OPERATION MANAGEMENT (AKP302/4)
SEMESTER 1, ACADEMIC SESSION 2021/2022
NWP HOLDINGS BERHAD REPORT & ANALYSIS
PREPARED FOR:
DR. MUHAMMAD SHABIR BIN SHAHARUDIN
PREPARED BY: - GROUP 3 AFIF BIN AZIZ (144475)
EVELYN SARAH JANE A/P SANTHANADAS (144262)
NUR FAZLIN BINTI RAMLI (144241)
NURWAHDATUL ELYA BINTI ABD WAHAB (144662)
Table of Contents
1.0
ABSTRACT ................................................................................................................................. 3
2.0
COMPANY BACKGROUND ....................................................................................................... 3
3.0
NWP HOLDINGS BERHAD ANALYSIS REPORT ..................................................................... 5
3.1
SUPPLY CHAIN PROCESS ................................................................................................... 5
3.2
SWOT ANALYSIS ................................................................................................................... 7
3.3
PORTER FIVE FORCES ........................................................................................................ 9
3.4
PESTEL ANALYSIS ................................................................................................................ 9
3.5
HOUSE OF QUALITY ANALYSIS ........................................................................................ 11
3.6
ISHIKAWA DIAGRAM ........................................................................................................... 16
3.7
CENTER OF GRAVITY METHOD ........................................................................................ 17
3.8
LAYOUT STRATEGIES ........................................................................................................ 19
4.0
CONCLUSION .......................................................................................................................... 19
5.0
REFERENCES .......................................................................................................................... 20
6.0
RESPONSIBILITY ..................................................................................................................... 20
1.0
ABSTRACT
NWP Holdings Berhad is a public company listed on the main market of Bursa Malaysia
Securities Berhad (“BMSB”) since November 2000. The group of companies provides the
manufacturing and trading of a wide range of quality timber products, kiln-drying, timber
treatment services, sawmilling, and logging. In this report, the analyses carried out includes
supply chain process, SWOT analysis, porter five forces, PESTEL analysis, house of quality
analysis, Ishikawa diagram, centre of gravity method and layout strategies. Countless
decisions must be made at all levels of an organization. Without proper operations
management, there is a higher chance of having various departments in conflict with each
other. An effective operations management plan also means a business could be ahead of its
competition. From this report, we hope to have a clear understanding of NWP Holdings
Berhad's position in the forestry and wood products industry.
2.0
COMPANY BACKGROUND
NWP Holdings Berhad is a Malaysia-based investment holding company. The company
operates through five segments: Moulding and Timber, Logging, Construction and
Development, Agriculture, Investment and Other. The Moulding and Timber segment is
engaged in the manufacture and sale of timber and timber products, and the provision of
drying services. The Logging segment is engaged in the contracting of logging services and
the provision of forestry services. The Construction and Development segment is engaged in
the provision of construction, development, and related services. The Agriculture segment is
engaged in the maintenance of biological assets. The Investments and Other segment are
engaged in holding investments and selling ice blocks.
The company offers various products, such as moulded lumber products (interior and
exterior), air-dried/gravel-dried lumber, and veneer rolls and veneer wraps. The company also
offers various services such as kiln drying (KD), wood treatment and contract logging. The
Board of Directors (committed to developing business in a sustainable and responsible
manner and endeavour to strike a balanced optimization of business performance,
environmental stewardship and commitment to our people and society.
SDG
Our Contribution / Indicators
Goal 3: Good Health and Well-Being


Ensure healthy lives and promote wellbeing for all at all ages.
3
provides equal employment opportunities
and promotes workplace diversity to build
an inspiring working environment.
fully aware and committed in fulfilling its
social obligations in improving the
lifestyle and wellbeing of the community.
Goal 8: Decent work and economic
growth



Promote sustained, inclusive, and
sustainable economic growth, full and
productive employment, and decent
work for all.

Goal 11: Sustainable cities and
communities


provide fair employment opportunities
and necessary training to the local
community.
local stewardship of human resources
plays an important role in sustainable
resource use.
implemented the Anti-Bribery and AntiCorruption Policy to ensure that business
is conducted in a legal, ethical,
transparent,
sustainable,
and
professional manner in the interest of all
its stakeholders
focused on delivering products of quality
and being customer focused.
creates a safe, healthy, and conducive
working environment for its employees.
employees are equipped with knowledge,
skills and competencies which required
for them to work effectively in the current
volatile economic environment.
