Proceedings of the Eastern Asia Society for Transportation Studies, Vol.

7, 2009

University-Industry Collaboration: The Role of a Research Centre of

Excellence in Malaysia
Sabariah MOHAMAD Dr Harlina Suzana JAAFAR
Director/Associate Professor Head of Malaysia Research Centre for
Malaysia Institute of Transport/Faculty of Logistics and Supply Chain/Lecturer
Business & Management Malaysia Institute of Transport/Faculty of
University Teknologi MARA Business & Management
40450 Shah Alam University Teknologi MARA
Selangor, MALAYSIA 40450 Shah Alam
Fax: +603 5544 2344 Selangor, MALAYSIA
E-mail: sabariahm@salam.uitm.edu.my Fax: +603 5544 2344
E-mail: harlinas@salam.uitm.edu.my

Abstract: This paper highlights the significant role of a university in developing wealth and
generating the economy in the move towards knowledge-based economy. The late main
economic theories emphasise that intangible elements play an important part in the economic
growth. In fulfilling this role, the government is now actively promoting the university-
industry collaboration in the hope that the transition of knowledge and discoveries could be
passed on to the marketplace faster thus offering competitive advantage for the industry.
Having considered the important role of an excellent research centre in developing the
economy of a country, more research centres need to be established especially in the process
of fulfilling the aspire of creating many research universities in Malaysia. This paper displays
various factors that have led to the creation of the Malaysian Research Centre for Logistics
and Supply Chain (MaRCeLS) at the Malaysia Institute of Transport (MITRANS), University
Technology MARA, Malaysia.

Key Words: collaboration, centre of excellence, logistics supply chain.

1. I"TRODUCTIO"

The significant role of a university in developing wealth and generating the economy has
been obvious recently (Dooley and Kirk, 2007, Mansfield and Lee, 1996). The move
towards the knowledge-based economy has been the responsible factor where intangible
assets and investments are seen as essential elements to value creation in companies and,
hence to economic wealth (Sanchez and Elena, 2006; Canibano et al, 2000). This is because
if a knowledge-based economy is mainly featured by the production, transmission and
dissemination of knowledge; universities are unique in all these processes, “due to the key
role they play in the three fields of research and exploitation of its results” (Sanchez and
Elena, 2006; European Commission, 2003a, p.2). Debackere (2000) highlights that
academic research has become “endogenised and integrated into the economic cycle of
innovation and growth” due to its role as a human capital provider and a seed-bed for new
firms and innovation (Dooley and Kirk, 2007; Etzkowitz et al, 2000). Thus, governments
are now actively promoting the university-industry interaction (Fontana et al, 2006) due to
the fact that it could encourage most effective linkages of university-industry-government.
Consequently, the transition of knowledge and discoveries could be passed on to the
marketplace faster thus offering competitive advantage for industry (Dooley and Kirk, 2007;
US Council on Competitiveness, 1998).
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

2. THE BE"EFITS GAI"ED THROUGH U"IVERSITY-I"DUSTRY

COLLABORATIO"S

Although several parties claim that the intangible inputs and outputs of universities are
immeasurable (Canibano and Sanchez, 2004), but the late main economic theories emphasise
that intangible elements play an important part of the economic growth (e.g. Solow, 1957;
Deninson, 1962; Kendrick, 1974; Freeman, 1982; Gorey and Dobat, 1996, European
Commission, 2000a). Several other researchers highlight that universities are increasing their
interaction with industry to play a greater role in the innovation system (Dooley and Kirk,
2007; Etzkowitz et al, 2000). As a result, several frameworks have been produced in studying
the best repositioning model of government, university and industry in terms of funding,
discovery and verification, exploitation of findings as well as the workings (e.g. Etzkowitz,
2003; Etzkowitz and Leydesdorff, 2000; Rappert et al, 1999). One of the best models that
could provide faster feedback and more effective discovery process is the University research
under Mode 2 model by Etzkowitz et al (2000). They emphasize that Mode 2 University is an
“amalgam of teaching and research, applied and basic research, entrepreneurial and
scholastic”. Thus, the channels of university-industry interaction can be broadly defined into
four categories, namely:

• Research support;
• Technology transfer;
• Knowledge transfer;
• Cooperative research (Santoro, 2000).

