Power of standards

BACK in 1961, a humble electrical repair shop opened its doors in Sekinchan. It’s name? Khind Holdings Bhd.

Today, Khind is one of Malaysia’s most recognised appliance exporters.

How, you may wonder, did it grow to that extent? Well, many reasons.

But when it came to exporting products of high standards, Sirim Bhd was a key driver.

Sirim’s testing and ISO certification provided Khind the “passport” it needed to not only prove globally that its products were good, but also that they met the standards needed.

Using that as a stepping stone, the homegrown brand has reached 50 countries! 

Now, what could this mean for businesses in the country today?

Firstly, it’s testament that Malaysia has indeed established itself as a global business powerhouse.

The recent IMD World Competitiveness Ranking states Malaysia climbed to the 15th place out of 70 economies globally.  

So many businesses here today face some real barriers to growth.

There’s tariffs, especially ones involving the United States and China, there’s the lack of skilled talent, and lots more. 

But aside from that, businesses are beginning to recognise that market access is more of a technical question, rather than a commercial one. 

When a good product is not enough

For a local company, whether it’s a large corporation or a medium-sized enterprise, it is no longer enough to just have a product, especially when trying to penetrate larger or global markets. 

The product must have the right standards. Processes must be verified. Quality and safety aspects must be demonstrated.

Its facilities may have to be inspected, its systems certified and its products tested against requirements that can differ from one market to another. 

This technical foundation is such a vital part of Malaysia’s competitiveness.

Arguably, Malaysia already has so many of the ingredients needed to compete.

But businesses need the technical credibility that buyers, regulators and supply-chain partners’ demand.

That credibility does not necessarily come from the size of a company or the sophistication of its marketing. 

The reality is, larger businesses may have a little more leeway because they are financially strong or have the manpower to hold steady for the future. But for smaller businesses, this can prove to be a significant hurdle.

A business may have developed a product that is commercially viable and technically sound, but that does not automatically mean a multinational buyer will want it. 

A buyer may want a Malaysian supplier because it is cost-competitive, geographically well-positioned and capable of producing at scale.

But it may also need assurance. Is the product safe? Does it meet the required specification? Is the manufacturing process consistent? Can quality be maintained at scale? Can the supplier demonstrate compliance with the standards expected in the buyer’s market?

These questions are becoming increasingly important as supply chains become more sophisticated and companies diversify their sources of supply.

For businesses hoping to move beyond the domestic market, technical compliance can therefore, become a form of market currency.

Standards as a market enabler

This is where Sirim comes into the picture.

For more than five decades, the national testing, certification, industrial research and technical training institution has been building an infrastructure that often operates quietly behind the scenes.

Sirim is an enabler to the industry. Its role extends beyond simply testing products.

A Sirim stamp serves as a symbol of trust.

Chances are, the water kettle you used to boil water for your Milo in the morning had the label. The cars you drove would have a Sirim mark on the tyres.

In 1975, we issued the very first Sirim stamp – for motorbike helmets.

Why, you may wonder, is it important? Shouldn’t it be just enough to have the Sirim stamp and get products exported?

In this climate? No, it is most definitely not enough.

While some may opine that Malaysia is doing well enough, it still needs to move up the value chain.

The country’s industrial base has traditionally been strong in areas such as electrical and electronics, manufacturing and commodities.

But the next phase of growth will require Malaysian businesses to compete in increasingly demanding areas, where technical specifications, certification and standards can be as important as price and production capacity.

Global supply chains have become much more sophisticated. Large manufacturers cannot simply choose suppliers based on price.

They carry risks relating to product failure, safety, cybersecurity, environmental standards, traceability, sustainability and regulatory compliance. 

Proving we can

Before we start thinking, this is all too hard, let’s not forget that there are homegrown brands that have successfully gone international.

Look at Khind and where they’re at today.

Participating in these opportunities require more than simply being located in the right country. Companies have to demonstrate they belong in the supply chain.

This is where standards can act as an enabler rather than a barrier. 

Today, standards are increasingly intertwined with areas such as digitalisation, sustainability, advanced manufacturing, energy efficiency and emerging technologies.

For Malaysian businesses, the message is increasingly clear: access to markets is not determined solely at the negotiating table.

It’s determined much earlier, be it in a laboratory or factory floor.