chain, and shortened product life-cycle (Barry, 2004; , 2007; Christopher et al., 2011). Risk in the business process has been associated with a number of negative influence with one of such being that it makes the supply chain more complicated and more sensitive to time than it has even been in the past, and as such there is a need for companies within the supply chain to establish strategic corporation with their main suppliers and customers in order to enhance their survivability, competition and business growth (Bowersox et al., 1999; Frohlich and Westbrook, 2001; Zhao et al., 2008; Flynn et al., 2010). One of the key values in supply chain management is the integration of supply chain (Horvath, 2001) which deals with establishing a form of link between all the processes in the supply chain, with logistics being the most influences of such processes.

Supply chain integration is considered by a number of researches to be a very powerful tool that can be used to gain competitive advantage, but this tool still comes with a number of unanswered questions as to how it can be implemented (Bowersox et al., 1999; Frohlich, 2002; Power, 2005; Flynn et al., 2010; Zhao et al., 2011).

Logistics is part of the supply chain management and it deals with the movement of goods and services within the system in order to ensure that customers’ needs are meet by providing the goods and services that will meet these needs in the processes. Logistics is very important in the supply chain management processes as it had a direct influence on productivity and availability of the finished goods. The logistics part that deals with the movement of raw materials for production from the respective suppliers to the producers is known as inbound logistics (which covers all raw materials that are delivered into the company), while that aspect of logistics that deals with the movement of finished goods to the respective customers through the distributors is known as the outbound logistics (which deals with making the finished goods available for consumption). No matter how they are being looked at, there is a need to understand that sustainability will not be ensured in the business processes without the proper management of logistics in the business.

The basic notion for such argument is based on the understanding that the raw materials needed to be made readily available in order for the production to take place, and the finished goods needed to be made available in order for the production to be complete. In the economic setting, production is considered complete only when customers make purchases for the finished goods for the purpose of satisfying their own wants.

On that account, it can be seen that the management of logistics in terms of both the inbound and outbound logistics have a direct influence on the productivity and profitability of the company as proper management will allow the company to increase its production and supply and as such increase its revenue and profitability. As such, this is the main purpose of this paper, which is designed to understand the management of supply chain in Proton Malaysia.

The foundation for establishing proton was conceived by the former Prime Minister of Malaysia Dato Seri Dr Mahathir Mohamad, who also went on to launch the Perusahaan Otomobil National (Proton) in 1983. Proton manufactures, assembles and sell motor vehicles and related products, including accessories, spare parts and other components. By 1985, a history was made in the Proton world as the auto-maker achieved its main objectives to build a national car by launching the Proton Saga (MPI). It is the first locally made vehicle in Malaysia, and is still available for sale in both Malaysia and other parts of the world today (Proton, 2011).

Figure (1): First proton car (Proton Saga MPI) and Logo

Source as adapted from: Proton (2011)

Following the launch of Saga, Proton automobiles have been made available in over 50 countries, with the main markets as: the UK, Australia, Singapore and the Far East. Proton’s main and first plant, with 99,400 sq m, is located at Shah Alam a close proximity with Kuala Lumpur. This plan also houses the engine and transmission factory, a casting plant, R&D center and a semi-high speed test track (Proton 2010).

Proton presently houses over 6, 000 personnel in its workforce, and acquired 100% of Lotus share in 2003 – which is a measure steps towards upgrading its engineering. Since the acquisition, lotus engineers have been collaborating with Proton in its new product designs, under the Lotus team that is permanently based at the design and development center in Malaysia (Proton 2010). Its model line-up includes the Waja, Satria GTi, Wira, Iswara, Arena, Perdana V6 and Juara. The products offerings are as illustrated below

Since its inception, the company has moved to achieve a number of successes in the industry in both the local and international scene. The most significant of such comes in the form of the company’s acquisition of lotus which is an UK based luxury car. The move has also been moved to successful establishment of presence in European, African, Arabian, Asian and American contents. Such a strategic and huge dive into the automobile industry makes the Proton a force to beacon with in the future. As such, understanding their management of inbound and outbound logistics is very important in order to understand whether the company is better positioned for sustainable business success.

