2PS Ng How Yue at the Opening Ceremony of 2012 Global Supply Chain Business Summit

SPEECH BY MR NG HOW YUE, 2ND PERMANENT SECRETARY FOR TRADE AND INDUSTRY, AT THE OPENING CEREMONY OF 2012 GLOBAL SUPPLY CHAIN BUSINESS SUMMIT ON 13 JUNE 2012, 8.35AM, AT FULLERTON HOTEL

Dr. John Gattorna,

Distinguished guests,

Ladies and gentlemen,

A very good morning to you all.

Introduction

It gives me great pleasure to join you today for the 2012 Global Supply Chain Business Summit. In particular, I would like to extend a big welcome to Singapore for all overseas delegates. 

Singapore is committed to staying at the forefront of supply chain thought leadership and operations excellence. Thus, I am delighted that Singapore has been selected to host this pivotal event, supported by the presence of many leading practitioners.

The theme for this year’s Summit is ‘Innovation-Design Thinking-Alignment’. Hopefully, this will spur useful discussions on innovating to stay sustainable amidst the challenges facing global supply chains today.

Singapore as the Global-Asia Hub

This meeting is held in interesting times. We face an uncertain global outlook, with growth in the developed economies weighed down by ongoing fiscal consolidation. In Asia, notwithstanding rising domestic demand, growth might be curtailed by sluggish global conditions.  Nevertheless, despite the current uncertainties, Asia is enjoying good growth, and the long-term economic outlook for Asia is expected to remain positive.

The rise of Asia has also brought about a boom in intra-Asia trade.  From 2007 to 2010, intra-Asian trade has grown three times as fast – rising about 30% from US$1.9 trillion in 2007 to US$2.5 trillion in 2010[1].  According to Boston Consulting Group, Asia is projected to account for about 60% of world trade in 2015[2]. This trend looks set to continue as Asia grows from being not merely the manufacturing centre of the world, but also the largest consumer market in the world.

At the crossroads of intra-Asian trade and as the home base in Asia for many leading global companies, Singapore is well-positioned to help companies in transforming and optimising their supply chains in the region. We are in the heart of Southeast Asia and at the nexus of major shipping lanes. This enables us to effectively serve as a hub and conduit for world trade. Singapore is the world’s largest container transhipment hub, handling an estimated fifth of world container volumes. And Changi Airport is among Asia's largest cargo airport, with more than 6,000 flights to 210 destinations in 60 countries every week. In a recent study on the logistics performance of 155 countries globally, the World Bank ranked Singapore as the top logistics hub in the world.

Singapore as the Ideal Home Base in Asia

Our position is anchored not just by strong infrastructure and our strategic geographic position, but also by pro-business policies, talent and the presence of world-class service providers. These qualities enable us to respond quickly to new supply chain needs, as new business opportunities emerge in Asia.

One example of our pro-business stance is how Singapore Customs actively seek to streamline security regulations and operational procedures. Last year, the Singapore Customs launched TradeFIRST[3], which enables businesses to streamline their application and trade compliance processes.  In general, Singapore agencies – both promotion and regulation authorities – work together to deliver a facilitative environment for legitimate businesses. Such collaborative effort to welcome and help investors is one of Singapore’s key strengths, and a significant reason for companies to consider Singapore as their Global-Asia base.

But key to our success as a top logistics hub are the many world-class players here. Your companies build up the scale and complexity of the operations here, and challenge the government to keep abreast of the latest technological and business developments, and to level up our regulations and incentives to maintain our leading position.

Singapore is home today to many multinational, Asian and local logistics players and many are continuing to do well. 20 of the top 25 third party logistics providers have significant presence in Singapore.  Increasingly, many leading third party logistics service providers are locating their critical headquarter activities in Singapore to better capture the growth in Asia. For example, DHL Express has located its mission-critical Asia Pacific Quality Control Centre in Singapore to manage its complex global network of express shipments.

Such increasing sophistication of the Singapore’s logistics industry enhances Singapore’s attractiveness to manufacturers for supply chain control tower activities[4]. Companies such as Dell and Panasonic are managing their complex network from Singapore. Last year, Panasonic announced that it will be relocating its US$57 billion global procurement and logistics headquarters to Singapore. The Singapore operations will allow Panasonic to optimise the supply and management of parts and materials.

Conducive Environment for Innovation and Design Thinking

Moving ahead, we will need to seek new areas of growth for the industry in the face of increasing business volatility, supply chain challenges and heightened competition. To do so, we must help the logistics players based here raise their level of competence and sophistication. This is why we continuously engage logistics companies to address problems with fresh solutions, identify new growth opportunities and innovate new products.

Third-party logistics companies have also invested in higher-margin, higher-skilled, specialised logistics services, e.g. to manage critical spare parts, healthcare or clinical trial samples and complex production logistics. An example is DB Schenker, which recently established its global Solutions Competence Centre in Singapore to focus on developing Production Vendor Managed Inventory solutions for the Electronics and Industrial Manufacturing sectors.  This centre would be DB Schenker’s first global competence centre outside of Europe.  Through this and other efforts, we can work together to harness new opportunities across Asia, continue to grow the logistics and supply chain industry, and sustain Singapore as a leading global logistics hub.

Conclusion

Ladies and gentlemen,

The theme of this year’s summit emphasises design-thinking. With the industry becoming increasingly complex and facing multi-faceted challenges, we need a systems-thinking approach and an injection of creativity through design-thinking to find new opportunities and solutions. I will be very interested in the outcomes of your deliberations in this forum over the next three days. I am certain there will be lessons we can take on board here in Singapore. I hope that we can continue to learn from one another.

Without further ado, let me declare the 2012 Global Supply Chain Business Summit open, and wish all of you intensive and ultimately fruitful deliberations over the next few days.

Thank you.

[1] WTO, “International Trade Statistics”, 2007 – 2011

[2] According to the Boston Consulting Group. Source: Global Insight, BCG Analysis, 2009.

[3] The Trade Facilitation and Integrated Risk-based System or TradeFIRST in short, is a comprehensive assessment framework that integrates elements of facilitation, compliance and risk-management.

[4]

Supply Chain Control Tower (SCCT) is a key function that plan, manage and optimise the supply chain of a company. Activities could include demand forecasting, sourcing of raw materials, vendor management, procurement of goods or services, network planning, logistics management, and distribution of finished goods.