Speech at Launch Of A New Lean Enterprise Development (LED) Project For The Food Manufacturing Sector - Industry Development, Enhancement And Advancement Programme For SMEs (IDEAS)

Mr Teo Ser Luck, Minister of State for Manpower, Agilent Technologies

Mr Tan Choon Shian, Chief Executive, Workforce Singapore,

Mr Soh Wai Wah, Principal and CEO, Singapore Polytechnic,

Mr Chow Woai Sheng, Singapore Country General Manager, Agilent Technologies

Distinguished Guests, Partners and Friends,

Good morning.

1. I am very happy to be here today.
2. After overseeing the LED for almost a year now, I realise a lot of companies that really need help are the SMEs. The MNCs have a global network and their resources are widespread and well-balanced. They also have good governance as well as a management structure that supports their workforce in terms of coordination of the workforce and how they allocate the resources. They have lots of scaling opportunities as well as relocating opportunities.
3. But SMEs don’t because of the size of their companies, a lack of presence internationally, and the lack of financial resources. Even though we make it easier for them to access capital, they just could not do it.
4. Now, it is the critical time for our economic transformation. This economic transformation is not just about the productivity movement, but with the change in our GDP, the growth is slowing, there is a tighter labour market including talent, our SMEs find it tougher. We realise SMCs have been established in Singapore for so many years, since our independence, we have started this whole industrial development.
5. Now if the MNCs can give the SMEs a helping hand, this will make that difference, just like what Agilent is trying to do, it will go a long way and the impact is greater. It will help the SMEs take leaps and bounds towards scaling greater heights and making greater change. That is why I’m excited to be here today.
6. The LED Scheme today has about  more than 1,400 companies who have signed up. They have implemented different processes, championed job redesign and brought new developments or technology into the company to keep the company lean. Sometimes, you may think that the workforce needs to increase but most of them maintain a similar workforce, thinking that the demand in future will come up. They strengthen their internal processes to become more efficient and effective, so as to prepare for the future. That is encouraging itself because they forecast that there will be a better time ahead.
7. In the Ministry of Manpower, we prepare ourselves to help them, so we tweak our policies and make our policies a little bit more flexible. In case in these two years as they are transforming, we allow them to in fact increase manpower to help them do the transformation. While they implement automation, they also need manpower for a parallel line of their operations for the phase-in transition and change. So between policies, flexibility, as well as all the grants and schemes combined together, we have a LED scheme for all our SMEs. With MNCs like Agilent coming in, it will help give them a boost. That is exactly why we are very excited about the Industry Development, Enhancement and Advancement Programme for Small and Medium Enterprises (IDEAS), we know that it will really help but we just need more MNCs who are interested.
   
   Need to Focus on Innovation to Support Growth of Singapore’s Food Manufacturing Sector
   
   
8. I am glad that today, we are here to help the food manufacturing sector. It is a very important sector - 860 establishments employing about 30,000 workers¹. Jobs are most important to us. While on a macro level, it has contributed $10.4 billion in total output and $3.4 billion in value-added² to Singapore’s economy in 2014. Globally, we have also gained a strong reputation for maintaining high standards in quality and food safety, and are well positioned as we aspire to become the next food hub within the region.
9. The food manufacturing sector will play an integral role to help Singapore position itself as the next food hub.  We have been able to achieve good growth with our strong emphasis and investments on food safety technology, manpower and processes. However, to sustain growth, we have to differentiate ourselves through innovation.
10. But many of our local food manufacturing SMEs face difficulties like partnerships, scale or resource constraints, they could not develop new capabilities or lack the knowledge to do so. Many of them, when they apply for the LED scheme, or when they approach us saying they are interested to be more lean, and to include automation, their biggest hurdle is not knowing what to do or where to start. Having run their local companies for so many years, they become stuck in a box, knowledge-wise.
11. To be able to grow out of the box, either they go overseas and get new experience, adopt some new things that they see or they don’t do anything at all, just being happy to generate the revenues and profits and live day by day as it is.
12. We think many of the companies had good times for the last decade, in Singapore the GPP and economic growth rate was 5-8% for a while and subsequently it became 3-5%, and then 2-3%, and now we are forecasting to 1-2%. With this kind of reduction or slowing of growth, companies just have to step up. If you don’t step up, you will need to scale down. I don’t think that any business person or corporate executives want to scale down their operations. Either you go overseas to a new market or internally, you do a redesign and reengineer the processes to maintain and strengthen your company. So we hope that they can learn new capabilities and adopt technological advancements. The current process and technology, for example, used in product testing and development are mostly outdated and inefficient as firms lack access to some of these technology and knowledge.
    