Justification for the chosen topic

Malaysia is moving towards its dream of becoming an advanced and developed nation by 2020 and the push is through advancement in technologies, the development of new and innovation production system and increase in level of employment. Proton is highly valued in the country for a number of reasons that come in the form of their ability to ensure sustainability in economic development, growth and employment because they are one of the biggest employer and most successful Malaysian firm in the country. On that account, understanding how sustainability can be maintained in the company is very important because it would help to ensure the right platform and environment for increased growth, productivity and sustainability in both the Malaysian economy and Proton.

The justification for choosing the topic is not primarily based on the notion that it would enhance the understanding of how the company can increase sustainability and profitability, but other reasons comes in the form of contribution that the paper will yield in understanding the logistics management approaches in the automobile industry with special reference to the management of inbound and outbound logistics. As such, the paper will be beneficial to managers by highlighting best approaches and how to tackle weaknesses in order to further ensure sustainability in their business. As such, this paper is justifiable because it will help the managers in the automobile industry to understand how to manage their logistics for sustainable growth and determine whether Proton has adopted the right logistics functions.

Research objectives

Basically, the objectives of this paper are as highlighted in the background analysis to include:

1.      Conduct a review of the inbound and outbound logistics functions in proton; and

2.      Understand if the functions are capable of ensuring sustainability in the business process, providing necessary recommendations in cases where such approaches have limitations of ensure sustainability.

Research question

The questions to be addressed in this paper is aligned with the research objectives and geared towards ensuring that the paper is able to meet set objectives. These questions are as follows:

1.      What are the inbound and outbound logistics functions in Proton Automobile?

2.      Are these functions capable of ensuring business sustainability in the company?

3.      How can the weaknesses in these functions be improved to further increase the chances of business sustainability?

Limitation

Although it must be recognized that this paper has high potential of improving the supply chain management approaches in Proton automobile by highlighting the weaknesses in the present functions and recommendations on how such weaknesses can be improved, there is also the need to understand that this paper is limited in scope. While the concept of supply chain management is broad in terms of defining numerous approaches in the business process, this paper only focuses on understanding the logistics aspects of it and as such it is limited the potential for discussing about and understanding other aspect of supply chain management.

Organization of study

In order to meet the set objectives as described above, this paper will be divided into five sections to cover every aspect of the research processes. The first of such is the introduction and it focuses on defining the approaches that will be followed in the research, determining the research objectives and providing the guideline for the whole research process.

The second section is the literature review, and the focus of this section is to present a background understanding of theories that exist in relation to the research topic. In this section, the research topic is defined in terms of what it generally mean in both the research and practical world.

The third section is the research methodology and it provides the guideline for gathering data and analysing gathered data in the primary research. There is a need for primary research to be conducted as it is the only approach from which it can be determined where the company is actually undertaking its inbound and outbound logistics as contained in the theories.

Following the third section is the fourth section, and it is in this section that the gathered data is analysed in terms of understanding how the practical finding in the company relates to what is obtainable in literatures. The fifth section is the conclusion and discussion section, which presents a summary of what has been found from the research and determines if the research has been successful in meeting set objectives.

CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

The main purpose of this section is to present a review of relevant literature related to the research topic. On that account, the literature reviews will revolve around understanding the concept of supply chain management, analysing logistics as it related to inbound and outbound logistics and how logistical functions can be managed, and presenting related aspects of supply chain management in relation to supply chain integration and supply chain risk management.

2.2 Logistics and industries

The supply chain network of the automobile industry is one of the idea cases studies in the logistics field and this is because it very complex in nature and also the extent of associated problem is very broad. It comprises of a whole network of multiple suppliers, manufacturing plants, sub-assembly plants, assembly plants, customers, warehouses, dealers, and distribution centres. The vast nature of this supply chain structure means that the flow of information and logistics is the most vital functions for ensuring a comprehensive coordination between firms in the manufacturing industry and the supply chain system (Shyam, 2011).

