TELEKOM MALAYSIA Transforming procurement for greater proficiency
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TELEKOM MALAYSIA redefining procurement for supply chain success
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WRIT TEN BY
DA LE BENTON PRODUCED BY
CHARLOT TE CL ARK E
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Through a full-scale transformation journey, Telekom Malaysia redefines its procurement function
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istorically, procurement has
Mohamad Mohamad Zain, Chief
always been perceived as
Procurement Officer, TM.
a support function. Over the
With a career spanning over 20
last decade however, there has been
years, working in a number of roles
a considerable shift as more and more
within TM from insurance management
businesses around the world are
to enterprise risk management,
investing heavily to create greater
Mohamad has seen first-hand the
alignment between procurement and
changing role of procurement and feels
the strategic direction of the company.
his experience finely positions him to
For Telekom Malaysia Berhad (TM), Malaysia’s Convergence Champion,
lead TM’s transformation journey. Procurement was identified as one of
procurement has evolved far beyond
the key pillars to the company’s
its traditional function and is now
Performance Improvement Plan (PIP)
pivotal in the success and future
3.0, which focuses on delivering value
growth of the business.
via total cost ownership savings,
“Procurement has indeed played
increased speed of procurement
a pivotal role in ensuring speed to
process to support speed to market
market, improving customer stickiness
and be more responsive to the
via quality products and services while
dynamic business needs across the
also assuring supply sustainability to
wider TM Group.
support all year-round dynamic
“The Group Procurement’s vision is
business needs and strengthening
to optimise productivity,” says Moham-
supplier relationships to deliver shared
ad, “while also building an organisation
value to the organisation,” says
that has a sustainable competitive
“The Group Procurement vision is to optimise productivity,” says Mohamad, “while also building an organisation that has a sustainable competitive advantage towards “Procurement Made Easier” with stable, effective and efficient sources of supply” — Mohamad Zain, Chief Procurement Officer, TM
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advantage towards “Procurement Made Easier” with stable, effective and efficient sources of supply.” Through his role, Mohamad is part of the senior management committee, something he feels enables him to change the perspective of procurement. One of the key changes that he has implemented, in order to measure the success of this strategic transformation, is the w w w. t m . c o m . m y
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“ We are expecting the Industrial Revolution 4.0, and so the future of procurement will largely dependent on technology, robotic and Internet of Things (IoT). Through our journey, we are laying the foundations in order to be ready for this future� 08
— Mohamad Zain, Chief Procurement Officer, TM
BIO
Mohamad Zain Chief Procurement Officer, TM Mohamad, 54, gained vast experience in insurance services while serving a UKbased insurance company for six years, including as Officer in charge for agency and direct client underwriting, claim management and re-insurance, designing insurance for credit card company and bank assurance, serving both domestic and Multinational Corporation clients. He joined TM in 1993 as an Assistant Manager and has been tasked with managing the corporate insurance programme and implementing the Enterprise Risk Management programme for TM in 2001. In 2007, he was appointed GM entrusted with an expanded portfolio of Group Business Assurance covering Enterprise Management, Revenue Assurance, Fraud Management, Insurance Management, Credit Management Policy & Monitoring, Corporate Compliance, Business Continuity Management and Enterprise Business Management. He was promoted to VP, Group Business Assurance, a position he held from 2011 until his appointment as Chief Procurement Officer on 1 September 2014.
addition of optimising the supply chain and procurement management as the Group’s key performance indicators. What this does is present a challenge that Mohamad must continue to overcome; continue to demonstrate to stakeholders the true value of the new procurement model in contributing positively to the Group’s profitability. “I need to continue to show how procurement can assist our marketing team on speed to market with competitive product and
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services,” he says. “This can then
dynamics and speed in procurement process
ensure that our suppliers can fully
and execution.
apprise on the overall objective of our new procurement model.” TM’s transformation journey began in 2013, overseen by Mohamad’s predecessor. Moham-
The pillars will enable TM to implement a best-in-class procurement model, but any transformation journey is not without challenge. For Mohamad, he views challenge as an opportunity to continue pushing forward.
ad took over in 2015 and immedi-
“I look across our transformation to date, the
ately worked across the Group on
results that we can point to, and it gives me the
understanding the already
additional adrenalin I need to keep on pushing for
identified gaps in the Company’s
better results,” he says. “Whilst we have success-
basic procurement function.
