Speech by Mr Teo Ser Luck, Minister of State for Trade and Industry, at the 4th ST Kinetics Productivity Day on 1 October 2013, 8.50am, at ST Kinetics, 249 Jalan Boon Lay
Mr Sew Chee Jhuen, President, ST Kinetics
Distinguished Guests,
Ladies and Gentlemen,
Good morning.
Thank you for inviting me to celebrate the fourth STK Productivity Day. The ST Engineering group has a long legacy and is a key industry player in Singapore. STK in particular is well known locally and internationally for its work in defence hardware like ammunition, small arms, tanks and specialised vehicles. I would like to take the opportunity to congratulate you on your recent partnership with Australian Munitions to develop, manufacture and market your 40mm airburst ammunition. Such international partnerships are important for a company’s growth.
The defence sector has historically placed a high premium on innovation and productivity as the situations which could arise usually call for unique solutions with effective use of limited resources. Innovations which we take for granted today, such as synthetic rubber, canned food and the off-road Jeep all came out of defence needs. Equipment also needs to be delivered with high quality and low variance in order to work properly in tough conditions.
I am happy that STK has specially set aside a day each year to encourage productivity and continuous improvement among its employees and suppliers. Singapore faces an imperative to ensure that our economic growth is driven by innovation and productivity, as our land and manpower challenges are expected to become more pronounced over the coming decades. While we have been making progress in helping our companies transform, we still have some way to go.
Partnerships with SMEs to improve productivity
Productivity expertise tends to be concentrated in large companies like STK due to the scale of their operations. However, if we want the whole Singapore economy to move towards productivity growth, then our SMEs also need to upgrade their capabilities and expertise as they form more than 99% of our enterprises, employ about 70% of our workforce and contribute over 50% of our GDP.
STK has had much success and experience with improving processes, reducing waste and cutting down re-work. Our SMEs have much to learn from companies like yours. I am therefore glad to note that STK currently works with more than 2,000 SME suppliers in welding, fabrication, electronics, machining and sub-assembly of defence systems. STK is an excellent example of a large organisation which works closely with its partners and provided the impetus for them to commit to productivity improvements.
In order to encourage and facilitate more win-win partnerships between global companies and their suppliers, what STK has done is a good role model and example for us to follow. At this year’s Budget, we have set aside budget to ensure and enable collaborative industry projects, where large organisations help the smaller companies upgrade their productivity.
SPRING Singapore administers that assistance to help facilitate the whole process of collaboration. These projects will help SMEs build a better track record and have access to more business opportunities. SMEs can also gain from valuable, real-time feedback and guidance from their existing customers.
Since April this year, SPRING has supported 20 collaboration projects between large organisations and SMEs, with another 12 project applications in the pipeline. Through these projects, 127 SMEs are expected to benefit by having their capabilities upgraded or getting opportunities to develop innovative products and solutions.
I am glad to know that STK is one of the participants in this programme. I understand that you are working closely with 11 key SME suppliers in upgrading their capabilities, including providing training to the suppliers in the Kaizen methodology, which concentrates on processes for increased quality, productivity and cost savings. The project also involves providing training and mentoring sessions which would lead to technology, automation and mechanisation upgrading amongst the SMEs.
Tex-Star is one of the SMEs that is benefiting from the partnership with STK. In the past, they had relied on a manual process of welding. However, they have now mechanised their welding process. The quality of their welds has increased, and a shorter time is taken to weld the parts, resulting in a productivity increase of 27%. STK also provided expertise on value-stream mapping to the company in order to streamline their processes. They will be sharing more detail about their project after this and I’m sure that you will be enlightened.
Conclusion
In conclusion, I would like to commend STK for your commitment to productivity and your hard work in supplier development. You have committed time and effort to grow your local SME partners and this has resulted in mutually beneficial partnerships for multiple parties. I look forward to your continued support for local SMEs and your contribution towards the economy’s productivity drive.
I wish everyone a productive day ahead. Thank you.