Speech at CXOs Lean Summit

I am happy to join you here at the CXOs Lean Summit this morning. The development of Lean Enterprise and nurturing of Lean Thinking is something close to my heart.

1. I came across the concept of Lean Enterprise some 20 years ago when I was with the EDB. The two best practices of global leaders in those days were Lean Manufacturing and Six-Sigma.
2. Some went one step further to combine the adoption of the two into what is commonly known today as Lean Six Sigma.
3. Simply put, "lean" is to strive for zero waste whereas "six sigma" is to strive for zero defect.
4. Combining the two best two practices into one, it means enterprises will not only be able to make the most efficient and productive use of all forms of resources - raw materials, water and energy, floor space and labour, and so on; but also be able to achieve maximum consistency in producing quality products and services - for every thing, every time, for everyone.
5. To these Lean Six-Sigma enterprises, the higher the business costs, the lower their wastage will be. The stronger the competition, the more consistent their performance will be. It is common sense, and makes perfect business sense too.
6. This mindset of Lean Transformation is especially relevant to Singapore today.
7. Our workforce growth has slowed, from an average of about 4% a year since 2011 to just about 2% last year. It is projected to stay at this lower level of between 1% and 2% up till 2020 and could slow down further beyond that.
8. At the same time, we need to achieve a breakthrough in productivity growth. Productivity growth in recent years was almost flat. The pace of economic restructuring will have to be faster for us to stay globally competitive.
   Against this backdrop of low workforce growth and flat productivity, we have two choices.
9. One is to depend on higher growth in foreign manpower to make up for lower growth in our local workforce and zero growth in our productivity. If we go this way, eventually, Singaporean Core will be weak and our competitiveness will also decline.
   Another option is for us to become more capable, innovative and productive. If we are able to expand and grow in a more manpower-lean way, our businesses will be driven by a healthy Singaporean Core in every major sector of our economy and society, complemented by a moderated growth of foreign manpower.
   For me, the choice is clear. The manpower-lean way.
10. However, even though the business model of Lean Enterprise is well-embraced by the global manufacturing industry, the same cannot be said of the services industry.
11. As we restructure our economy to be more manpower-lean and productive, a major challenge we need to overcome is to speed up the process of Lean Transformation among our SMEs, both in manufacturing and services.
12. This is why we need to develop a strong indigenous capability and know-how in Lean Transformation here in Singapore so that our local enterprises can have easy and affordable access to such expertise, and to come up with customised solutions to meet our needs.
13. I therefore welcome this important initiative of the Singapore Institute of Technology (SIT) and the Lean Enterprise Institute (LEI), supported by WDA, to establish the Lean Transformation Innovation Centre (LTIC).
14. The mission of the Centre is to promote and drive “lean” thinking, “lean” practices and “lean” solutions among local enterprises, with a special focus on our SMEs.
15. It will tap on the expertise and transfer the know-how of LEI and other leading institutions to Singapore.
16. The Centre will also collaborate with other “Lean Transformation” partners such as SIMTech and Human Capital Singapore (HCS), to spread Lean Thinking and best practices in our local industries.
    It will Train-the-Trainers and nurture in-house “Lean Champions” in our local companies and industries, so that over time, we can grow and sustain the business culture of Lean Transformation in our future economy.
    Besides tapping on the expertise of LTIC, SMEs that are committed to transform their operations can also apply for funding support under the Lean Enterprise Development (LED) Scheme launched in Oct last year.
17. So far, nine forward-looking industry and trade associations have been appointed as our LED partners. Today, we are pleased to have SIT to come on board as our latest LED partner.
18. In conclusion, the business and employment environment in Singapore is going through structural change. The pace of change will only get faster as we go through uncertain times ahead of us. As we continue our journey of creating the jobs of the future, nurturing the skills of the future, and developing careers of the future, I urge our SMEs to join this journey into the future. Let us all strive to be more capable, innovative and productive.
19. Most of all, let us all strive to be more manpower-lean so that the slower growth of the workforce will not slow us down in the face of global competition.
20. I wish all of you a lean and rewarding journey into the future. Thank you.