fully established a cross functional category
These gaps allowed TM to
management team, improved governance to
anchor its transformation with three
allow speed of procurement approval, and
key pillars; value creation and
strengthened supplier relationship management,
expansion, responsive to business
there is still room w w w. t m . c o m . m y
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for improvement, including embracing technology.” The transformation by its very
ment a clear goal. While Mohamad looks to the future of technology, that’s not to suggest that technol-
nature is defined by improving
ogy hasn’t played a defining role in this transfor-
performance. Mohamad’s
mational journey.
sentiment of continuous learning is
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“To support the procurement transformation,
shared across the Group. Four
technology has and will be fundamental in the
years into this journey and TM can
delivery of speed and efficiency in our processes,”
already point to RM1.0 billion
he says. “As such, we have embarked on PINTAR
(USD250 million) TCO savings
project, designed to provide data analytics on
through the expansion of value
spend analysis for our category managers.”
creation, as well as expanding its
PINTAR, or the Procurement Institutionalisa-
strategic vendor portfolio and
tion of Technology Applications and
improving overall governance and
Resources, specifically enables greater
control in order to achieve faster
efficiencies across spend analysis, online tender
procurement process.
and quotation, supplier performance manage-
But Mohamad is a firm believer in
ment and contract management and repository,
not standing still and is already
amongst other key areas.
looking at the next step in order to
With technology redefining industries all around
continue to improve, with technol-
the world this brings upon a challenge that is not
ogy and embracing digital procure-
unique. The global technology conversation is w w w. t m . c o m . m y
defined by Artificial Intelligence, Automa-
digitalisation plan. At the same time, we
tion, Big Data, but are these terms simply
also benchmark with peers across the
turning into buzzwords? What work does
globe and in some instances securing
Mohamad and TM do to ensure that the
advice from our key suppliers who have
Company is implementing the right
implemented robust supply chain manage-
technologies for the right reasons and not
ment system.”
just following trends?
As a supply chain and procurement
“As a technology company, technology
function, having a strong supplier network
and digitalisation have been part of our
is crucial. In the journey of implementing a
business DNA from the very start,” says
new procurement model, that supplier
Mohamad.
network proves more vital than ever.
“TM has its own R&D team, Network & IT
Mohamad admits that a transformation
Technical Committee and Chief Digital
of this scope is not one that can be
Officer that continue to provide advisory
completed alone, with the strengthening of
across the Group on new technology and
supplier relationships in itself a core pillar
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“ Whilst we have successfully established a cross functional category management team, improved governance to allow speed of procurement approval, and strengthened supplier relationship management, there is still room for improvement, including embracing technology.” — Mohamad Zain, Chief Procurement Officer, TM
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of the journey. TM has redefined how it approaches supplier and vendor management, with expanded collaboration with mega suppliers (foreign and domestic) and those local vendors nurtured via its Bumiputera-Vendor Development Programme (BVDP). To date, we have over 9,200 vendors registered with us with close to 4,400 Bumiputera vendors. At TM, we have a robust and transparent procurement process; and we adhere to industry’s best practices. We are committed to maintaining the highest degree of integrity, transparency and accountability in the conduct of our business and operations. At least 42% of 14
our projects are based on tenders and we also award projects that require economies of scale to our long term and strategic partners. The BVDP is designed to stimulate the activity and involvement of local suppliers across Malaysia in tenders and other procurement activities. These activities can be stand-alone or through collaborating with foreign partners, with the goal of sharing technology and knowledge to the local suppliers in order to develop the capabilities of the local supplier network. “This programme will not only support the capability building of local vendors who will then be able to compete for regional business needs through tenders,” says Mohamad. “For TM, based on our BVDP framework, the entry level would be the Entrepreneur Development (ED)
and Blue Lane (ED programme specific for ICT-based or start-up technology company companies) levels. Once the vendors show improvement in their processes and capabilities, they will then be upgraded to Strategic Partners, and then elevated to become a Corporate Champion and finally to a National Champion. This journey may take three to five years.” TM has already amassed a strong portfolio of both foreign and local strategic suppliers such as Huawei, Fiberhome, Nokia as well as Opcom, Dura Mine and Lite Cable. As the title implies, this procurement journey is one of continuous improvement. Procurement as a function will continue to change and evolve and TM must continue to evolve with it in order to continue to deliver success. “The future will see TM begin to better embrace new technology, organisational and process redesign, and continue to push for cultural change in supporting this changing space,” says Mohamad. “We are expecting the Industrial Revolution 4.0, and so the future of procurement will largely dependent on technology, robotic and Internet of Things (IoT). Through our journey, we are laying the foundations in order to be ready for this future.”
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Menara TM Jalan Pantai Baharu Kuala Lumpur Malaysia, 50672 T +603-2240 9494 www.tm.com.my