Logistics has a vital role to play in economic development and the enhancement of competitiveness in the three sectors of the economy; agricultures, manufacturing and services (Viswanadham et.al, 2003). In a study that was conducted on a global crude oil transportations, the researchers went as far as developing a decision support system that they used to investigate and improve the combined inventory and transportation system in a representative world-wide crude supply problem (Duran et al. 2010). The decision support system is based on the integration of discrete event simulation and the control of the transportation system through a stochastic optimal control system. A uniform simulation framework that is used for the purpose of integrating the simulation model and control unit is constructed in order to simulate the controlled transportation system. It provides the users with the right framework for understanding how information flow in the system can be enhanced and helps to highlight issues that will negatively influence the free flow of the logistics system. The outcome in the end is a well-coordinated logistics system that is capable of delivering effectively and efficiently towards the overall positive performance of the company.

2.3 Inbound and outbound logistics in the automobile industry

Logistics as its name implies entails the movement of goods and resources from one location to another. In the case of the automobile industry, it can be defined in line with Geoff (2008) as the movement of raw materials (inbound) from the point of mining to production plant for the production process, and the supply of finished goods (outbound) from the manufacturers to the final consumers. While the definition seems simple, the activities involved include a number of roles that must be played by different people and department in the auto-company in order to make the logistics function successful. These roles are as described below.

2.3.1 Inbound logistics functions in the automobile industry

From the above figure, three players have been called to focus and they will be used to analyse the inbound logistics functions in the automobile industry as presented by Geoff (2008).

2.3.1.1 Suppliers – the functions of suppliers is to make available the needed raw materials that will be used for production to either the research and development unit or directly to the plant (Geoff, 2008). Delivery are made to the research and development centre in cases where the raw materials are still in the test phase, while delivery are made directly to the production plant in cases where the raw materials have already been approved for adoption in the production process. Suppliers are given set guidelines in terms of quality and quantity for their delivery functions

2.3.1.2 RDC – the research and development centre is part of the inbound logistics functions (Geoff, 2008). The raw materials are made available to for production once it has been approved as capable of supporting, enhancing or replacing the existing ones effectively and efficiently.

2.3.1.3 Plant – the function of the plant in the automobile industry is basically the same in order industries and it is to transform the raw materials into finished products (Geoff, 2008). Issues experienced in terms of quality are referred back to the suppliers and RDC for proper amendments.

2.3.2 Outbound logistics in the automobile industry

Figure 2.3: Outbound logistics functions in automobile industry

Just like the inbound logistics, there are also three players in the outbound logistics and they are as described below

2.3.2.1 Plant / Manufacturer – basically, the role of the manufacturer has been described earlier as transforming raw materials into finished goods. However, this role changes in outbound logistics and their role is to make finished goods available to the final consumers. This is done either through the distributors or directly by the manufacturer. They also have the role of gathering and analysing feedbacks, which they will use to improve the overall functionality and value of the products in the future. Another function undertaken by the manufacturer is servicing and maintenance (Geoff, 2008).

2.3.2.2 Distributors – they can be car brokers, sale agents or resellers. They assist the manufacturer in making the finished goods available to the customers at an added price for their own profit (Geoff, 2008). They can be sole agents or operating in partnership with the manufacturers. Their role is very important for the sales of goods and revenue generation because the manufacturer cannot afford to reach the customers in their remote demographic demands.

2.3.2.3 Consumers – in economic setting, production is not considered complete else the finished goods are purchased by the final consumers. This is because it is only by the consumers’ purchasing of the finished goods that the investment on the production process is recovered through the money paid for the value of the goods. As such, the consumers perform the function of ensuring that the production process is completed in the automobile industry. They also return complaints about the goods through their usage and issues noticed in the process of using these products.

From the above analysis, it can be seen that the logistics functions in automobile industry is not that different from what is obtainable in other industries. This is because it basically entails making needed raw materials available for production and making finished goods available for consumption as discussed above.

2.4 Review of the existing inbound and outbound logistics functions in Proton automobile: analysis of problems faced by the auto-maker

Simpson et al. (1998) conducted an analysis of the transitory just-in-time processes at Porton automobile and in their analysis; they presented a case review of the inbound and outbound logistics issues in the company as it relates to limiting the capability of Proton adopting just-in-time production.

2.4.1        Inbound logistics issues in Proton automobile

In terms of understanding the inbound logistics issues, the authors made a reference of 1995 when Proton’s production was stopped for 2 days due to an earthquake in Japan (Simpson et al., 1998). The reason was that the company depends heavily on imported resources from Japan and poor logistics from this country with respect to their suppliers will have a negative impact on the production of Proton, which will also influence the power of the company to meet customers’ demands effectively.

