Mr Rick D. Blasgen, President and CEO, CSCMP
Distinguished guests,
Ladies and gentlemen,
A very good morning.
Introduction
1. It gives me great pleasure to join you today for the Council of Supply Chain Management Professionals Singapore Conference 2014. To all overseas delegates, a very warm welcome to Singapore.
2. The logistics industry is an important part of Singapore’s economy, contributing 8% of our GDP in 2012. More importantly, as an island nation, Singapore is heavily dependent on the smooth functioning of our supply chains to ensure the uninterrupted supply of our food, fuel and other daily necessities of life. I am therefore pleased that Singapore was selected to host this event which brings together many captains and leaders of the industry.
3. The theme of today’s conference is “Supply chain risk management”. This is a timely discussion of a topic which has become increasingly important to the industry globally. More than 90% of the companies surveyed by the World Economic Forum indicate that supply chain and transport risk management has become a greater priority in their organizations over the last five years.[1] Economic losses from supply chain disruptions increased 465% between 2009 and 2011.
Companies need to overcome supply chain challenges to tap on growth opportunities in Asia
4. Shippers have reported that the leading cause of supply chain disruptions is adverse weather, followed by extreme volatility in commodity, labour, and energy supply.[2] Other causes of disruption include social unrest, theft and pilferage. The risk of such disruptions exists globally, including here in Asia. In fact, some companies may even feel that Asia poses certain unique challenges for supply chain risk management due to the diversity of cross border trade regulations, business practices and different levels of infrastructure development.
5. However, companies that can manage these risks effectively will also be able to fully tap upon the ample business opportunities within Asia. The economies in this region are growing steadily. Asia’s middle classes are expanding. More specifically, the Southeast Asian nations or ASEAN is working towards an ASEAN Economic Community by 2015. This would bring together a market that has a combined population of half a billion people. Trade with Asia is also expected to grow further once the new trade agreements such as the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership are concluded and ratified.
Singapore is well positioned to support the supply chain risk management needs of companies looking to grow in Asia
6. Singapore has three areas of strengths that position us well to support the supply chain risk management needs of companies looking to grow in Asia.
Singapore is a reliable and secure world –class transportation hub
7. First, Singapore is a world class transportation hub that is strategically located at the cross roads of major trade lanes. We are the world’s largest container transhipment hub, handling around 20 percent of the world’s container volumes. We are also an important air travel hub. Changi Airport is among Asia's largest cargo airport, with more than 6,000 flights to 210 destinations in 60 countries every week. Together with our political stability, pro-business policies and the absence of natural calamities, many global companies, such as Texas Instruments, Boeing, Airbus, Medtronic, Philips, and Applied Materials, have chosen Singapore to serve as a highly reliable and secure hub for their critical supply chain operations.
Singapore has a strong pipeline of cross-disciplinary talents across different supply chain relevant areas
8. Second, we have built up a strong pipeline of cross disciplinary talents across wide ranging areas relevant to the logistics industry, such as finance, risk modelling, geopolitics, cyber security, analytics and supply chain management. For instance, The Logistics Institute Asia Pacific, a collaboration between the National University of Singapore and Georgia Institute of Technology, has spent the last year working closely with leading manufacturers to develop a risk measurement modelling tool. Singapore’s Nanyang Technological University is also home to the Institute of Catastrophe Risk Management, which was launched in 2010 as a multi-disciplinary research institute to study the fundamental characteristics of risks related to natural disasters and other non-traditional risks.
9. The availability of a strong local talent pool has enabled many leading companies to locate their supply chain research or risk analytics activities here. For example, Aon, a leading global provider of risk management services and insurance solutions, recently set up the Singapore Analytics and Innovation Centre. Infineon has also set up its Semiconductor Supply Chain Science Centre here in Singapore to optimise its entire supply chain, including its collaborations with suppliers in Asia.
Close working relationship between the Government and the industry to establish best practices in supply chain security.
10. Finally, the Singapore government works closely with the industry to establish best practices in supply chain security and emergency preparedness. For instance, Singapore Customs has been working with the industry to drive the adoption of its Secure Trade Partnership programme. The programme encourages companies to adopt robust security measures in their trading operations.
11. More recently, Singapore Customs has also started to put in place a network of mutual recognition agreements or MRAs. Through these agreements, Singapore Customs and its partner customs administrations would mutually recognise the security requirements and validation processes of each other’s supply chain security programmes. In the event of a major trade disruption, certified companies are likely to be less affected as their cargoes could be facilitated and cleared ahead of others when trade resumes. These companies could therefore better predict the movement of their goods, particularly for time-sensitive exports, and also enjoy savings in costs which would otherwise be incurred due to delay at the ports. As of 1 April 2013, Singapore has signed MRAs with Canada, China, Japan and South Korea and these MRAs are fully operational.
Conclusion
12. The logistics industry is one in which success depends heavily upon developing trusted relationships with the right partners – trustworthy and reliable partners who are willing to go the extra mile during a crisis can be the deciding factor on whether the supply chain continues to operate or breaks down. Singapore is thus honoured to have been chosen as a strategic location and partner by many global companies, and also to be the host of this year’s Conference.
13. We are keen to continue our close partnership with the industry, and to learn from your experiences operating across the world. I wish all of you a fruitful and enriching Conference over the next few days, and look forward to hearing the outcomes of your deliberations. I would also like to extend an invitation to those companies who have yet to select Singapore as a strategic partner to explore partnering with us. Thank you.