Make cities and human settlements
inclusive, safe, resilient, and
sustainable.
Goal 12: Responsible consumption and
production


Ensure sustainable consumption and
production patterns.
4
continually reviews and monitors its
activities to make a positive contribution
to the environmental, economic, and
social well-being of our stakeholders,
employees, and the wider community.
continually encourages its employees to
recycle
and/or
reduce
resource
consumption to minimize waste.
Goal 13: Climate action


maintained in good working condition to
ensure
minimal
emission
and
environmental impact
to ensure that waste is disposed of
properly and in accordance with the law.
Take urgent action to combat climate
change and its impacts.
3.0
NWP HOLDINGS BERHAD ANALYSIS REPORT
3.1
SUPPLY CHAIN PROCESS
NWP Group has been producing and processing high-quality wood products for over 15 years.
It is one of the forerunners in Malaysia, establishing an Integrated Timber Complex in Sabah.
One of their products is the combination of goods, services, and solutions that leverage core
competencies and demonstrate their mission of becoming a growing, innovative network of
businesses generating amazing outcomes via outstanding people. NWP Group has
consistently invested in new timber knowledge and machinery to provide clients with the most
value from its goods and service as they have many selections of high-quality timber products.
The process of the flow of goods and services is referred to as the supply chain process, and
it encompasses all processes that turn raw materials into finished products. It entails actively
simplifying a company's supply-side processes to optimize customer value and obtain a
competitive edge in the marketplace. Supply chain planning in the NWP Holdings BERHAD
Forest product industry involves three steps of planning. Firstly, strategic planning as for a
long timber cycle and an unstable and dynamic business market, strategic planning is crucial
in forestry. Strategic planning involves in distribution of the products and their costs,
distribution of production across the wood supply chain, and marketplace based on predicted
market developments.
Second planning is tactical planning. It handles the allocation criteria that determine which
resources should oversee carrying out the various supply chain operations. It also tackles the
manufacturing regulations, distribution delays, lot sizing, and inventory restrictions. Tactical
planning is important when there is a need for advanced planning, particularly when there is
seasonality in the supply chain. For example, regular rain will render transportation operations
unfeasible because of slick roads. Lastly, operative planning is also important in supply chain
planning in NWP Holdings Berhad.
Precision is essential in this planning process, and tasks are scheduled on a monthly, weekly,
and hourly basis. Scheduling the various products on the manufacturing lines is a common
operational planning activity in the manufacturing process. In terms of short-term planning,
many wood products have operational planning flaws (sawmilling) and transportation plays a
crucial role in operational planning because of dispatching inefficiencies that arise across
various parts of the supply chain.
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Figure 1:Overview of the Forest Supply Chain
The steps of supply and value chain optimization in forestry are depicted in Figure 1.
Management must be informed of current market trends and assess the scope of the supply
chain to maximise financial rewards. The logs will be sorted and stored by species, diameter,
length, and end-use when logs arrive at the mill's storage yard. Then, it is cut to the longest
straight length permitted with a cut-off saw, then put onto the head saw carriage and positioned
in such a manner that the operator may produce the best sawing pattern with the least amount
of waste Before bringing the log to the head rig for breakdown.
Following the head rig, the resaw further breaks down slabs, flitches, and cants, allowing the
wood to be upgraded; thick slabs are sawn into planks, while flitches and cants are sawn into
planks and boards. Next, using one or more fixed or portable trimming saws, the timber is cut
to specified lengths, edges squared, and flaws eliminated before being sorted and graded.
Based on market need, sawn and trimmed timber is classified by breadth, thickness, length,
quality, and species. The value of the timber is then boosted by drying and reducing the
moisture content to an adequate level since the timber is dimensionally stable and its strength
and colour are improved; moreover, a reduction in weight reduces transport expenses. Sawn
wood, on the other hand, maybe dried in a closed and controlled environment where
temperature, air circulation, and humidity can be changed to provide the most cost-effective
drying conditions while minimising degradation. The two most common types of kilns are batch
and progressive.
The plywood is next subjected to primary finishing, which includes cutting, sanding, and
improving the plywood after pressing to improve the product's marketability. In machines
equipped with wide-belt or drum sanders, it will be sanded to obtain the desired surface
smoothness. Damaged or faulty face veneers are then manually repaired by plugging and
repairing.