From here, the relations may also deepen since there is a shift from sponsorship to
partnership, thus offer better scope for mutual benefits (Jacob et al, 2000). Accordingly,
discoveries are taken from the university discovery process and developed by industry.

Several benefits could be gained from the collaborations. The university, for example, could
gain access to sources of research funding in addition to traditional public sources. The access
to new technologies implemented by the industry that facilitates the discovery process could
also be increased. The university may also enhance their status when competing for publicly
funded research due to the ability to attract funding. The findings of the university research
would then be verified or validated more quickly by industry and the industry data may be
used by the university (Dooley and Kirk, 2007).

On the other hand, the industry may derive the benefits in such a way that the industry can get
access to the scientific competence of the university, where the complexity of the
methodology in scientific research practiced by a university makes it difficult for any
organisation to posses all necessary competencies. In addition, the industry may gain
competitive advantage through faster channels thereby enhancing the product development
process. The industry may also have the advantage of having cost-effective research project
because the universities may already have the infrastructure apart from accessing to rich
sources of highly skilled researchers from various disciplines (Dooley and Kirk, 2007).

3. THE ROLE OF A" ACADEMIC RESEARCH CE"TRE OF EXCELLE"CE

The development of triple helix model that comprises of university, government and the
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

industry has increased the priority of the university role in the innovation process and has
resulted in a shift in perspective regarding university research. By implementing the requisite
attributes and organization, a research university could engage successfully in collaborative
research with industry partners. Several examples demonstrate the success of collaborative
projects (e.g. Dooley and Kirk, 2007; Alpkokin et al, 2007). Dundeee-Kinases Consortium,
for instance, presented one of the best long-standing and successful joint research
partnerships, which links a world-class life sciences research centre and a group of global
pharmaceutical companies (Dooley and Kirk, 2007). It is a major collaboration between the
research teams of the University of Dundee’s Life Sciences Faculty with a group of
international pharmaceutical companies. However, such collaborations require universities to
develop organizational designs that are tailored for each alliance. It should also produce
tangible benefits for all parties.

Dooley and Kirk (2007) highlight the two key measures of innovative development that drive
knowledge exchange between university research centres and industry (e.g. collaborations) to
be successful are:

1. the rate of knowledge development

2. the speed of knowledge transfer and exploitation.

Although the discovery science is pursued by university research centres, the rate of new
knowledge creations by research centres depends on several factors such as:

(1) the focus of the funded research that must be of sufficient intellectual challenge and
scope,
(2) the suitability of the area of research and the competencies of the research centre
undertaking the research.
(3) The necessary resources are available.

On the other hand, the speed of knowledge could be enhanced through the degree of close
relations between the parties as institutional barriers that impede effective knowledge
exchange could be reduced from these close relations. Other factors that can increase the
speed of knowledge transfer and exploitation is the extent where knowledge exchange can
flow bi-directionally between parties for mutual benefit.

The European Union, on the other hand, encouraged a set of conditions in achieving a real
excellence in research and teaching. They include:

• Long-term planning and financing;

• Developing interdisciplinary capabilities; and
• Implementing efficient management structures and practices, which implies an
“effective decision making process, a developed administrative and financial
management capacity, and the ability to match rewards to performance” (European
Commission, 2003a, p.17).

4. MALAYSIA RESEARCH CE"TRE FOR LOGISTICS A"D SUPPLY CHAI"

Having considered the important role of an excellent research centre in supporting the needs
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

of the industry and thus developing the economy of a country, more research centres need to
be established especially in the process of fulfilling the aspire of creating many research
universities (RU) in the country.

