Discerning the supply chain of Bumiputera entrepreneurs in the Malaysian wood products and furniture industry: Status, challenges, and remedial measures

Abstract

Supply chain management has been identified as the major constraint on the growth of Bumiputera entrepreneurs in the Malaysian wood products and furniture sector. Therefore, a study to examine the characteristics of supply chain among Bumiputera entrepreneurs in the wood industry registered with the Malaysian Timber Industry Board was conducted. The results revealed that most of the respondents were micro- and small-sized enterprises, with a sales focus on the domestic and contract-market. They were predominantly wooden furniture manufacturers, who had a relatively low level of knowledge about supply chain management. The respondents also indicated that their major challenges include lack of finances, small volume of production, and the lack of government support. The factor analysis and regression analysis conducted revealed that for Bumiputera entrepreneurs to gain better supply chain management they need to improve their frequency of engagement, trust, culture, and maturity with their supply chain actors and partners. The results of this study are unique, as it implies that policymakers should take heed of improving supply chain management, to reverse the flagging fortune of Bumiputera entrepreneurs in the Malaysian wood products and furniture sector.

Elucidating the challenges to Bumiputera entrepreneurs’ participation in the domestic furniture and wood products market in Malaysia

“…3). Therefore, it is no surprise that the question of market penetration and access among Bumiputera furniture and wood products entrepreneurs in Malaysia has been a topic of intense deliberation for many years (Ratnasingam 2018;Amir et al 2023).…”

“…Although many agencies, such as the Malaysian Timber Industry Board (MTIB), Majlis Amanah Rakyat (MARA), SME Corp., and others, are mandated to assist Bumiputera MSMEs in the furniture and wood products sectors, the limited market access, small production capacity, lack of financial resources, and poor control over the supply chain among Bumiputera entrepreneurs have been identified as major hurdles for growth (Amir et al 2023). On this account, Bumiputera entrepreneurs' equity in the Malaysian wood products and furniture sector has steadily declined from the high of 42% in the mid-1980s to less than 5% in 2017, which can be considered as minor in comparison to the non-Bumiputera participation (Ratnasingam 2018).…”

“…Although the topic of Bumiputera entrepreneurs in the Malaysian furniture and wood products sectors has been studied extensively (Amir et al 2023), most of these reports available have paid little attention to market share, but rather have addressed specific problems faced by the entrepreneurs. In this respect, studies of the domestic market for furniture and wood products are grossly limited, and in the case of Bumiputera entrepreneurs' participation in the domestic market, no previous studies are available.…”

“…These factors include (i) product type; (ii) size of company; (iii) control over the supply chain; (iv) business ecosystem; (v) raw materials and workers' supply; (vi) knowledge and skills; (vii) availability of government contracts or public procurement projects; and (viii) inter-ethnicity business collaboration. The factors were identified after a series of discussions with industry experts, academics, members of the Bumiputera Entrepreneurs Association (PEKA), retailers, customers, relevant government agencies, as well as after reviewing several previous studies (Ratnasingam 2018;Amir et al 2023).…”

“…mostly through government procurement, was the other important product-type manufactured. This could be explained by the cultural aspect of Bumiputera entrepreneurs, who tend to operate individually, rather than as a collective group (Ratnasingam 2018;Amir et al 2023), which in turn limits their production capacity. The characteristics of Bumiputera entrepreneurs in the business world have been well researched (Amir et al 2023), and without collaborative networking, expanding the business is often severely constrained.…”