Simpson et al. (1998) noted that the company faces issues arising from its dual sourcing strategy. The indication is that Proton has more than one suppliers for some of its resources, and while the company designed such approach to increase competitiveness amongst suppliers and potential of sustainable production, the company also risk overstocking resources and the commitment of the suppliers are reduced when compare with single source; which then influences the chances for suppliers turnover.

Another issue with respect to the company’s inbound logistics is that it has little notification time framework for manufacturing its car seats (Simpson et al., 1998). The authors made known that Proton only notifies its suppliers in a space of 1 to 2 days for new orders on car seats based on the car design and specifications. This is a very risk approach to business as ay unforeseen circumstances might occur, limiting the potential of the company to meet customers demand as it cannot sale the finished cars without the seats.

2.4.2        outbound logistics issues

The company doesn’t have that much of an issue with respect to outbound logistics; however, there is still the issue of meeting sales objectives. Considering the fact that sales is normally dependent on consumers’ demand, Simpson et al. (1998) made known that some of Proton’s distributor are not selling the products as expected. Coupled with this is cancellation for placed orders and the outcome becomes overstocking of finished products and increase in depreciation.

Summary of findings

From the above review of literatures, it has been found that logistics is an integral aspect of the business process in any given industry. This is because for the production process to be initiated there is an important need for the resources to be supplied. Once resources are made available, logistics plays the integral role of making the necessary production information available. However, its function doesn’t stop there are it proceed with the function of determining the best approaches to distribute finished goods and making these goods available to the respective customers for consumption purposes. Thus, it can be stated that logistics is integral for success in the automobile industry.

CHAPTER 3

RESEARCH METHODOLOGY

Introduction

In line with the definitions presented in the organization of study as contained in the chapter 1 of this research, this research is presently in the methodology design, which is the stage at which the approaches and steps that will be followed in the primary research will be designed. This section will detail information such as questionnaire design and methods for data gathering as well as the difficulties faced in the process.

Reflection of hypotheses

From the review of literatures above, a number of reflections can be made on hypotheses that will be proved in the study. These reflections are:

1.      Logistics is important in Proton automobile because it is the means through which needed resources for production are made available.

2.      Logistics is important in Proton because it is the means through which finished goods are delivered to the customers.

3.      Besides making available needed resources for production and delivering finished goods to the customers, logistics is also important for making production and market information available and as such create competitive advantage through knowledge management.

Research method

This is a qualitative research and it will be based on interview with the company’s logistic manager and questionnaire with its staffs in the logistic department. The idea of a combined study with both the manager and staffs is to ensure that there is uniformity in data gathered as it would reflect positively on the quality of the study. This is because if the manger is saying the same thing as the staffs with respect to the questions addressed in the survey, then it can be said that the finding is highly reliable. Qualitative research is a very unique research method and has been described as having advantages over the quantitative approach to research. One of the advantages is that it allows for expandable questions and answer in the research process. It is more like the classic case of “killing two birds with the same stone.” On the account of such, this method was chosen because it would allow for the respondents to elaborate more on their responses and as such create a broader view of the cases to be considered in the research. The expandability of response will also allow respondents to offer response at the very best of their understanding – which is important for ensuring that quality of the research is maintained.

Survey with questionnaire

For this study, the questionnaire will comprise of 14 direct questions that is designed to gain an understanding of the company’s inbound and outbound logistic functions. The questionnaire will look to understand how it managers the raw materials supplied, warehousing of the raw materials for future uses, the management of production process and its distribution functions. The questionnaire will be attended by the staffs. The questionnaire will be rated with 5-points likert’s scale rating method. The idea is to bring in the idea of expandable response as explained earlier in the response of staffs.

Interview

Besides the questionnaire designed for the staffs, there will also be an in-depth interview with the logistics manager. The in-depth interview will be designed to understand some of the practices and approaches adopted in undertaking the outbound and inbound logistics activities in the company. It is understood that the manager might be very retrospective in answering the questions as to close up any chances of exposing the company’s competitive sphere, which means that the questions will be designed in such a way that it will not be considered sensitive by the manager and the manger will be open to answering them.