Being the only research institute in transport and logistics in Malaysia, The Malaysia Institute
of Transport (MITRANS), which is based at Universiti Teknologi MARA was established in
1982 with the main objective of carrying out research, consultancy and training in the fields of
transport including public, freight, logistics, etc. As the Institute is expanding, the need to
reorganise the structure of the management was more intense so that the research would be
more focused and thus more specialised research experts could be developed. .

As results, under the new organisation restructuring of MITRANS, a Malaysia Research

Centre for Logistics and Supply Chain was set up this year, moving in concord with the needs
of the logistics and supply chain industry.

Table 1 Factors driving the setting up of Malaysia Research Centre for Logistics and Supply
Chain (MaRCeLS)
No Drivers for MaRCeLS Establishment
1 Multiplier effect
The World Bank estimated that a 10% reduction in transport costs can increase trade by
20%.
2 The increasing contribution of the logistics industry to the economy.
• Specifically, it contributed 8.8% to the country’s GDP and it is estimated that it
will contribute 12.1% to the GDP in 2020.
• Overall growth of 8.6% during 2006 to 2020
3 The increase in cargo volume to be handled by the year 2020 under IMP3 targets..
• Increase in total marine cargo volume by more than three-fold, from 252 million
tonnes in 2005 to 751 million tonnes.
• Increase in the volume of air cargo trade by more than two-fold, from 1 million
tonnes in 2005 to 2.4 million tonnes in 2020; and
• Increase in the cargo volume handled by railway freight by more than four-fold,
from 4 million tonnes in 2005 to 18.6 million tonnes.
4 Issues pertaining to Liberalisation of Logistics Sector under ASEAN Framework
Agreement on Services (AFAS) by the year 2013.
• The coverage of logistics services for liberalisation.
• Issues related to trade and customs facilitation.
• Expanding of the capability of logistics service providers.
• Human resource development.
• Enhancing multimodal transport infrastructure investment.
5 Domestic industry issues
• Lack of follow up and coordination
• Lack of sophisticated management techniques among the supply chain
companies.
• The problems with Information Technology (IT)/Electronic Data Interchange.
• Lack of skilled manpower.
• Lack of dissemination of information with regards to the development and
expansion of the logistics industry.
• No single established source of logistics data and information.
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

• Lack of assistance to local services providers.

• Lack of research and development (R & D) of the industry.
• Lack of regulatory forms to facilitate the industry.
6 • The needs for an information focal point for students and educators from related
disciplines as well as other interested parties to serve the growing needs of the
industry.

4.1 The "eeds for an Establishment of Malaysian Research Centre for Logistics and
Supply Chain (MaRCeLS)
As referred to Table 1, various factors have contributed to the needs in the establishment of
the Malaysian Research Centre for Logistics and Supply Chain, which are as follows:

• The need for an efficient logistics and supply chain management system to enhance the
economic development.

Being in a competitive global market environment, it is no doubt that transport and

logistics plays a critical role in facilitating the country’s economy (MIMA, 2004).
Anonymous (2003) highlighted that Malaysia could ultimately stimulate further
national growth by reducing the supply cost. This has been indicated by the World
Bank that a 10% reduction in transportation costs can increase trade by 20%.
Similarly, the work by the McKinsey Global Institute on productivity improvements in
industry sectors across globe indicates that such efficiency improvements are likely to
translate into a Gross Domestic Product (GDP) growth effect. This creates a virtuous
and perpetuating effect on the economy.

Specifically in Malaysia, Anonymous (2003) predicted that Malaysia could generate

12.1% to the GDP, which is equivalent to about RM9-11 billion over the next decade.
Since then, the awareness of the contribution and importance of the logistics and
transport industry became obvious in the early 2000.