Lastly, the final step of the supply chain process of timber industries as secondary
transportation. When compared to other businesses, NWP Holding Berhad forest product
transportation accounts for 25% of the heavy haul industry. Timber transport has an influence
not only on supply and value chain optimization, but it is also the most expensive cost
component in the cost of delivered wood. As a result, transportation efficiency is critical in
improving the supply chain.
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3.2
SWOT ANALYSIS
SWOT analysis is a strategic planning method that NWP Holdings Berhad management may
use to conduct a situational study of the organisation. It is a critical tool for identifying the
existing Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T) that NWP
Holdings Berhad is experiencing in its current business environment.
The NWP Holdings Berhad is a market leader in its sector. NWP Holdings Berhad maintains
its market dominance by thoroughly evaluating and revising the SWOT analysis. SWOT
analysis is a highly interactive process that necessitates excellent coordination across various
organisational areas such as marketing, finance, operations, management information
systems, and strategic planning.
(I)
STRENGTHS
NWP Holdings Berhad, being one of the best organisations in its field, possesses
several qualities that enable it to prosper in the market. These strengths not only assist
it to maintain its market share in existing areas but also to enter a new one. One of
NWP Holdings Berhad's strengths is good returns on capital expenditure. NWP
Holdings Berhad corporation is relatively successful at project execution and has
generated good returns on capital expenditure by developing new revenue streams.
Besides, NWP Holdings Berhad is a trustworthy supplier as the firm has a large base
of reliable raw material suppliers, allowing it to overcome any supply chain
bottlenecks. NWP Holdings Berhad also has excellent, which gives the firm with
resources to develop into new projects. Lastly, NWP Holdings Berhad has created a
dependable distribution network that can cover the bulk of its prospective market
throughout the years.
(II)
WEAKNESSES
Weaknesses are areas in which NWP Holdings Berhad can improve. Strategy is about
making decisions, and weaknesses are areas where a company may improve utilising
SWOT analysis to strengthen its competitive advantage and strategic positioning.
Firstly, the investment in R&D is lower than that of the industry's fastest-rising
competitors. Despite spending more on R&D than the industry average, NWP
Holdings Berhad has been unable to compete in terms of innovation with the industry's
leading competitors. It appears to be a mature company eager to release goods based
on market-tested features. Other than that, outside of the primary business, there has
been limited success. Despite being one of the premier companies in its field, NWP
Holdings Berhad has had difficulty in expanding into new product areas with its current
culture. Besides, the day’s inventory is high in comparison to rivals, requiring the firm
to obtain additional funds to spend in the channel. This may have an influence on
NWP Holdings Berhad’s long-term growth. Lastly, when compared to other firms in
the business, there is a high rate of attrition among the workforces. NWP Holdings
Berhad has a higher turnover rate and must spend significantly more on staff training
and development than its competitors.
(III)
OPPORTUNITIES
The market's development will result in a dilution of competitors' advantages, allowing
NWP Holdings Berhad to strengthen its competitiveness in comparison to its
competitors. Besides, NWP Holdings Berhad can take the opportunity by opening new
markets as a result of government agreement. In this case, NWP Holdings Berhad
has been given the chance to join a new emerging market as a result of the adoption
of a new technical standard and a government free trade agreement. Following years
of recession and poor development in the sector, the economic rebound and rise in
consumer spending represent a chance for NWP Holdings Berhad to gain new clients
and improve its market share. Lastly, new consumer behaviour changes may open up
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new markets for NWP Holdings Berhad. It is an excellent chance for the company to
generate new income streams while also diversifying into new product categories.
(IV)
THREATS
There is no consistent supply of innovative items. In this case, several goods have
been produced by the corporation throughout the years, however, they are frequently
in response to the development of other competitors. Second, sales numbers over
time increased and will have a low swing due to the supply of new items being
irregular. Next, counterfeit, and low-quality product imitation is also a challenge to
NWP Holdings Berhad's goods, particularly in emerging and low-income countries.
Besides, rising raw material costs may threaten NWP Holdings Berhad's profitability.
Lastly, the demand for highly profitable items is seasonal, and any unexpected
incident during the peak season may have an influence on the company's profitability
in the short to medium term.