Theoretical Framework

Figure 3.1: Theoretical framework for primary research

 

In terms of understanding the meaning of dependent and independent variables, the basic definition is that the dependent variable is the causer, while the independent variable is the outcome of the process. The dependent variable is the factor that influences the process, while the independent variable is the process that was influenced by the factor.

In the case of this research, the dependent variable is the inbound and outbound logistics functions that are undertaken in Proton Malaysia. This is the functions which the company adopts in order to ensure that the needed raw materials are supplied on time and with the set standards, that the raw materials are properly warehoused until they are needed for production purposes, and that the final goods produced are distribute and readily made available to the final consumers. In case where such are on track, the independent variable will emerge from the process. The independent variable that will emerge is an increase in competitiveness as the company will be able to meet demand through effective and efficient supply and distribute the final products to the final consumers – making more money from the process and increasing their overall competitiveness. 

Timing

In the field of academic research, time is a very significant factor and it can be used as a direct measure of success or failure of any given project. This is because once the project has been completed within the stipulated time; it can be described to be a success while the same project can easily be described as a failure if it is not completed within the stipulated time. On that account, the stipulated time frame for this study is a period of 30 days (one month). The need for such is to allow the respondents the opportunity of contributing to the research at their best free time, and also allow the research to re-gather data in cases where the responses are not deemed fit for analyses.

Population, sampling method & sample size

The total number of respondents will be 21, in which one of them is the logistics manager that will participate in the one-on-one in-depth interview, while the outstanding 20 respondents will be staffs in the company’s logistics department. In order to test the potential of the questionnaire to meet set objectives, a sample of 2 respondents from the same department will be given the questionnaire once completed to present their view about the questions designed with respect to ease of understanding, relation to their departmental functions and areas that need further expansions. Once their responses are gathered, the necessary amendments will be made prior to the final questionnaire that will be used in the research process. As stated earlier, the criterion for the respondents to be considered qualified for this research is that they must come from the company’s logistic department as such is the best way they will be positioned to understand the variables loaded in this study and contribute significantly towards the quality of the overall research.

Data collection method

Since this is a project based work, the focus will be to gain an understanding on the inbound and outbound logistics functions. The data that will be analysed in this paper will be gathered through primary resources such as the company’s website. The gathered data will be used to gain an understanding on the current inbound and outbound logistics functions in the company. As such, it can be stated that this will be a primary research that is based on gathering information from primary resources.

For this paper, there will be both interview and questionnaire. The interview will be conducted with the logistics manager in order to gain an understanding of the responsibilities of a logistics manager in terms of ensuring that the inbound and outbound logistics functions in the company well-coordinated. On the side of the side of the questionnaire, it will be used to gain an understanding of the logistics functions conducted by staffs in either the inbound or outbound logistics functions or a combination of both.

Data analysis

Once the data have been successfully collected, the next step will involve conducting analyses of the data in order to determine the extent to which the data reflect the research objective. The data analysis will be conducted with SPSSS statistical tool. SPSS is one of the most commonly adopted tool for analysing collected data and this will not be of any difference in terms of this research. Prior to presenting the actual meaning gathered from the collected data, the tool will be used to measure the reliability and validity of gathered data. In terms of the reliability, this will be conducted with Cronbach’s Alpha, in which any figure above 0.50 will be deemed to be reliable, while those below this value are considered to be unreliable. In terms of the data analysis with SPSS, this will only be applicable to the questionnaire data gathered from the respective 20 staffs in Proton’s logistics department. Following the successful testing of the reliability and validity of the data, the next step will be to conduct a frequency analysis of the gathered data with respect to the amount of respondents that agree with specific statements made in the data gathering process. These findings will then be used to measure the extent of success or failure of the research with regards to how they have been able to highlight the inbound and outbound logistics functions in Proton. The data gathered from the interview with the logistics manager will be analysed directly, reflecting the statement made by the manager with respect to the questions addressed to him. In terms of the logistics functions of the company’s competitors, data will be sourced from primary sources such as the competitors’ official website and then analysed directly.

