Proton Supply Chain Challenges Essay

Words: 7689
Pages: 31

Term Paper : Proton Supply Chain Challenges

Table of Contents

1.0 Company Background 1-4
2.0 Problem Statement 5-7 3.0 Significant of Study 8-10 4.0 Proton Supply Chain Weaknesses 11-18 5.0 Recommendation 19-29 6.0 Conclusion 30 7.0 References 31-32

1.0) Company Background
First national car, Proton Saga project was formed embark from the Look East Policy. Perusahaan Otomobil Nasional Sendirian Berhad (PROTON) was formed in 1983 as a company of national car to manage the operation of the national car project. "The Proton Saga is more than just a quality automobile. It is a symbol of Malaysians as a dignified people" quoted by
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Throughout the 1990s proton continued to release new models. The 12- valve Megavalve model launched I 1990, followed two years later by the Iswara family sedan. In 1993 the sporty Wira hit dealerships. A change in ownership came in 1995, when Tan Sri Yahaya Ahmad’ DRB acquired Proton’s parent company HICOM for US$ 688 million, taking control of Proton. Despite the takeover, business at Proton continued usual. However, the Malaysian government’s protective measures, which successfully shielded Proton from the full force of competition, encouraged the company to adapt many uncompetitive practices. From its beginning, Proton relied on technology transfer from established overseas partners, particularly Mitsubishi. Besides, Mitsubishi also supplies the company with key components.
The Mitsubishi alliance included several inherent drawbacks. Imported Japanese components compromised nearly one third of the cost of a Proto car, exposing manufacture to fluctuating Yen values. In an attempt to reduce its dependence on Mitsubishi, Proton purchased an 80% stake in UK engineering and manufacturing company Lotus Group International in 1996. In 2003, Proton obtained the remaining 205 stake in Lotus, making it a wholly owned subsidiary. The move provided the company with significantly upgraded engineering and design capabilities. Unfortunately, Proton chose to simply borrow Lotus technical