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
• Good returns on capital expenditure
• Trustworthy supplier
• Dependable distribution network
• High level of customer satisfaction
• Strong brand portfolio
• 'Low investment in R&D
• Limited success outside core business
• Higher in days inventory compared to
competitors
• High rate of attrition among the workforces
• Exist gaps in the product range sold by the
company
• Dilution of competitors' advantages due to
market's development
• Government agreement results in giving
chances to open new markets
• Lower inflation rate
• Economic rebound and rise in consumer
spending
• New trends in the consumer behavior can
open up new market
• Unconsistent supply of innovative items
• Supply of new items being irregular
• Counterfeit and low-quality product imitation
• Rising of raw material costs
• The demand of the highly profitable products
is seasonal in nature
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3.3
PORTER FIVE FORCES
If suppliers have strong
power over customers, they
will demand a higher price
from NWP Berhad. This will
affect the potential of NWP
Berhad to earn above
average profits in Forestry &
Wood Products.
Power of
suppliers
If the threat from substitute
products is great, NWP
Berhad either must
continuously invest in
research and development
or risk losing out to the
disruptors in the industry.
3.4
Threat of
new entrants
into the
industry
Competition
in the
industry
Threat of
substitute
products
If there is a strong threat from
new entrants in the Forestry
and Wood industry, then current
entrants will be willing to make
lower profits to reduce the
threat from new entrants.
Power of
customers
When buyers have strong
bargaining power, they tend to
squeeze the price, limiting
NWP Berhad's potential to
make sustainable profits.
When competition is intense,
it becomes difficult for existing
players like NWP Berhad to
make sustainable profits.
PESTEL ANALYSIS
PESTEL analysis is a strategic management tool that the management of NWP Holdings
Berhad can use to make a better decision. PESTEL stands for political, economic, social,
technological, environmental, and legal factors that affect the macro environment of the
company in which it operates. NWP Holdings Berhad operates in a dynamic environment
where it is affected by collective societal trends, regulatory frameworks, increasing consumer
environmental activism, consumer spending patterns, government decisions, increasing
regulatory frameworks for environmental factors, technological changes, and an ever-evolving
legal system.
Political Factors
Political factors are frequently linked to the extent and form of local and national government
action in the business and economic environment. The nature and aims of policies are heavily
influenced by government policies and governance systems. The current Malaysian
governance structure has served its purpose for a long time, and we don't expect much to
9
change in the process even though if it does produce leaders who can implement policies that
differ from the historical norm. To forecast trends, NWP Holdings Berhad must keep a close
eye on industry-wide government initiatives. Next, there are no immediate concerns to
Malaysia's corporate environment as a result of military policy, terrorist threats, or other
political unrest. NWP Holdings Berhad has handled operations in a variety of challenging
situations. Moreover, NWP Holdings Berhad must comply with a variety of rules in the markets
where it operates. Malaysia and other growing nations have changed legislation in recent
years, affecting not only market access but also how Forestry & Wood Products firms can
operate in the local market. Then, the Malaysian government's new policies may improve
investment sentiment in the primary sector. Given the broad popular acceptance of the
proposed policies, it is reasonable to assume that these policies will last beyond the tenure of
the current Malaysian government. Furthermore, the political stability in the existing markets
may lead to instability since COVID-19 hit the whole nation in late 2019 till now.
Economic Factors
Economic factor is a factor that can affect the financial status of a person. These include the
rate of inflation, the economic performance of the country, the exchange rate, the conditions
in the labour market, the disposable income of consumers, the stage of the country's economy,
the interest rate, and the tax rate. Given Massive government expenditure, stable demand
due to disposable income, and expanding investment into new industries, I expect Malaysia's
economic performance will remain stable in the next 5-10 years. First and foremost,
government engagement in the Basic Materials sector, particularly in the Forestry & Wood
Products industry, may have an impact on NWP Holdings Berhad's prospects in Malaysia.
Next, NWP Holdings Berhad can efficiently access the dynamic financial markets and readily
available liquidity in the Malaysian stock market to further expand globally. In the Basic
Materials sector, Malaysian human resources have a moderate to high competence level.
Furthermore, NWP Holdings Berhad can use it to not only improve services in Malaysia, but
also to develop worldwide prospects by leveraging the talented workforce.
Social Factors
Each group and culture have its own business practices. These social aspects can assist
organizations like NWP Holdings Berhad better understand not only how to do business, but
also how to comprehend client preferences in Malaysia Basic Materials industry. Acceptance
of the entrepreneurial spirit, attitudes toward specific products and services, attitudes toward
health and safety, demographics, traditions, societal roles and conventions, gender roles,
culture, and leisure activities are all social influences. In general, for the last couple of
decades, half of Malaysia's population has been given access to basic amenities. This is the
result of increased investment in public services. In terms of basic commodities, NWP
Holdings Berhad has demographics on its side. Malaysia is a young country and growing.
