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CHAIRMAN’S DELIVERING MSM MANAGEMENT DISCUSSION GROUP FINANCIAL
STATEMENT VALUE OVERVIEW & ANALYSIS REPORT

buSINESS REVIEW

MAINTAINING MARKET LEADERSHIP Mindful that emerging lifestyle trends towards reducing
sugar consumption will impact the Wholesale market,
The core objectives for Supply Chain Management in 2020 the Group is also consciously diversifying into more products
was to improve on delivery timeframes, reduce downtime, choices and expand its share in the Industrial market.
heighten cost savings through Just-in-Time arrival of Raw This is because within the Industrial sector, the consumption
Sugar stock and optimise stock holding for refined sugar. of sugar is still required for the processing of food and
beverage items. New developments are in store for supply
There was continued focus on optimum warehouse
management which ensured improvements on stocks in chain management as the Group begins to handle logistics
hand. More enhancement initiatives for warehousing are for liquid sugar from Tanjong Langsat and export of cordial
in the pipeline for 2021 to enhance operation issues. These and sugar syrup. For the domestic market, the delivery of
44 include installation of an open shade to the loading-unloading liquid sugar has commenced on March 2021.
area of MSM’s main distribution centre, the Sungai Buloh
MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
Warehouse (SBW), for continued operations even during ACHIEVING OPERATIONAL ExCELLENCE
raining season; and the upgrade of the railing siding for
wagon deliveries under KTM Berhad (KTMB). This shall In 2020, the Group replaced wooden pallets to plastic
increase present daily deliveries of about 1,000 tonnes or an pallets after doing a thorough study on customer
average 37 wagons per day to 45 wagons per day. Plans are preferences and long term viability. Even though wooden
also underway to enhance SBW’s accessibility by having two pallets are cheaper to rent, the overhaul led to some cost
access ways for better handling of incoming and outgoing savings as hidden costs were identified and eliminated.
deliveries. This will improve traffic management and control Another improvement identified was the switching of
at this main Distribution Centre.
product transfers from Prai to SBW from road to rail.
Towards increasing warehousing capacity, MSM intends Railway transport costs have proven to be more competitive
to build a new warehouse at the present Sungai Buloh for long distant transfers. Henceforth in managing supply
premise to increase storing capacity by up to 25,000 chains, road transport shall focus on domestic areas with
tonnes. The Group has also engaged an external warehouse smaller amounts of capacity transfer.
managed by Pos Logistics Berhad (Pos Logistics) to handle On the packaging front, the Group has also noted that
24 hour delivery operations.
OEM co-packers are more cost effective in terms of
Non deliveries during the year were reduced by maintaining human resource and welfare, and maintenance of the
effective communication within business divisions and machineries. Greater efficiency is being realised by having
collaborations with external supply chain partners such more than one OEM co-packers to pack our products and
as KTMB, Pos Logistics and co-packers. Strategies are in through contracts with wholesalers like TESCO to pack
place to maximise deliveries window time to gain more under their brand.
deliveries to the customer and enhance integrated supply Another avenue for cost savings going forward is to
chain support for train transfer from Prai and Pasir Gudang enhance current weighing and data systems to reduce
to SBW in the future. These external collaborations are human manipulation and eliminate product variances.
essential in reducing the current delivery window time as By installing more reliable weighing systems that interface
they directly impact for more efficient and professional with MSM’s M3 systems, cost savings can be recorded
transport management as well as production quality.
on a monthly basis.
ENSURING CONTINUOUS GROWTH

Towards ensuring continuous growth, in 2021 MSM
will focus on heightening customer satisfaction by
ensuring quality products are delivered at precise times.
For warehousing, the goal is to have 30 days’ stock at hand
to be able to readily respond to customers’ needs.