Mr Lee Yi Shyan at the Han’s Group of Companies’ Customer-Centric Initiative (CCI) Learning Journey, 26 Feb 2010

Speech by Mr Lee Yi Shyan, Minister of State for Trade & Industry and Manpower at the Han’s Group of Companies’ Customer-Centric Initiative (CCI) Learning Journey on 26 February 2010 (Friday) at 5:15pm

Mr Han Choon Fook

Managing Director, Han’s Group of Companies

Ladies and Gentlemen,

Good afternoon,

I am delighted to join you at this afternoon’s Customer-Centric Initiative otherwise known as CCI, Learning Journey hosted by the Han’s Group of Companies.

Move to Spur Productivity-Driven Growth

The recently announced Budget contained a number of initiatives aimed at restructuring our economy so that we can raise our productivity. This shift to productivity-driven growth will require companies to compete by improving productivity, investing in their people, and creating higher values in their products and services.

Enhancing Capabilities through the Customer-Centric Initiative (CCI)

In this regard, the Customer-Centric Initiative (CCI) has been helping companies improve their capabilities in terms of meeting customer expectations. Since its launch in 2005 for the retail sector, CCI now covers the food and beverage (F&B), land transport, healthcare and hospitality sectors. Our CCI target is to help 30% of establishments within these sectors to embark on CCI and 50% of the workforce from these participating organizations to go for CCI training. I am pleased to announce that we have already exceeded our targets. There are now more than 5,600 establishments (36%), employing over 153,000 workers (56%) from these five sectors that have embarked on the CCI. In line with the Economic Strategies Committee’s recommendations, we will be extending the coverage of CCI to more companies and more sectors.

We will also enhance CCI in three areas. Firstly, we will broaden the scope of CCI from customer service to customer satisfaction. This enhancement will help companies customize their offerings to meet or exceed customer expectations. Secondly, CCI will help companies redesign their business processes, develop service strategies and conduct service audits. This will instill a customer-focused service culture among staff, and benchmark themselves against best practices.

Thirdly, CCI will also encourage companies to send their staff for training to acquire in-depth knowledge of products and services. To date, over 12,800 workers have been trained in the Service Excellence Workforce Skills Qualification (SE WSQ) and close to 12,000 workers are Certified Service Professionals (CSP).As the next step, it makes sense for companies to link productivity with staff compensation.

Han’s CCI Journey

A good example of a company that has benefited from CCI is Han’s. In 2006, about half of its outlets were in the red. The company embarked on CCI in 2007. I am glad to note that two years after embarking on the programme, a good number of its outlets are making good profits.

What sparked this change was Han’s decision to focus its attention on its people and processes. It started by instilling a customer-oriented mindset among its staff and sent them for training to help them better serve their customers. As a result, Han’s compliment-to-complaint ratio improved from 1:10 in 2006 to 1:1.5 in 2009. Staff productivity has also improved. With the staff being better equipped to take on multiple roles, each outlet now requires 3 less staff than before.

Han’s also leveraged on technology to improve its processes and service delivery. The company simplified its Point of Sales (POS) system and taught its older workers how to use the modified system. This has enabled Han’s older workers to take on higher value jobs in frontline. In addition, Han’s introduced an Enterprise Resource Planning (ERP) system to integrate information across its outlets for better cost and inventory control. It also deployed automation machines in the central kitchen to increase output while ensuring consistency in product quality across its 24 outlets.

In parallel, the Restaurant Association of Singapore (RAS) has been actively promoting the adoption of the 5S philosophy among its members. Han’s is one of the 5S adopters. The 5S Workplace Management framework focuses on organizing and managing workspace and workflow in the safest and most efficient manner. Under the Local Enterprise and Association Development (LEAD) programme, RAS has trained 40 assessors to conduct audits for companies which are implementing 5S to help them improve their processes. Putting 5S into practice, Han’s achieved faster ordering and shorter serving time, even during peak hours. The average time taken from the moment a customer walks into a Han’s outlet to the time he gets his food, is now under 10 minutes as compared to 40 minutes before.

The above results speak for themselves. Sales increased by 60% and net profit by close to 4 times from 2006 to 2009, while headcount growth was kept at 14%. The return on investment almost doubled and income per employee increased by nearly 30%. In addition, Han’s more productive workforce and more efficient workflow generated a cost savings of $1.5 million last year.

Conclusion

Han’s is a great role model for SMEs that constantly seek to build up its capabilities and upgrade the skills of its workers. I would like to extend my heartiest congratulations to Han’s foresight and progressive attitude in upgrading and training. I would like to urge other business owners from the service sector to join Han’s and other successful CCI companies on improving your businesses capabilities and productivity. And in so doing, exceeding the expectations of your customers and be rewarded.

Happy New Year to all. Thank you.