Summary

This section of the research has been successful in defining the right approaches that will be adopted in the research process, highlighting that the data gathering will come in three different steps. The first of such will be a primary research with the staffs working in the company’s logistics department and finding from the study will be analysed with SPSS. The second will be an in-depth interview with the logistics manger, with the finding being analysed directly as it is reflected in the contributions made. The final analysis is the finding of logistics functions of competitors as sourced from the competitors’ website and other related primary sources. All these data will be used to prove the research objective and determine if Proton is well positioned with respect to what is obtainable form its competitors to handle the increase in competition.

CHAPTER 4

ANALYSIS AND FINDINGS

Introduction

Following the successful gathering of data as demonstrated in the previous stage, it must be stated that this research had reached the turning point in term of defining the meeting its objectives from the outcome of the primary research. This section will analyse all the data gathered in the research process.

Analysis of interview with the logistics manager

Introduction: I am very much happy for the fact that you accepted to partake in this study and it is designed to understand the logistics functions (inbound and outbound) in Proton
Questions 1: Please tell us something about yourself and how long have you been in this position.	I am Mr Tan, Chinese Malaysian and I have been working with Proton for the seventh year now.
Question 2: Seventh year? That must have been filled with numerous experiences. So what is your job all about?	Yeah! You are right. I have learned a lot from the job and my job is to coordinate the supply of raw materials and distribution of finished goods through our supply chain network.
Question 3: what is the supply chain network all about and how is it managed?	Basically, it can divide this into supply and distribution. The supply aspect deals with making the needed raw materials available for production ready as per demand, while the distribution aspect of it deals with distributing the finished goods to our respective dealers who then make it available to the customers. The management of our supply chain is very unique in the sense that it is well integrated into the overall management of the company. We understand that without the raw materials there will be no production and without sales there will be no returns so we need to not only produce but to also sale. The management if based on our code of business ethics, which sets standard for the quality of raw materials to be supplied and the services rendered by the distributors.
Question 4: how about warehousing raw materials and finished goods.	The warehousing aspect is more prominent with respect to raw materials. This doesn’t mean that we don’t warehouse finished goods, but there is a need for the raw materials to always be available in terms of a sudden change in demand. We own our own warehouse across Malaysia (especially in the production plants) and we also have sourced warehouses with our partners. Warehousing is managed by another department (warehousing department) but I can tell you that it is also integrated with the logistics. Once we need new materials we will alert them and they will make it available.
Question 5: the last question is how Proton manages its sales and supplies in order to ensure sustainable business.	Of course we understand the need to remain competitive in order to ensure sustainable business operations and this is part of our logistics designed. We work together with our suppliers and even organize suppliers meetings and conferences to understand the issues these people face and give them the necessary support to ensure that they help us create sustainability in their functions, which will then lead to an increase in the sustainability of our business process. As such, the right word is through “suppliers’ integration.”

Analysis of finding from questionnaire

Test of reliability

Table 4.2: Case Processing Summary
		N	%
Cases	Valid	20	100.0
	Excludeda	0	.0
	Total	20	100.0
a. Listwise deletion based on all variables in the procedure.

Table 4.3: Reliability Statistics
Cronbach's Alpha	N of Items
.357	15

From earlier indication, it was made known that the reliability of this research will be tested with the value of 0.50, which is the standard value for measuring reliability of research – in which the gathered data is considered reliable if it at least 0.50 in the case where the higher the value the high the reliability. In the case of this research, the reliability is 0.4 approximated but that doesn’t make the research void. This is because it can be seen that the data gathered is valid. The reason for the lower reliability can be deemed as a result of small volume of respondents used in the study (20).

Descriptive statistics

Table 4.4: Department of respondents
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	logistics	20	100.0	100.0	100.0

Before proceeding to ask the respondents any question, it was deemed necessary to know their department in order to ensure that they meet the criterions for responders as set earlier in the research methodology. From the finding, it can be seen that all the respondents are from the logistics department, which is the department that is contained in the criterion for respondents.

Table 4.5: Gender of Respondents
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	male	16	80.0	80.0	80.0
	female	4	20.0	20.0	100.0
	Total	20	100.0	100.0

The next steps is the gender analysis and it can be seen that most of the staffs in the logistics departments of Proton automobile are males as they make up 80% of the respondents which the females respondents account for the outstanding 20%.