    MNCs can help local SMEs to transform and grow
    
    
13. Motivated by the LED movement, Agilent Technologies is going to play a part in helping our local SMEs uplift their capabilities for business growth and provide better jobs for our local workforce.
14. Many SMEs lack the resources and economies of scale to do that, or purchase high end equipment to access these cutting edge technologies for their business growth and expansion.
15. Workforce Singapore brought Agilent Technologies, Singapore Polytechnic and a group of food manufacturing SMEs together in a joint product innovation, development and testing initiative. We need more of this kind of cluster approach. For a single company, it is sometimes difficult, so it is good that we can combine into clusters - the impact is greater and economies of scale are achieved. By a single unit itself, your volume is usually smaller and lower. When your volume is lower, there is less that you can do and sometimes there is less technology or process changes that you can make. So it is good to come together.
16. With the food manufacturing sector taking the lead in adopting this initiative, there are plans for more sectors such as Biomedical Sciences, Chemicals, Oil & Gases and Environmental Technology to come on-board the LED Scheme in the near future.
    
    LED Scheme – helping SMEs make the quantum leap
    
    
17. This collaboration between the three parties, Workforce Singapore, Singapore Polytechnic and Agilent Technologies will increase the productivity of employers in the food manufacturing industry.
18. Agilent will be placing cutting edge instruments in Singapore Polytechnic to allow companies to have access to the latest equipment in product testing and development at a nominal fee. This facility is expected to benefit more SME food manufacturers in the future.
19. Singapore Polytechnic will then develop technical notes from the various product testing and developments, and share those relevant information with the industry through symposiums, masterclasses and workshops supported by Workforce Singapore through the Industry Catalyst Programme (ICP). Local employees will be trained to use the new high tech equipment, which will in turn increase the value of their work performed, and contribute to the creation of higher value jobs for Singaporeans.
20. Companies will then become faster, better and be more productive in product testing and development.
21. I am pleased to note that six food manufacturing companies have embarked on the lean transformation journey with projects on tea testing and development using the Gas Chromatography Mass Spectrometer (or GCMS in short) which is one of the equipment to be placed in Singapore Polytechnic. 
22. Through the GCMS, tea testing and development, which normally requires a minimum of 24 hours and two experienced technologists, will now be shortened to just four hours. Results will be obtained with greater accuracy and require only one technologist, who can also double up as the product developer.  
23. These six companies, can potentially achieve manpower savings of up to 85% and productivity increase by up to six times. Let me congratulate these companies for taking the first step. It’s very encouraging, and I hope that more companies come forward to do this, not just in testing equipment but several other processes, from front-end to back-end and back room operations. If we can do that using technology, we can really help even reprocess and redesign some of the back room operations and centralising them will also help.
     
    Conclusion
    
    
24. This collaboration is indeed an excellent demonstration of how MNCs can help our SMEs achieve a self-sufficient enterprise ecosystem. It is also a prime example of an industry-led initiative under the LED Scheme with the vision of helping progressive SMEs transform to become more manpower-lean, develop a stronger Singaporean core, and build a better quality workforce.
25. With that, I wish all the companies the very best in their lean transformation journey and to support our LED scheme. Thank you.