Opening Address by Second Minister S Iswaran at the Singapore Innovation and Productivity Conference 2014 and Manufacturing Solutions Expo at Suntec Convention and Exhibition Centre

Mr Douglas Foo, Acting President of Singapore Manufacturing Federation,

Distinguished guests,

Ladies and gentlemen

It is my pleasure to join you this morning at the Singapore Innovation and Productivity Conference 2014.  This year’s conference is part of the inaugural National Productivity Month, a national-level initiative to showcase and share ideas, methods and perspectives on how companies can improve productivity.  The conference theme, “Transform to Perform”, is certainly catchy and relevant, in particular for the manufacturing sector.  It underscores the call-to-action for companies to embrace continuous innovation and raise productivity to enhance their competitiveness.

The Future of Manufacturing

Manufacturing is, and will remain, a key pillar of the Singapore economy.  The manufacturing sector has played a crucial role in our modernisation plans from the 1960s, and remains an important driver for productivity growth, innovation, and trade.  Our manufacturing productivity has grown strongly since the start in 2009 of our renewed productivity drive, registering 9 per cent strong growth annually .  Precision Engineering and Transport Engineering, in particular, were bright spots, with 12.1 per cent and 6.8 per cent annual growth respectively.

While we have made progress, the global manufacturing landscape is changing, and there are several key trends and developments that our manufacturers will need to appreciate and keep abreasr of.  For example, the nature of global demand for manufacturing goods has changed.  Consumers increasingly look to manufacturers not just for products, but also for services, particular in business-to-business markets.  On the supply side, disruptive innovations such as advanced robotics and 3-D printing have not only resulted in new production possibilities, but also challenged how our manufacturing is run.

The Government’s Future of Manufacturing initiative therefore aims to help transform our manufacturing sector and establish Singapore as the Advanced Manufacturing Hub in Asia.  We will help our businesses develop and adopt new technologies in order to build up industry capabilities, in areas such as additive manufacturing, robotics, and manufacturing information technology.  This will enable companies to enhance their competitiveness, change the way they operate, and create new growth opportunities and diverse jobs for Singaporeans.

To ensure that Singaporeans have the relevant skills to take up jobs in these new areas, the Government is working closely with local research institutions, universities, polytechnics and ITEs to offer training programmes to develop our workforce into highly skilled master craftsmen.  We are also building our pipeline of Science, Technology, Engineering and Mathematics (STEM) talent to support the future growth of the manufacturing sector.

There are many ways to raise productivity

Much like the manufacturing value chain, raising productivity involves several parts, each inter-linked and dependent on the other.  Our manufacturing sector is export-oriented and we need to actively look outwards and seek out new markets.  Internationalisation is key for our manufacturers to grow their top-line and develop the scale required to maximise efficiency.

Internally, it is essential that our companies adopt best practices and technologies that can raise productivity through automation and process re-engineering.  Beyond investment in hardware, the softer aspects are equally important.  It may seem self-evident that well-managed companies do better and are more productive.  But, it is important to recognise that this is not just about the top and middle management levels.  International experience, for example in Scandinavia, has shown that line managers play a crucial role in motivating the rank and file.  In turn, motivated employees are more engaged, perform better and will be more productive.

Companies need to draw from best solutions from around the world and adapt them to local conditions

The inaugural Manufacturing Solutions Expo (MSE), which opens today, is an excellent platform for our manufacturers to source for relevant technologies and best practices on productivity.  This exhibition showcases a range of innovative solutions which will benefit the entire value chain of the sector, including key supporting services sectors such as retail, transportation and trading.

To further support our companies in their productivity drive, the Government has put in place a suite of assistance schemes to catalyse the commercialisation of new technologies.  One example is A*STAR’s Technology Adoption Programme (TAP).  Launched in 2013, TAP has helped to commercialise 12 technology solutions that have benefited a total of about 650 companies.  We will continue to facilitate collaboration between our research institutes and companies, especially our SMEs, so as to drive the adoption of productivity-enhancing technologies.

One such solution is an analog dial gauge webcam-based smart reader.  This device allows companies to automatically capture data and generate reports, thus eliminating the need for manual processing.  The productivity gains can be significant.  For instance, Component Technology Pte Ltd, an equipment manufacturer for the semiconductor industry, has reduced the time required for data entry and report generation by as much as 75 per cent.

Productivity centres and trade associations are key resources in the productivity drive

Apart from the various Government schemes, we have also established dedicated productivity centres to provide in-depth and customised assistance to SMEs from various sectors.  One such centre is the SMF Singapore Innovation and Productivity Institute (SiPi), which was established in 2012 to assist the manufacturing and engineering sector.

With SPRING Singapore’s support, the Institute has reached out to about 450 companies and provided valuable advisory services, including information on productivity concepts and productivity-related grants.  It has also helped many SMEs assess with greater clarity, their productivity gaps and areas of improvement through lean diagnostics and roadmapping.  In total, the Institute has assisted more than 48 companies on such projects.

I am also pleased to learn that having built a good momentum in promoting productivity, the Institute is also now placing greater emphasis on exploring the ‘i’ in SiPi – which is, Innovation.  SiPi is devoting more attention to business model innovation, or BMI, for short, to help companies adapt to today’s fast-changing market.  For example, it has organised various BMI-centric events such as the SiPi Think Tank Dialogue and BMI Workshop.  Earlier this year, it also undertook a research study on BMI and they will be sharing their findings at this conference.

Trade associations, such as the Singapore Manufacturing Federation (SMF), also play a key role in raising awareness of productivity and Government schemes, providing productivity advice, and promoting best practices amongst their members.  I would therefore urge SMF and our other trade associations to continue your good work in rallying the industry to boost productivity.

Raising productivity through business process redesign

It is also important to recognise that investing in technological improvement and equipment is not the only way to unlock productivity gains.  It is just one part of the equation.  Companies can also redesign their business processes to improve the performance of their employees.

In that regard, I am pleased to be presenting the WDA-SMF Productivity and Innovation Awards today.  These awards recognise companies which have implemented and achieved significant productivity improvements after completing either one of the following training courses – the WSQ Certified Productivity & Innovation (CPI) Manager programme, or the SME Quality Initiatives to Assist, Nurture and Grow (SME QIANG) training programme.  Since 2010, 134 companies have come on board on these initiatives and more than 500 individuals have been trained.

It is empowered workers like them, who can exercise initiative and take action, to achieve tangible productivity gains and improvements in their companies.  For example, employees from Wah & Hua Pte Ltd, a company that provides multi-material recycling and waste management services, realised that they spent a significant amount of time on sorting through the waste materials and tightened their processes to reduce idle time significantly.

Conclusion

In today’s innovation-driven globalised marketplace, manufacturers need to intensify their use of technology and leverage global networks to ensure sustainable growth.  At the same time, companies have to invest in continuous up-skilling of their staff as human capital has been, and will continue to be, a strategic asset in Singapore to maintain our competitiveness.

Let me conclude, by reiterating that productivity improvement is a continuous undertaking, as well as a collective undertaking. Hence, we must persevere and press on with our efforts towards productivity-driven growth.  Everyone has a role to play in this effort - the Government will continue to create an enabling environment and provide support; while companies and their management must chart, and adhere to, a clear path towards greater productivity and competitiveness.  Finally, individual employees must have the mindset to pursue continual education and skills upgrading.  It is such a collective effort that will sustain Singapore’s competitiveness and economic growth well into the future. 

On that note, I wish everyone a fruitful conference. Thank you for inviting me.

[1] Compound Annual Growth Rate 2009-2013, base year 2009.