NWP Holdings Berhad can take advantage of this trend to target different segments of the
population. Then, with increasing liberalization, attitudes towards health and safety are
becoming laxer. NWP Holdings Berhad must stay away from this attitude because the cost of
failure is too high in Malaysia.
Technological Factors
Technology is transforming various industries, and that includes basic industries. There are
numerous ways in which technological factors are affecting NWP Holdings Berhad & Forestry
& Wood Products in Malaysia. Some of the technological factors are access to technology by
the population, speed of change driven by technology, disruption of supply chain due to
technology, access to mobile phones leading to more empowerment, innovation in customer
service, innovation in product offerings and access to more information. Technology has
shortened the product life cycle and allowed vendors to quickly develop new products. This
10
has put pressure on NWP Holdings Berhad's marketing department to keep suppliers happy
by offering a wide range of products. This has driven up NWP Holdings Berhad's operating
costs. In the Basic Materials sector, there is no strong culture of technology transfer, and
companies such as NWP Holdings Berhad are often reluctant to transfer or license technology
for fear of turning employees into competitors. The development and proliferation of mobile
technology has changed the expectations of customers in the Basic Materials sector. NWP
Holdings Berhad must not only meet and manage these expectations, but also innovate to
stay ahead of the competition. Latest technology-based innovations introduced by competitors
of NWP Holdings Berhad. This can give a good insight into the mindset of competitors and
the future business model of Forestry & Wood Products.
Environmental Factors
In the last decade, sustainability and environmental factors have become increasingly
important for businesses. Governments and stakeholders require companies to meet
environmental standards. Some of the environmental factors are safe water treatment, limiting
carbon footprint, climate change, safe waste disposal, increasing focus on sustainability,
insurance policies, safe disposal of hazardous materials and laws regulating pollution. As we
can see in Malaysia, our customer activism also brought environmental factors to the forefront
of NWP Holdings Berhad's strategy. Customers expect NWP Holdings Berhad not only to
comply with legal standards but also to exceed them in order to become a responsible
stakeholder in the community. Extreme weather conditions in some district of Malaysia also
increase NWP Holdings Berhad's operating costs as it must invest in making its supply chain
more flexible. For example, recent flood in some of city in Selangor may affect the NWP
Holdings Berhad’s operating costs since the company located at Puchong, Selangor. Next,
recycling is becoming the norm rather than a good thing in the Malaysian economy. NWP
Holdings Berhad must make plans to meet regulations and expectations in the Basic Materials
sector. Moreover, regular scrutiny by environmental authorities also increases the operating
costs of NWP Holdings Berhad. Meanwhile, the Paris Climate Agreement which is the
international treaty on climate change has set specific targets for the Malaysian government
to adhere to. This may lead to stricter controls on NWP Holdings Berhad's environmental
standards in Malaysia.
Legal Factors
Legal plays an important role in the development of Forestry & Wood Products sector in any
economy. The management of NWP Holdings Berhad must consider the following legal
factors before entering the international market which are discrimination laws, data protection
laws, protection of intellectual property rights, legal system, duration of jurisdiction, copyright
laws and bias against domestic companies. Malaysia's business law procedures are in line
with international organizations such as the World Trade Organization and the European
Union. Next, employment law in the Malaysia examines the steps that are being taken to
ensure that the forests are managed on a sustainable basis make a great impact on the
business model of the Forestry & Wood Products. NWP Holdings Berhad also must secure
Legal protection of intellectual property, patents, copyrights, and other IPR rights in Malaysia.
Over the past decade, data protection has become an important issue not only in terms of
privacy but also in terms of intellectual property rights. NWP Holdings Berhad must consider
whether Malaysia has a robust privacy breach protection mechanism in place. Some countries
do adhere to international norms, but the time taken to resolve disputes often runs into years.
NWP Holdings Berhad must carefully consider the average time for certain cases before
entering an international market.
3.5
HOUSE OF QUALITY ANALYSIS
NWP Holdings Berhad is involved in a wood-based industry that includes the manufacturing
of wood moulding, priming timber and laminated timber, trading of sawn timber, plywood and
11
veneer, provision of kiln drying services, sawmilling service and trading of agricultural
products. In 2021, timber related products remain as the main contributing income to the
company’s revenue due to the distribution of moulding products to local and China markets
that contributed approximately 41% and 59% of the company’s revenue respectively.