Table 4.6: Years worked with Proton
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1 year	2	10.0	10.0	10.0
	2 years	5	25.0	25.0	35.0
	3 years	4	20.0	20.0	55.0
	4 years or more	9	45.0	45.0	100.0
	Total	20	100.0	100.0

Another factor that can play significant role in the response pattern is how any years the respondents have been working with the department. It can be seen from the above analysis that 45% of the respondents have worked in the department for at least 4 years or more, followed by 2 years (25%) and those with 3 years of experience (20%), with 1 year (10%) making the least year of experience in the department.

Table 4.7: What type of logistics functions are in the company?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	all	20	100.0	100.0	100.0

The factor loaded includes inbound logistics, outbound logistics, and warehousing, with the respondents identifying all these factors to be part of the logistics functions conducted in the company.

Table 4.8: What is your primary role in the company?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	inbound	10	50.0	50.0	50.0
	outbound	10	50.0	50.0	100.0
	Total	20	100.0	100.0

The fact that inbound and outbound logistics represents 50% of the total respondents is not by coincidence. This is because they were picked to represent such figure in order to ensure equality in terms of response opportunity and a more open response system. 

Table 4.9: Are you currently undertaking any logistics functions?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	20	100.0	100.0	100.0

From the above analysis, it is clear that all the respondents are currently engaged in logistics functions, which puts them in better position to contribute significantly in the research as their current activities can easily be reflected in the questionnaire designed for this study.

4.10: What kind of inbound logistics are in the company?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Delivery monitor	20	100.0	100.0	100.0

All the respondents agree that all the loaded inbound logistics functions are presently being undertaken in the company. The loaded inbound logistics functions are:

1.               Goods receipt

2.               Determination of external demand

3.               Advanced shipping notification

4.               Delivery monitor

5.               Yard management 

6.               Returns Handling

Table 4:11: What kind of outbound logistics are in the company?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Value added services	20	100.0	100.0	100.0

Just like the inbound logistics, the responders also agree that all the outbound logistics functions loaded into the questionnaire are presently being undertaken in the company and these functions include:

1.               Goods issue

2.               Delivery processing and distribution

3.               Proof of delivery

4.               Value added services 

5.               Delivery Monitor 

Table 4.12: Our suppliers are integrated into the production process to create awareness for out of stock resources
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Agree	9	45.0	45.0	45.0
	totally agree	11	55.0	55.0	100.0
	Total	20	100.0	100.0

Earlier on, supplier integration was linked to success in the literature review and it was made known that it influences success positively because the suppliers will be more aware of needed recourses and will effectively supply them for production. The respondents agree with such from the analysis above.

Table 4.13: Suppliers are monitored under the code of business ethics functions in order to ensure that they operate their business in line with set standards
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	totally agree	20	100.0	100.0	100.0

The logistics manager also noted that suppliers are properly monitored under the code of business ethics in order to ensure that they undertake the supply function in line with the defined code. The respondents also agree with this statement as all of them ticked “totally agree”.

Table 4.14: The standards for resources to be supplied are very high – which is a reflection of the company’s objectives on quality
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	agree	6	30.0	30.0	30.0
	totally agree	14	70.0	70.0	100.0
	Total	20	100.0	100.0

In terms of maintaining competitiveness through quality supply chain management, it has been noted by the respondents that the quality of the suppliers are very high and it’s in line with the company’s mission of maintaining a sustainable business through higher customer satisfaction that is built in quality product and service delivery.

Table 4.15: The performance of suppliers is used to determine the renewal of their supplier licence
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Agree	4	20.0	20.0	20.0
	totally agree	16	80.0	80.0	100.0
	Total	20	100.0	100.0

Another factor that need to be understood in terms of measuring performance of suppliers is how it influences the company’s decision to renew and it can be seen that the company uses performance to determine whether to not to renew licence for suppliers – in which the higher the performance, the higher chances for future renewal.

Table 4.16: Our distributors are integrated in the production process in order to ensure ease to meeting the demands of customers
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	totally agree	20	100.0	100.0	100.0

Just like the supplier, the distributors are also integrated into the business process of the company, in order to ensure that the demands for their products and services are well meet.