Having considered the number of critical issues raised up by the practitioners in the
logistics and supply chain industry, there is a strong need for a creation of MaRCeLS
that focuses on research related to the development and commercialisation of the
industry. The research centre would also provide a forum of discussing issues and
solutions in determining the direction of the industry. Thus, it is the intention of this
proposed Centre to devote itself towards exploiting the extensive network of experts
and resources available in UiTM to facilitate the development ‘knowledge through
research’.

• Domestic industry issues

Despite its potential growth, the Malaysian industry players have identified various
issues due to the fragmented development of the logistics and supply chain practices as
well as the uncoordinated implementation of its regulation (MPC, 2008; Thong, 2007;
MIMA, 2004; Anonymous, 2003). Various issues raised by the practitioners such as
the lack of follow up actions and coordination. Issues involving one sector have not
been looked into in total as to how it will affect other sectors in the logistics industry
as a whole so that the logistics industry will benefit from the shared information. This
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

could be mainly because of the inexistence of local branches especially at the

important corridors throughout the country, for example the Northern and Southern
area (Thong, 2007). This is crucial for the newly set up Malaysia Logistics Council
(MLC) in allowing any coordination actions to be taken.

Lack of sophisticated management techniques among the supply chain companies.

The lack of emphasis on service excellence as well as the combination of
developments and trends has consequently given rise to the need for more
sophisticated management of the supply chain companies. This is a challenging task
for the companies to acquire sophisticated management and marketing knowledge as
well as implementing them in bringing the Malaysian logistics industry upfront
(MIMA, 2008; MIMA, 2004).

Problems with Information Technology/Electronic Data Interchange. The government

has made significant progress toward its vision of integrating many players in
establishing a fully paperless custom clearance and trade facilitation through EDI.
However, problems still arise with regard to (1) costly EDI pricing and charges due to
in-transparent mark-ups by the freight forwarders, and (2) overall performance and
functionality of the system. It is important to strengthen the linkages and integration
among the transport and logistics networks at promoting an efficient logistics practice
and development through the establishment of e-logistics (MPC, 2008; MIMA, 2004;
Anonymous, 2003).

Lack of skilled manpower. Both the Northern and Southern Freight Forwarder
Associations claimed that the existing hauliers do not have appropriate experiences
and skills in introducing the new services and bringing innovative solutions to the
higher-end clients (MIMA, 2008; Thong, 2007; MIMA, 2004).

Lack of dissemination of information with regards to the development and expansion

of the logistics industry. The activities of various sectors have not been made known
to all sectors and thus hindered the possibilities of joint-venture and working together
towards the same direction. (e.g. as to how their services and facilities can be
channelled towards the success of the proposed development and contribute towards
positive participation at the same time. It is important because the information
obtained with regard to the new industrial estates or expansions and the establishments
of new investments could create awareness among the practitioners, who can then
advised the MLC as to how they can participate in the new business opportunities
(Thong, 2007).

"o single established source of logistics data and information. Presently, no single
established source of logistics information and data is available. Each sector has its
own limited data, and there is a lack of information of the industry players, facilities,
services and capabilities of the sectors. The only data that might be available is the
data on membership (MIMA, 2008). A record of such useful information is important
so that the coordinating body could analyse the shortcomings of each sector and set up
strategies to rectify such weaknesses. The expansion plans, new IT enhancements and
the expansion of activities of logistics providers, both locally and internationally
should be more transparent to the industry players so that all the current information
could be updated (Thong, 2007). The industry database is also crucial for accurate
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

assessment of the industry, better monitoring, assisting company in investment

decision, and improve decision making (MIMA, 2004).

Lack of assistance to local service providers. One of the main problems faced by the
local service providers is the inability to participate in international logistics activities
due to limited IT linkage, overseas corporate network and capital investment (Thong,
2007). The limited range of logistics services would restrain the growth of small
domestic market. As a result, they only confine to operate within the nation’s borders
(MIMA, 2008). Due to competition, security reasons and corporate policies issues, the
International Freight Forwarders (IFFs) are not helping the local service provider in
terms of sharing their knowledge and development plans towards enhancing the
industry (Thong, 2007).