To conduct the House of Quality analysis for NWP Holdings Berhad, we must perform seven
basic steps:
1. The first step is to identify what the
customer wants, their requirements. The
importance of their requirements was
weighed and assigned next to the list of
customer requirements. Ratings of 1 to 5
were
assigned
to
classify
the
requirements.
Customers like architects, interior
designers, discerning artisans seek
unyielding beauty and durable quality of
the moulded timber products. Customers
also require specified orders like sawn
timber that are either kiln dried (KD) or
air-dried (AD) and veneer rolls, sometimes
profile veneer- wrapped moulding.
2. The next step is to identify how the
good/service will satisfy customer wants.
NWP Group moulded timber products are
machined
in
accordance with
specific profiles
e.g., a specific
shape
requested by a
customer using the latest technology to
ensure superior finishing and quality. The
company’s interior decorative timbermoulding such as astragal, base, base
shoe, casing, cove, crown, rails, rounds,
stops and strips that are mainly used in
an interior of a building, become the premier
choices of their buyers.
NWP Group also provide sawn timbers that
Can be kiln dried (KD) or air-dried (AD), and
processed veneer rolls as customers’
specifications.
3. Then, relate how customer wants the
product. To do this, a matrix is built.
i) Durability of the product is an important
customer want, this company only
chooses the high-performance material
or wood species to ensure the durability
of their hardwood moulded exterior timber
products such as floorings and decking
which are mostly used outdoors for
gardens and swimming pool. The only
produce their moulded exterior products
from specially selected and graded
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hardwood sawn timber such as Belian, Selangan Batu, Merbau, Kapur, Keruing, and other
species on demand. The company can offer various timber species such as Red Meranti
(Seraya), White Seraya, and other species as per customers’ requests. Their products have
been designed to last and ensure low maintenance or their customers’ hassle-free enjoyment.
ii) The beauty of the product also joins the list of customer wants. According to this company,
their exterior timber moulding has the value where aesthetic beauty and functionality meet in
perfect harmony because their interior timber moulding is of good quality, and it gives any
interior a perfect finishing. Their wood moulding enhances the beauty of a living environment
and make an excellent masterpiece in their customers’ dining area, paving and patios. Not
only does enhance the indoor and outdoor living spaces of homes, but it also even adds value
to commercial buildings.
iii) The company owns a ‘PONY’-saw that can perform precision sawing of timber, combined with
their skilled sawmill-workers, this company can supply prime sawn timber to meet the most
precise requirements of their customers. They have a veneer-roll machine which allows them
to supply veneer rolls to the furniture and moulding industries. As for the profile veneerwrapped mouldings, laminated mouldings are wrapped with good looking layers of selected
veneer e.g., using an American Red or White Oak for the top-layer or any stringent
specification by their customer.
4. Next,
relationships
between
the
company’s hows are identified by filling in
the matrix. Four different values were used
to evaluate the relationship:
-
Score 0 is given when there is no
connection.
Rate 1 is given for a weak relationship.
Score value of 5 is given for an average
relationship.
strong relationship is given the highest
score, 9.
For this company, relationship between durability and durable quality is the strongest. The
relationships between superior finishing and durability and product made to specification and
durability are average.
5. Then, using the customer’s importance
ratings and weights for the relationships
shown in the matrix, the importance
ratings were developed.
The importance of each attribute is
obtained. Superior finishing product made
as per customer specification have
absolute values of 67 and the durable
quality has an absolute value of 48. It
shows that superior finishing and product
made as per customer specification have
greater importance because they are
closely related to the customer requirements.
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6. Next, the competing products were evaluated to check how the competing products meet
customer requirements. Such an evaluation would be based on market research.
We can evaluate the competing products by comparing the price earnings ratio of competitor
companies and NWP Holdings Berhad. The price earnings ratio of NWP Holdings Berhad as
of 28 February 2021 is -12.61 and its competitors’ price earnings ratio is as shown in the table
below.
Table 1:NWP Holdings Berhad’s Competitors’ price
earnings ratio
Since Iconic Worldwide Berhad and Mieco Chipboard Berhad have higher price earnings ratio,
they acquire the highest rating. ARB Berhad also has a higher price earnings ratio compared
to NWP Holdings Berhad but lower than Iconic Worldwide Berhad and Mieco Chipboard
Berhad, hence it has a rating of 4.