Table 4.17: We have set guideline for licensing distributors and managing their performance
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	agree	4	20.0	20.0	20.0
	totally agree	16	80.0	80.0	100.0
	Total	20	100.0	100.0

Table 4.18: In order to reduce potential for wastage, productions are based on reflected demands from distributors.
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	totally agree	20	100.0	100.0	100.0

The respondents agree that the company operates under set guidelines for its distribution network in order to ensure that quality is not something that ends in the production process, but is something that is extended into the distribution aspect of the business. Additionally, the company bases production on demand from distributors in order to avoid wastages.

Competitive analysis

Similar with the discussions from Iloka et al. (2012), it is clear that Proton has created the right atmosphere for increased competition in the automobile market through a subsequent adoption of a unique supply chain management that integrates the suppliers and distributors in the business process with the objectives of ensuring that needed raw materials are readily available and that the finished good are made available according to customers’ demands. As such, the inbound and outbound logistics in Proton has been designed to ensure sustainable business process.

CHAPTER 5

CONCLUSIONS & RECOMMENDATIONS

Earlier on, the purpose of this research was stated to be to conduct a review of the inbound and outbound logistics in Proton automobile. Logistics is part of the supply chain management in company and it deals with making available the necessary materials needed for production and distributing the produced goods in order to ensure return on investment. Production is not considered to be complete is the produced goods have not reached the final consumers as it is these consumers who will make purchases for the goods and as such generate wealth for the company.

Following the setting of research objectives, it was also made known that the research will be conducted in two aspects. The first is the secondary research which is designed to review existing literatures and theories in relation to the research topic. The second is the primary research which is designed to understand the concept of inbound and outbound logistics management as it is applicable in the case of Proton automobile. Forms the analysis, the findings are that inbound logistics in the company comprises of:

1.      Goods receipt – once the needed raw materials are received in the company, they are documented with respect to the suppliers, quantities supplied, standard and the schedule of supply.

2.       Determination of external demand – once the resources have been delivered, the company will see to understand the demands of the customers and build their production based on this understanding in order to ensure that the satisfy the customers and don’t over produce goods.

3.      Advanced shipping notification – the fact is that most of the company’s resources are sourced outside Malaysia such as China, South Africa, and other Asian countries. On that ground, the company creates awareness for its shipping units on the locations of the resources and make necessary arrangement for the goods to be shipped into its production plant in Malaysia.

4.      Delivery monitor – once the resources have been shipped from their respective locations, the company will also monitor the resources in order to ensure that they are carefully delivered to the plant for production.

5.      Yard management – upon arrival, the resources are carefully checked in order to ensure that they meet the details in terms of standards, quality and functionality contained in the order receipt. Goods that meet these features are accepted for production while those that don’t meet these features are rejected in the process.

6.      Returns Handling – this function entails returning the rejected goods back to the suppliers, and all returned goods have attached details on why they were returned to the suppliers.

While the outbound logistics comprises of:

1.      Goods issue – this entails receiving orders from their respective distributors and brokers with respect to the demands of customers.

2.      Delivery processing and distribution – once the demands have been received, the company moves to process the order based on the demand received as well as determine how the goods will be delivered to the respective distributors. These goods are then distributed to the respective agents for sales to the final consumers.

3.      Proof of delivery – once the goods have been delivered, the agents need to sign the proof of delivery and this prof of delivery will then be sent back to the company for legal protection purposes.

4.      Value added services - the company also works with the agents to determine the best way of handling the goods in order to make them available to the final consumers. Other value added services include supply of maintenance system in order to meet the delivery of warranties.

5.      Delivery Monitor –the delivered goods are also monitored in the process of delivery in order to ensure that they reach the distributors safely without any harm.

Another analysis was conducted to understand how effective the logistics functions are in line with the functions obtainable in the automobile industry and it was found from the discussion presented by Iloka et al. (2011) that they are well aligned in the industry, which now means that Proton automobile has set the right platform for ensuring sustainable business through a sustainable supply chain management. As such, it can be concluded that Proton has well aligned its functions with what is obtainable in the industry and as such sustainability is the expected outcome.

Although business sustainability can be ensured through a subsequent management of the supply chain, it must be noted that that other factors such as marketing mix, competitors analysis and customer relationship management also need to be considered. As such, it is recommended that Proton should look into these factors in order to ensure that they can better create sustainable business in all aspects of the business process.

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