Lack of research and development (R & D) of the industry. Presently, the research and
development of logistics and supply chain management in Malaysia have received less
attention. It is important to prioritise research and development so that they could
become the focal point for study in any aspect of logistics and supply chain
management such as marketing, management, operations management, insurance,
health and safety aspects, etc.

Lack of regulatory forms to facilitate the industry. A comprehensive approach in

standardising the regulatory forms is vital as to facilitate the smooth movement of
freight through national and international logistic chains (MIMA, 2008; Anonymous,
2003).

• The needs for an information focal point for students and educators from related
disciplines as well as other interested parties to serve the growing needs of the
industry.

Realising the benefits that the logistics industry could bring to the Malaysia economy,
there has been a recent growth in the number of logistics and supply chain education
programs in several universities and colleges, primarily at the undergraduate and
postgraduate level such as the University Teknologi MARA (UiTM), Universiti Utara
Malaysia, Universiti Selangor (UniSEL), Universiti Collge Sedaya International
(UCSI), etc. Although these universities and colleges offer some courses or education
programmes related to logistics and supply chain, these efforts seem fragmented and
are not well coordinated, in which there has been a lack of information focal point for
students and educators. Duplication of courses might also occur. This would make
some of the important areas would be given less attention. The proposed Centre will
serve as a teaching, research, and information focal point for students and educators
from related disciplines as well as for practitioners and other interested parties.

4.2 Objectives of MaRCeLS

Several objectives underpin MaRCeLS are as follows:

• To serve and a national and international focal point for advanced research in the field
of logistics, supply chain management and transportation management and
transportation management.
• To serve the Centre’s role as comprehensive logistics information centre.
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

• To provide a development and training human resources for logistics by providing a

broad range of long and short term training courses, designed to meet the various
needs of the individuals, companies, organisations as well as the country.

By facilitating the development and promotion of logistics and supply chain management
research as well as bridging the gap between the academia and the industry, the Centre would
drive the development of the logistics industry as well as ensuring the sustainable growth of
the industry.

4.3 Proposed Activities in MaRCeLS

The main programmes of the Centre are three-fold namely education, research and
consultancy services to the industry.

The critical part of the Centre’s educational mission is to develop an interdisciplinary

approach so that various issues faced by the industry could be tackled effectively and
efficiently. It is because logistics and supply chain is a highly complex discipline that requires
the integration of knowledge and understanding from a broad variety of disciplines. The
diverse insights offered by engineering, planning, insurance, law, operational management,
finance, economy and others can greatly contribute to an efficient logistics and supply chain
management. To achieve this, the Centre is now working closely with various faculties and
researchers across the university in developing postgraduate research programmes,
international conferences and fellowship programmes. The areas of postgraduate research
involves a multidisciplinary approach covering Operations Management, Network Modelling,
Systems Development, Design of Vehicle & Warehouse premises, Automation of Logistics
Activities, Human Resource Development, etc. It is hoped that more multidisciplinary
logistics experts could be provided to the industry from these postgraduate programmes.

In research, the Centre will strive to advance understanding and expanding knowledge of
logistics and supply chain management through research on topics relating to logistics and
supply chain management theories. The bulk of modern scientific logistics and supply chain
theories will be applied to the current research projects. There is a great deal of studies that
need to be done towards bringing the industry to an efficient logistics and supply chain
management.

The Centre will also offer four major services to the practitioners in the industry at large,
namely the research consultancy, customised/training programmes, professional development
courses and conferences.

5. CO"CLUSIO"

This paper highlights the benefits and importance of having an excellent research centre as
well as the factors driving to the establishment of such centre in the country. The scientific
research (true information based on data obtained) output based on the government-
university-industry collaboration allows various recommendations and suggestions be made to
improve the implementation of the industry as well as provides inputs for policy formulation.
However, the organisational designs should provide flexibility and high productivity to the
collaboration parties as well as producing tangible benefits to all parties.
Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

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