BHIC : A Commitment To Supply Chain Management And Vendor Development

Boustead Heavy Industries Corp Bhd (BHIC) is a company with diverse interests in the marine, defence and security sectors.  It is part of the Boustead Group of Companies and is listed on Bursa Malaysia Securities.  Its major shareholders are Boustead Holdings Berhad with 65% equity and Lembaga Tabung Angkatan Tentera (LTAT) which owns 8% stake in the company.

BHIC’s principle activities are in shipbuilding, ship repair and maintenance repair and overhaul (MRO) of ships, helicopters, submarines and military- related assets and equipment. 

It undertakes shipbuilding and ship repair at its shipyards in Lumut, Perak and Pulau Langkawi, Kedah, carries out submarine MRO at the Royal Malaysian Navy (RMN) base in Sepanggar Bay near Kota Kinabalu, Sabah and provides helicopter MRO services at its aeroservices centre in Subang, Selangor.

Companies under the BHIC Group also undertake MRO and provide Integrated Logistics Support services of weapons systems for the Malaysia Armed Forces, and provide maritime and aviation training, among other activities.

Key to BHIC’s well-established position amongst the leading players in the local marine and defence / security sectors is its efficient supply chain management across the Group. 

At the forefront of this is the Group Supply Chain Management (GSCM) Department – based in BHIC’s HQ in Menara Boustead, Kuala Lumpur – which provides centralized support to the Group in the area of compliance monitoring to ensure adherence to internal policies and procedures on procurement, in addition to rules, regulations and best practices related to the function. 

With the support of GSCM, BHIC has successfully completed various projects on time, at cost and according to the specifications of the client.  These include the construction of four units of Littoral Mission Ships (LMS) jointly built by BHIC’s associate company Boustead Naval Shipyard Sdn Bhd (BNS) in China for RMN. 

These fit-for-purpose patrol vessels are part of RMN’s 15 to 5 Fleet Transformation Program to reduce its asset classes from the current 15 types of ships to 5 to boost its capability to safeguard the nation’s maritime security and interests.

Vendor Development Programme

Beside managing the supply chain activities of the BHIC Group, GSCM is also responsible to spearhead Vendor Development Program under the Vendor Development Management (VDM) Unit. 

As of 31 December 2020, there were 2,772 vendor companies registered under VDM and 36 of them are appointed under the VDP.  Among the activities under the VDP, which is supported by the Government of Malaysia through the Ministry of Entrepreneur Development and Cooperatives (MEDAC), are

i. Promoting capacity development among vendors

The VDP under VDM Unit promotes capacity development amongst vendors under the program by coordinating their attendance in various courses.  These courses, conducted by various Government agencies, cover among others ISO Certification, Design Thinking, Finance Management, Lean Management and Contract Negotiation Skills. Their attendance at these courses led to several VDP vendors obtaining ISO certification. In 2020, eight vendor companies were awarded grants totaling RM412,798 under the Program Pembangunan Kapasiti Vendor by MEDAC.

ii.         Nurturing vendors through Development and Commercialization Program

The VDM Unit also plays the role of nurturing vendors under the VDP through Development and Commercialization Program.  As a result of this effort, one of the vendors was awarded a grant valued at RM777,915 in 2020.

iii.        Providing opportunity for vendor companies to participate in big projects

Through awarding contracts to vendors in big projects undertaken by BHIC, the company provides them with the opportunity to build track record and gain experience in complex projects.  This helps them gain valuable exposure to such projects as vendors / sub-contractors of BHIC.

Through the VDP, BHIC plays its part in fulfilling the national agenda of enhancing the contribution of Small Medium Enterprises (SMEs) to the national economy.  In addition, BHIC contributes towards creating jobs, developing high skills amongst locals, boosting local content in high-tech projects and transforming Malaysia into a high-income economy.

Moving forward

As a company operating in competitive sectors, BHIC is always striving to improve its supply chain management to reduce cost, shorten lead time, complete projects successfully and fulfil customer expectation.  Through its vendor development initiatives, it is also committed to supporting national aspiration of developing of SMEs to boost their socio-economic contribution to the national economy.

Amid the ever-changing, challenging and competitive business landscape, BHIC is continuously making improvements to increase efficiency and productivity to deliver quality products and services to its customers and to strengthen its reputation as a socially responsible corporate citizen. In this regard, the company continuously improving its supply chain management and vendor development to further solidify its position as among the leading players in the defence, security and marine sectors.

To this end, GSCM has introduced a strategic roadmap to enhance the performance of BHIC’s supply chain This roadmap entails continuously improving the company’s supply chain processes, reducing costs along the chain, aligning current practices with international / industry best practices, and adopting new methods to enhance visibility, agility, robustness and efficiency of its supply chain. The roadmap is in line with realizing its vision to become the leading marine and defence solutions provider and Boustead Group’s EDGE 20 Transformation Plan towards strengthening prospects and unlocking values within the Group of companies.  

BHIC is proud of its contribution to the nation and with the facilities, personnel and experience we have, we are confident of our ability to continue to contribute to Malaysia’s marine, defence and security sector in addition to the nation’s socio-economic development.  

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