Mr Lee Yi Shyan at the Quality and Standards 2010 Conference, 23 Aug 2010

Address by Mr Lee Yi Shyan, Minister of State for Trade & Industry and Manpower at the Quality and Standards 2010 Conference on Monday, 23 August 2010 at 2:15pm at Grand Hyatt Hotel

Mr Edwin Khew, Chairman of Singapore Standards Council

Distinguished guests

Ladies and gentlemen

Good afternoon. I am very pleased to join you at the Quality and Standards 2010 Conference.

This year’s theme, “Quality and Standards for Productivity”, is very apt. Our economy is back on track and the latest forecast for GDP growth in 2010 has been set at 13 to 15 per cent. This is good news. But can we achieve the same results next year? How can our companies stay competitive and do even better?

One key strategy to achieve sustainable, long-term growth is to boost our productivity rate. Productivity is the ratio of the output (often expressed in dollar rather than unit terms) we produce, to the inputs we use.

Productivity and its Relation to Standards and Conformance

Therefore standards and conformance are key in helping to raise productivity levels. They allow for greater efficiency, facilitate market access and lay the ground for innovation. Let me now elaborate on the role of standards and conformance in relation to efficiency, market access and innovation.

Raising Efficiency

Many of us are familiar with the ISO 9000 (International Standardization Organization) standards. This series of standards is the most established quality management framework in the world. It is used by some 897,000 companies in 170 countries worldwide. It gives companies the assurance that they have in place the systems to ensure consistency in the quality of their products and services. Although compliance is not compulsory, it has become a requirement for companies in many parts of the world, across different industries.

But just meeting requirements is not enough. To have a competitive edge, companies have to rise up to higher levels of efficiency. Let me illustrate this with examples of improvements that led to greater supply chain efficiency.

The first involves cold chain management standards developed for vegetables, chilled pork, and milk and dairy products. These standards ensure the safety and freshness of these perishables as they are transported from the farms to the supermarkets. The standards help to reduce spoilage and wastage and extend the shelf life of the products. In fact, six companies are going to implement the cold chain management standard for vegetables. The cost saving will total some $30 million over three years.

The second example involves the supply of bunker fuel in our port. We developed bunkering standards that cover the management of the entire supply chain for bunker fuel in Singapore. The standards enable process efficiency in bunker fuel management. They start from procurement control to the delivery of bunker fuel to vessels in the port. In addition, they also specify the procedures and requirements for various checks and the documentation for the entire bunkering operation. With this, customers are assured of the correct quantity and quality of the bunker fuel.

As a result, Singapore has become one of the most efficient and preferred bunker ports in the world. Last year, 36 million tons of bunker fuel worth more than $20 billion were unloaded here. This is a 4.2% increase over 2008 despite the poor economic condition worldwide.

I am happy to note that our bunkering standards were the first to be developed in the world. In fact, the ISO Standard on Procedures for the Transfer of Bunkers to Vessels, was only just released earlier this year. I understand that the Bunkering Technical Committee is looking into new technology-based solutions to further improve efficiency in the industry.

Enhancing Market Access

Besides raising efficiency, standards and conformance can also create value by ensuring access to existing markets and opening up new ones. For example, consumers in many markets are becoming increasingly concerned about the impact of economic activities on the environment. Conformance to international environmental standards can thus help businesses address such concerns and gain greater access in these markets.

Indeed, environmentally-conscious companies are now using the Forest Stewardship Council - Chain of Custody, or FSC-CoC, certification to qualify their suppliers. This certification traces the entire chain of production of a wood product. It gives assurance that the product purchased adheres to responsible and sustainable use of forest resources.

With the FSC logo on their products, companies gain better access to environmentally-conscious markets like Australia, the European Union and the United States. I understand that six companies from the printing and paper industries have also just completed a pilot project to streamline processes. They expect to realize benefits of some $5 million over three years.

Catalyzing Innovation

Standards and conformance can also catalyze innovation. Contrary to popular belief, standards and conformance stimulates, not impedes, innovation. In fact, it underpins the acceleration of innovation and adoption of new technologies. When a new technology establishes itself as the de facto standard, this expedites the diffusion of the technology. It also provides a common platform for different sectors to collaborate. Sharing knowledge and creating effective synergies will speed up the time-to-market for new products and services.

Let me give you an example. Most of you are familiar with MP3 - it is now the de facto standard for the transfer and playback of digital music. Only with the establishment of the MP3 standard did the internet music business take off. It has since transformed the entire music industry and underpins the successes of online music providers like iTunes.

Another example is the ez-link and NETS cards which are a result of the Singapore Standard 518 CEPAS, or Contactless e-Purse Application standard. It ensures inter-operability of e-payment schemes from different card issuers and payment operators. This has resulted in a “win-win-win" for consumers, merchants, and the card issuers. With just one reader and one card, this translates into lower costs and more counter space for retailers. It also means greater convenience for the public who need only one card for public transport, motoring and retail payments.

Standards and conformance can also promote innovation in yet another way. It facilitates sharing of experimental findings between collaborators and the acceptance of test results by the authorities. For example, conformance to Good Laboratory Practice (or GLP) provides a platform for common understanding. This allows scientists to build on each other’s research and for regulatory authorities to ascertain the validity of test results. Thus, standards and conformance can help speed up acceptance of a new product or technology and lead to further research on more innovations.

Innoheart Pte Ltd is one such newly registered GLP facility that has benefited from the programme. This local start-up is one of the first in Asia to use innovative medical eluting stents for implantation in non-clinical studies. With the GLP registration, it is able to gain a foothold in China, India, Vietnam, Europe and US.

Adopting Standards and Conformance for Higher Productivity

To help businesses leverage on standards and conformance to improve productivity, SPRING has introduced the “Standards Implementation for Productivity” (SIP) programme. Five projects involving some 30 companies have been completed over the last three years. In fact, the collective assessment of benefits from these projects amount to some $144 million.

The government remains committed towards providing support for the implementation of standards to enhance productivity and innovation. To enable more companies to do so, SPRING will be extending the SIP programme to cover wider implementation of standards and technical regulations. Our companies must seize the opportunity to tap on the scheme to increase their competitive edge.

On this note, let me wish all of you a full and productive conference ahead. Thank you.