Speech by Mr Lee Yi Shyan, Senior Minister of State for Trade & Industry and National Development at the Restaurant Association Of Singapore (RAS) Epicurean Star Award 2012 at Raffles City Convention, on Tuesday, 21 August 2012, at 8pm
Mr. Andrew Tjioe
President, Restaurant Association of Singapore
Distinguished Guests,
Ladies and Gentlemen,
Good Evening.
I am delighted to join you here this evening for the RAS Epicurean Star Award 2012. I understand that this year’s winners will represent Singapore in the World Championship of Chinese Cuisine (WCCC) to be held in Singapore in November. I’d like to offer my advanced congratulations to all winners and wish you great success on your journey to excellence.
Adaption is key to continued success
As we celebrate the achievements of today, we should also seed the success for tomorrow. Given the uncertainties in our macro environment – a deleveraging Europe, a fragile US economy and still anaemic Japan, we will need to ensure that we are prepared for the worse. Domestically, business sentiment is subdued by rising costs and shortage of worker supply. Overall, we forecast moderate growth of between 1.5 to 2.5 per cent for 2012.
To be sure, where we are in Singapore, situated in the growth regions of the Asia Pacific, there are silver linings in the horizon. Demographics in the key markets of China, ASEAN and India favour travel and rising consumption. Increasing size of the middle class in these markets could translate into strong demands for goods and services, including our F&B offerings, and travel-related services.
In other words, our industry’s continued success will depend on how well we adapt to the changing demands, business environment and international landscape. Not only do we need to improve, we must do so faster than our competition does. And competition is also local and regional. The driver for improvement, business model innovation and profitable growth must come from our businesses themselves. However, the government stands ready to give our businesses a lift, so that their success would mean benefits for all in the economy, including creating well paying-jobs for Singaporeans.
Ways to Sustainable Business Growth
To help our F&B companies, the government has introduced a series of programs that aim to help SMEs build sustainable competitiveness through capability building. For instance, SPRING Singapore launched a $75 million Food Services Productivity Plan1 in 2011. SPRING and IDA have also stepped up efforts to help SMEs through SME-PRO2 and iSPRINT3. Many SMEs have made used of these programs. The media has also given them much publicity. But we still need the others to come on board so that the pace of our industry’s productivity improvement can be quickened and scope broadened.
Let me give you a few examples of F&B companies embracing productivity and making use of these programs.
To reduce the reliance on labour, Gayatri Restaurant and Timbre have redesigned their operations and adopted technologies, such as wireless ordering for customers. In the back of the house, some restaurants installed automated rice dispenser, electronic noodle boiler or combi ovens to speed up food preparation and standardise quality. In addition, restaurant groups like Pu Tien and Paradise Group have also set up central kitchen to greatly streamline labour-intensive manual food preparation processes.
Process re-engineering which is common in the manufacturing sector, is becoming a must-have, productivity discipline in the F&B industry. This is why some F&B companies have begun to re-engineer their menu. In most cases, they found that a simpler menu downstream would simplify many preparatory steps upstream, from ordering, serving, cooking, to raw material purchases and stocking. With less steps and complexity, F&B operators find it easier to focus on consistency and quality. They do few dishes but better dishes.
With tighter foreign workers policy, I understand the pain that many SMEs, especially companies in the F&B sector are now going through. But to argue for free and unlimited flow of foreign worker supply is also not tenable, especially if we don’t give time for our infrastructure to catch up, and where our industry productivity is 1/3 or more behind those of benchmarked countries. We have to catch up in terms of labour productivity in the F&B sector. We need to think of smarter ways of doing businesses.
According to a study by the Boston Consulting Group (BCG)’s in 2011, in countries where food services productivity is higher such as the UK and the US, their restaurants’ workforce typically comprised more than 50 per cent of part-timers. Despite our differences, I think we need to examine this option, to see if we can accomplish the same to solve the peak demand pattern for the F&B industry. SPRING launched a part-time pool programme last year to develop a pool of trained part-timers. In addition, companies could consider proven practices such as flexible work scheduling, to match workers demand to business peaks.
Last week, I was at an event4 hosted by a local enterprise that had adopted the tagline, “happy staff, happy people lead to happy customers”. Although this was not a food services company, the principle of happy staff produces happy customers would apply to our F&B industry. By investing in training our staff, and devise profit sharing plans with them, F&B companies can increase the sense of ownership and the spirit of teamwork amongst the staff.
To achieve productivity breakthroughs, companies sometimes also need to think out of the box. Lately, we are seeing more F&B outlets differentiating themselves with greater niches. Forty Hands Cafe for instance, offers coffee made from certified “Fair Trade” beans5. Jones the Grocer – a one-stop food emporium, combines a café with a retail offering of gourmet food products.
Besides new concepts, the industry can also leverage on technologies to innovate. IT platforms such as the e-procurement portal can significantly reduce administrative overheads between F&B companies and their suppliers. An online bidding system for food suppliers will allow restaurants to source for the best supplies, hence improving its bottom line. Restaurants like sushi bars, can also adopt RFID tags to monitor how long a particular plate of sushi has been placed out on the conveyor belt to ensure freshness. There are many more examples. Clever innovation saves costs, reduce efforts and improve quality.
Conclusion
I have spoken much about the need for the F&B industry to catch up in terms of productivity. Between us and our end goal of a competitive and profitable F&B industry - remains a journey of excellence that requires your imagination, drive and commitment to complete. I therefore ask for RAS and your joint leadership to help make this journey possible. Let us work together to transform the industry.
Finally, I would like to offer my heartiest congratulations to all the winners and award recipients. Have a good evening ahead.
1The $75 million food services productivity plan was launched by SPRING in April 2011. As part of the plan, SPRING will encourage companies to innovate, streamline workflows, adopt technology and automation, upgrade manpower and HR capabilities, as well as improve service standards.
2 Defined as SME Productivity Roadmap, the SME-PRO is a systematic 3-step approach for SMEs to improve their productivity. The 3 steps are: Be Aware, Get Trained and Take Action. SME-PRO is a joint initiative by SPRING Singapore and Singapore Workforce Development Agency (WDA).
3 Defined as “Increase SME Productivity with Infocomm Adoption & Transformation), the iSPRINT scheme addresses different areas of infocomm adoption for the SMEs. The scheme makes it easy and convenient for enterprises to seek assistance to help them along their infocomm adoption journey for 1st time adopters.
4 This enterprise is CTC Travel, where SMS Lee visited on 15 Aug as part of the Customer-Centric Initiative Learning Journey.
5 ‘Fair Trade’ coffee beans are purchased directly from growers allowing them to earn a higher profit margin.