Mr Lee Yi Shyan at the Quality and Standards 2011 Conference, 29 June 2011

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE, TRADE AND INDUSTRY AND NATIONAL DEVELOPMENT, AT THE QUALITY AND STANDARDS 2011 CONFERENCE, 9AM, 29 JUNE 2011, GRAND COPTHORNE WATERFRONT HOTEL SINGAPORE

Mr Edwin Khew,

Chairman of Singapore Standards Council

Mr Renny Yeo,
Chairman of Singapore Accreditation Council

Distinguished Guests

Ladies and Gentlemen

Good morning. I am pleased to join you at this Quality and Standards 2011 Conference. I note that there are a number of foreign delegates attending this conference. Some of you have come from as far as Europe and Americas. Others from around the region. Welcome one and all.

Enhancing Productivity and Competitiveness through Quality and Standards

You have come at an opportune time. The valid and key reason is of course that this Conference wants to hear your insights on quality and standards. The other important reason I can think of is that June is the beginning of our durian season. Yes, you are in for a treat!

Let me share an analogy that is close to my heart - the durian industry. If you have been visiting durian vendors in the recent years, you would have been confronted with a number of varieties and prices. There are D2, D13, D24 priced at $3.00 to $5.50 per kg; XO and Golden Phoenix at $8-$10 per kg; and Mountain Cat at $12-16 per kg. If you are like me, and love to eat durians but don’t exactly know what the classification mean, you will be comforted by the fact that the durian industry at least appears to be moving towards the adoption of quality and standards. Maybe next year, they could consider attending this conference!

The industry classifies durians according to the fruit’s characteristics, namely taste (sweetness or bitterness), texture (moist or dry), size (of the fruit and seed), intensity of aroma, etc. Never mind if their standard specification or quality controls may not be as robust as we would demand here at this conference. The benefits of the classification are clear. The vendors can now better communicate their product attributes, target sales at different segments, raise overall revenue and create loyalty for a specific “brand”. Of course, implied in the classification are also certain characteristics, such as repeatability, quality and trusted-ness that the fruits are supposed to carry.

I believe the same emphasis on trusted-ness would similarly create value for other products and services, just as it has worked for the durian trade. There are numerous examples around us. Japanese cars and consumer electronics. German craftsmanship and machineries. Swiss watches and chocolates.

Even “Made in or by Singapore” is now a brand. Behind this brand is the promise of trusted-ness and quality, which in turn is built upon standards and process discipline.

This is the reason why SPRING launched the $20 million “Quality for Enterprises through Standards” (QUEST)programme. The programme co-funds companies in adopting new and niche standards in emerging areas such as energy and environment. Implementing standards in these new areas will require a company to change its processes, train its staff or even invest in new equipment.

Over the years, SPRING has helped to build a robust national Quality and Standards infrastructure, to help Singapore enterprises undertake quality and standard initiatives.

Building Trust in Enterprises

One such beneficiary is NTUC Fair Price. Fair Price is Singapore’s largest supermarket chain, with over 240 outlets and more than 8,000 employees. It has a market share of more than 50 per cent and a turnover of over $2.2 billion.

A recent study by the International Organization for Standardization (ISO) concluded that Fair Price had achieved higher efficiency, process consistency and product reliability through its Quality and Standards programmes. As a result, the supermarket chain reduced operational costs by some $13.6 million over the past 10 years.

One of the standards Fair Price adopted was the cold chain management standard for dairy products and chilled pork. Through it, Fair Price ensured temperature consistency in the handling of dairy products in its supply chain involving different suppliers. It led to longer product shelf life, less spoilage during storage and delivery, and lower customer returns. With better temperature control systems in place, Fair Price is also able to source widely and from further away. Fair Price also achieved annual cost savings of some $780,000 through cold chain management standard.

Fair Price also used standardized pallet sizes and carton barcodes to save on storage space and speed up the fulfillment of orders. Savings arising from the standardization exercise have been passed on to their customers.

Building Trust in Products and Services

Another beneficiary of Quality and Standards implementation is the Private Security Industry. By way of background, there are about 50,000 intruder alarm systems installed in commercial buildings and offices in Singapore. Most of these security alarm systems are linked to Central Alarm Monitoring Stations (or CAMS), which are operated by the Private Security Industry. When an alarm is sounded, the CAMS operators will in turn alert the Police. Last year, the Police responded to some 1,560 calls through CAMS, of which 1,540were found to be false alarms. Only 20 (less than 2 per cent) were real alerts.

The high false alarm rate was due to a combination of factors, mainly from inferior hardware and the improper installation of the CAMS. To address the high rate of false alarms, Police and the Private Security Industry players revised and implemented the Singapore Standard 558 (SS 558) Code of Practice for the construction, installation, operation and maintenance of intruder alarms systems. They are confident that the number of false alarms would be significantly reduced.

Building Consumer Confidence in Product Safety

In addition to the economic benefits, the adoption of Quality and Standards systems also provides social benefits such as consumer protection. In April this year, the Government introduced the Consumer Goods Safety Requirements (CGSR) to enhance the safety of consumers. The regulations cover general consumer goods ranging from toys and children’s products to furniture and sports and recreational equipment. The regulations empower SPRING to stop the supply of consumer goods that do not meet applicable international safety standards.

Conclusion

The common theme among the three examples mentioned above -- Fair Price, the Security Industry and Consumer Goods Safety – is trust. Yet trusted-ness can only be achieved if our industry and enterprises are disciplined in their approach to and adoption of quality and standards systems. So let’s make full use of today’s conference to learn the best practices and insights to improve our productivity and competitiveness.

On this note, I wish all of you a fruitful and effective conference.