ERP adoption by Malaysian manufacturers is dismal, says iContro
Malaysian ERP specialist iContro Software says the level of enterprise resource planning adoption by Malaysian manufacturers is very low especially in the process based manufacturing sector.
iContro Software [iContro] chief executive officer Frank Lee shared the company's recent findings on the current state of computerisation in the manufacturing sector, which he said was Malaysia's second largest industry sector.
Despite the progress made in other ICT areas such as mobility, digital media, big data, and cloud computing, Lee said similar "advancement in the biggest enterprise area - the Enterprise Resource Planning (ERP) is still sadly lacking."
"The behemoth ERP system is the core of all large enterprises and business operations whether in the public sector, telco, financial and retail. Yet, the advancements and technological upgrades within the ERP is one of the slowest and most painful," he said.
In particular, ERP usage in process-based manufacturing is "at a very basic level of computerisation and automation," said Lee, adding that manufacturing is generally divided into two types - Process and Discrete, the former is complex as it involves products that cannot then be broken down into its component parts once produced such as chemicals and raw material substances, oil & gas fuels, pharmaceutical goods and bio-engineered materials.
"As a significant portion of local manufacturers are process-based, it is not far-fetched to assume that this is currently one of the least automated sectors in the country, despite it being a top economic activity for Malaysia," he said.
ERP systems challenged by complexity, Lee said the company estimated that less than one third of Malaysia-based process manufacturers deploy an ERP system.
"Perhaps the main reason for this dismal ERP phenomenon in Malaysia and the region, is because most ERP systems available cannot cope with the highly complex nature of process-based manufacturing," he said.
"Even if the manufacturers have some kind of ERP system, they are mostly limited to handle the manufacturers' financials, distribution or HR functions only instead of being optimised to integrate and automate the actual and entire process manufacturing operations," Lee said.
"However the ERP market in Malaysia is slowly but surely undergoing a transformation as companies scrutinize that the capabilities of their IT purchases can actually perform what the business requires, in the face of ever growing competition in the Market Place," he said.
"Most of the paint manufacturers in Malaysia today use iContro as their default ERP - simply because it works extremely well to support all the complexities in their niche operations, and is much more affordable than other international ERP brands in the market," said Lee, adding that iContro was also attracting interest from players in other sectors such as building materials related, oil & gas and property.