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7. Finally, the desirable technical attributes, the company’s performance and the competitor’s
performance against these attributes are determined.
From Step 6 above, it is observed that NWP Holdings Berhad’s competitors perform better
than them. To fulfil customer requirements and perform better in the future, the company must
determine its direction of movement and analyse the interrelationships of their product
features.

To determine its direction of movement,



an up arrow is used to indicate that the attribute must be increased and vice versa
a circle is used to indicate that a target value is needed
To analyse the interrelationships, the relationship is determined as positive, negative, or
neutral, denoted by the “+”, “- “, and “0” symbols.
NWP Holdings Berhad should focus on increasing its direction of movement towards the
superior finishing and product specifications attribute since they have the highest importance
ratings. Target value should be set for the desirable quality of their products to match up to
their competitors’ quality of products.
Analyzing the interrelationships, we can see that the superior finishing is positively related to
the durable quality and product specifications because the product of the company be it
customized or uncustomed, is durable and pleasing to the eyes to satisfy the customer.
Meanwhile, the durable quality and product specifications have a neutral relationship because
regardless of whether the product is customized or not, every product manufactured by this
company is of durable quality.
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3.6
ISHIKAWA DIAGRAM
ISHIKAWA DIAGRAM
Materials
Management
Disrupted business operations
Production and shipment of goods and
raw materials had come to a halt due to
the movement restriction order
Poor financial performance
Company registered a loss after
tax of RM 10.69 million
Impairment loss on plant and
machineries, receivables, and inventories
Machinery
Shortage of log supplies
POTENTIAL
PROBLEM FOR
NWP HOLDINGS
BERHAD
DURING COVID19
Disruption in shipment
Lockdown in both
China & Malaysia
Process
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3.7
CENTER OF GRAVITY METHOD
The center of gravity method is used to locate the optimal location for a distribution center to
reduce total transportation costs. This method considers factors such as markets, the cost of
goods, the cost of transportation (existing facilities, the distances between them, and the
volumes of goods to be shipped between them)
The center of gravity method seeks to reduce total shipping costs, that is the cost of shipping
from the distribution center to the various shipping points.
This methodology involves formulas used to compute the coordinates of the two-dimensional
point that meets the distance and volume criteria. The center of gravity of a geographical
location can be obtained by calculating the location's X and Y coordinate values that minimize
transportation costs. The coordinates of the center of gravity can be calculated by,
Cx =
d V
V
ix
i
i
Cy =
d V
V
iy
i
i
where
Cx = X coordinate of center of gravity
Cy = X coordinate of center of gravity
dix = X coordinate of the ith location
diy = Y coordinate of the ith location
Vi = volume of goods moved to or from ith location
Suppose the company wants to expand its logistics network and locate a facility within a
network of four existing facilities. By computing the coordinate using Excel, we have the
following data: -
We finally obtained the X and Y coordinates of centre of gravity which are (4.911°,101.299°)
and figure below shows the location on the map.
17
Center of Gravity method
105,000
North-South
104,000
103,780
103,000
101,560
102,000
101,299 101,526
101,000
100,000
Centre of gravity
98,562
99,000
98,000
0,000
2,000
4,000
6,000
8,000
10,000
East-West
Figure 2 and 3: Maps pinpoint the centre of gravity location (green) and the 4 other locations
Based on centre of gravity method, it is suggested to open a branch in Sungai Siput, Perak
area by the coordinates calculated from the formula. This branch will act as the centre of the
distribution; the branch that links to all the remaining 4 locations to reduce costs and increase
efficiency.
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3.8
LAYOUT STRATEGIES
Process layouts are found primarily in job shops, or firms that produce customized, low-volume
products that may require different processing requirements and sequences of operations.
Process layouts are facility configurations in which operations of a similar nature or function are
grouped together. As such, they occasionally are referred to as functional layouts. Their
purpose is to process goods or provide services that involve a variety of processing
requirements.
According to a statement posted by NWP Holdings Berhad, their company has been impacted
a lot especially from the construction and development segment during the early stage of the
Covid-19 pandemic. NWP Holdings Berhad needs to improve their efficiency and services to
ensure all divisions are in a smooth state without any problems. As the Group and the Company
are organized into business units based on their products and services, we would suggest for
NWP Holdings Berhad to have a process layout in which operations of a similar nature or
function are grouped together. As a result, they are also referred to as functional layouts. Their
mission is to process items or deliver services that need a multitude of processing steps. NWP
Holdings Berhad typically includes different departments, with general-purpose divisions
organized by function. As a result, facilities that are set for certain tasks or processes have a
process layout. This structure offers the company the flexibility it needs to manage a wide range
of routes and process requirements.
