scale company operates with capitals of less than RM250,000.00, and a medium-scale company with capitals of RM250,000.00 to RM1,000,000.00. A small-scale
company’s annual turnover is between RM250,000.00 and RM10,000,000.00, and a medium-scale company’s annual turnover is between RM10,000,000.00 and
RM25,000,000.00. Companies under those limits are considered micro-scale industries, whereas companies beyond those limits are considered large-scale
industries Shamsuddin et al., 2004.
As with food processing industries, marketing is done either directly or through government, semi-government or private agencies. According to SMIDEC,
the Malaysian government has established a good network to facilitate trading between the different food manufacturing partners in the global halal market, in the
ninth Malaysian Plan. Malaysia is one of the moderate Islamic countries in the world with the necessary infrastructure, a well-diversified muslim’s workforces, and related
resources. Therefore, Malaysia is able to provide a stable Islamic hub at a relatively low cost to produce, promote, export and manage their halal foodstuffs, for any
international or multinational halal food processing industries.
1.2.1 Contribution of Small and Medium Industries
The largest portion of manufacturing firms fall into SMI categories and the SMI businesses are the backbone of the large-scale industry. Therefore, SMI is the
ultimate kernel of the economy system Shamsuddin et al., 2004. According to the Federation of Malaysian Manufacturers’ Directory in 1999, SMI employ 60 percent of
668,174 employees in Malaysia. From an annual sales value, SMI’s share 64 percent of the sales in the country. Employment and sales were expected to grow rapidly until
now.
In Malaysia, there is evidence that SMI account for about 35 percent of the country’s gross domestic product Kushairi, 2008. Ainul 2008 reported that the
share in gross domestic income of SMI is expected to increase from 35 percent to 37
percent by 2010. This is because it is evident that many SMI are starting to export their products to international markets. The Malaysian government has realized the
importance of SMI contribution and it will have to strive hard in order to achieve the country’s vision by the year 2020. Reportedly, there are a few thousand SMI firms in
Malaysia across different industry groups. However, Shamsuddin et al. 2004 commented that there are not many studies on maintenance management have been
conducted for SMI.
1.2.2 Effects of the Machinery Failures
The primary functions of most machines in industries are concerned, in some way, with the need to earn revenue or to support revenue-earning activities. Poor
machinery maintenance will lead to more emergency breakdowns. The breakdowns affect the production capability of physical assets by reducing output, increasing
operational costs, and, thus, interfering with customer services. Machinery failures in SMI production lines will increase the operation cost and reduce their profit margin.
There are five reasons why downtime can affect factory operations Moubray, 1997:
i Total output: where the production people have to work extra time to
recover the volumes and losses. Imagine if the plant is already fully loaded;
ii Quality control: where failures cause materials to deteriorate. Products
which do not reach certain quality specifications have to be rejected; iii
Operating costs: in addition to the direct cost, repairing the machines will increase the use of energy or it might involve switching to more
expensive, alternative solutions; iv
Sales: where the prices of the end products have to be increased to recover the downtime as well as the production losses; and
v Customer service: frequency of machine failures shows the reputation
of the factories. Poor service may cause customers to shift their business deals elsewhere.
In brief, the effects of downtime are much greater than the cost of repairing the failures. For example, if a filling machine fails in a SMI production line, the end
products will spill over. This also results in labour safety issues as well as business losses.
1.3 Computerized Maintenance Management System