Apart from that, employees in this arrangement are likely to be able to conduct a variety of
activities on numerous machines, as opposed to the monotony of completing a repetitive activity
on an assembly line. A process structure also enables the employer to implement individual
incentive scheme. Like NWP Holdings Berhad, they have their own motivation and behave
responsibly as the strong relationships help them to create sustainable positive change in their
communities and the environment.
For the cost in process layout, in certain cases, general-purpose equipment may be less
expensive to acquire, as well as less expensive and easier to maintain than specialist
equipment. Moreover, NWP Holdings Berhad have taken some measures to minimize the
impact of business during Covid19 with cost-cutting measures on non-essential items. Next,
the process layout will be more useful for the office space leasing (headquarter) of NWP
Holdings in Selangor. By arranging the office premises and car parks within the building
accordingly, the hustle during the peak hour could be reduced even when everyone needs to
follow the new Standard Operating Procedures before and after entering the building.
Therefore, by designing a process layout, those five main operating segments in the NWP
Holdings Berhad which are moulding and timber, logging, construction and development,
agriculture, and investment and others can be more efficient.
4.0
CONCLUSION
In this competitive world, a company must make the best planning and management to stay
ahead of other competitors. To ensure this, the analyses carried out will provides insights in
decision-making. As an example, Porter's Five Forces model is an important tool for
understanding the main competitive forces at work in an industry. This can help you to assess
the attractiveness of an industry, and pinpoint areas where you can adjust your strategy to
improve profitability. Within any production facility or organization, it is crucial to have adequate
and advantageous operations management to ensure that production runs smoothly even when
the unexpected situations arise. There are many benefits that come from implementing
operations management strategies to allow us to gain insight into the key areas that need
improvement. Therefore, careful analysis and planning must be made before proceeding and
carrying out a process in any segments of industry.
19
5.0
REFERENCES
Heizer, J., Render, B., & Munson, C. (2017). Principles of Operations Management:
Sustainability and Supply Chain Management. Pearson.
Marketing, O., analytics, W., & quality, H. (2022). House of quality. IONOS Digitalguide.
Retrieved 23 December 2021, from https://www.ionos.com/digitalguide/onlinemarketing/web-analytics/house-of-quality/
NWP Holdings Berhad. Nwp.com.my. (2022). Retrieved 22 December 2021, from
http://nwp.com.my/
NWP (5025): NWP HOLDINGS BERHAD - Financials | I3investor. Klse.i3investor.com. (2022).
Retrieved 27 December 2021, from
https://klse.i3investor.com/servlets/stk/fin/5025.jsp?type=ttm
NWP Holdings Berhad Stock Price & News - WSJ. WSJ. (2022). Retrieved 27 December 2021,
from https://www.wsj.com/market-data/quotes/my/xkls/5025
NWP Holdings Berhad Annual Report (2021) Retrieved 18 December 2021 from
https://www.bursamalaysia.com/market_information/announcements/company_announc
ement/announcement_details?ann_id=3179943
Pestel analysis. Corporate Finance Institute. (2021, September 9). Retrieved January 7, 2022,
from https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/
PlanetTogether. (n.d.). Importance of Effective Operations Management (OM).
PlanetTogether. Retrieved January 7, 2022, from
https://www.planettogether.com/blog/importance-of-effective-operations-management
Porter, M. (1998). Competitive Strategy. New York: Free Press, pp. 3-5.
Weida, N. C., Richardson, R., & Vazsonyi, A. (2001). Operations Analysis using Microsoft
Excel: Updated for Excel 2000. Duxbury.
Yayici, E. (2015). Business analysis methodology book. Emrah Yayici.
6.0
RESPONSIBILITY
NAME
ID
WORK
AFIF BIN AZIZ
144475
Company Background, Porter Five Analysis,
PESTEL analysis
EVELYN SARAH JANE A/P
SANTHANADAS
144262
House of Quality analysis, Ishikawa Diagram
NUR FAZLIN BINTI RAMLI
144241
Supply chain analysis, SWOT analysis
NURWAHDATUL ELYA BINTI
ABD WAHAB
144662
Abstract, Centre of Gravity method, Layout
Strategy, Conclusion, Formatting
20