​Speech by Mr S Iswaran, Minister for Trade & Industry (Industry), at the 21st Business Excellence Awards on Wednesday, 14 October 2015, 7pm, at Raffles City Convention Centre Ballroom

 

Professor Cham Tao Soon, Chairman, Singapore Quality Award Governing Council,

Distinguished Guests,

Ladies and Gentlemen

 

Introduction

Good evening.  I am pleased to join you at the 21st Business Excellence Awards Ceremony.

Excellence is a Habit

2.            This evening, we recognise organisations that have achieved outstanding levels of business excellence.  We are celebrating not just the accomplishments of the award recipients, but also the contributions of the many who have contributed to their success, and the culture of excellence they have fostered in their organisations.  And that is fitting because business excellence is not the responsibility of any one individual or department; it requires all parts of an organisation to work closely together as a team to the best of their ability.  It entails consistent and dedicated effort over a long period of time.  As the Greek philosopher Aristotle observed “We are what we repeatedly do.  Excellence, then, is not an act but a habit.”

3.            While the goal is the same, there are many pathways to achieve it and there can be many winners.  Hence, tonight we recognise several organisations that have overcome obstacles and challenges in achieving Business Excellence in their respective domains.  We will hear more about their journeys to business excellence later this evening.

Building Resilience amid a Volatile Global Economy

4.            Resilience through business excellence takes on added significance against the backdrop of an uncertain global economic environment, and intensifying global and regional competition.  Top-line growth is likely to remain subdued in the next few years, with export-oriented sectors being the hardest hit due to sluggish global demand.

5.            Based on advance estimates released this morning, the Singapore economy averted a technical recession in the third quarter.  On a quarter-on-quarter annualised basis, the economy expanded by 0.1 per cent, following the contraction of 2.5 per cent in the second quarter.  On a year-on-year basis, GDP grew by 1.4 per cent in 3Q15, compared to the 2.0 per cent growth in the previous quarter.  

6.            The slowdown in the Singapore economy has occurred against a backdrop of weak global demand and heightened uncertainties.  In its World Economic Outlook publication released two weeks ago, the International Monetary Fund lowered the global GDP growth forecast for 2015 to 3.1 per cent, the second time this year that the growth forecast has been lowered.  If this materialises, it will be the slowest pace of global growth since the global financial crisis.

7.            For the rest of 2015 and going into 2016, the global economy continues to be clouded with downside risks.  The Chinese economy is slowing and there are worries that the slowdown will be sharper than expected.  Some of these worries and uncertainties are manifested in the form of volatility in the Chinese stock market, which has also affected regional bourses.  Another key concern is whether regional countries will be able to cope with the sudden, large capital outflows that could occur amidst continued low commodity prices, stock market volatility and the anticipated normalisation of US monetary conditions.  Such capital outflows could put pressure on the countries’ currencies and asset markets, with repercussions on their real economy.

8.            As a small, open economy, Singapore will be affected by how global economic conditions pan out.  If the global downside risks materialise, there will be a knock-on impact on Singapore, and our growth could be adversely affected.

9.            Given the global outlook, sentiments among Singapore enterprises have generally been weak, and many are exploring ways to cut costs and improve productivity to preserve margins.  Businesses also need to stay agile to seize new opportunities as they arise.  The government will continue to support our local enterprises in improving productivity, as well as tapping on innovation and international expansion to drive top-line growth.

10.         In Year of Assessment (YA) 2014, 54,000 companies benefitted from the Productivity and Innovation Credit (PIC), which has enabled them to adopt technology, change business processes, and upgrade.  In addition, more than 1,000 companies benefitted from SPRING’s Capability Development Grant (CDG) in 2014, which has enabled them to enhance business capabilities across 10 developmental areas ranging from technology innovation to intellectual property and franchising.  More than 400 companies also benefited from IE Singapore’s Global Company Partnership in 2014, which provides assistance for internationalisation in the areas of building internal capabilities, manpower development, gaining market access and gaining access to financing.

11.         More recently, we have launched SkillsFuture as a national initiative to help our workforce develop deep skills, and support workers in continuous learning and upgrading over their entire careers.  For enterprises, this effort will help to fill existing skills gaps and enable access to better skilled manpower to support their growth.  Businesses should make full use of SkillsFuture initiatives and take ownership of the development of their workers – by proactively developing every worker, providing career pathways, and valuing workers’ contributions based on skills and workplace competencies.  SMEs in particular can tap on SPRING’s grants to upgrade their HR capabilities to be able to implement SkillsFuture initiatives.  SPRING will also be launching a SkillsFuture Mentors initiative at the end of this year that gives SMEs access to advice to improve their HR capabilities, in order to participate in SkillsFuture initiatives such as the Earn and Learn Programme.

Business Excellence – Enhancing Competitiveness, Delivering Results

12.         Business Excellence (BE) is an equally important ingredient for the success of our enterprises.  The BE framework provides organisations with a developmental roadmap by articulating the relationships between leadership, customers, strategy, people, processes and knowledge, and how they translate into results.  Since 1994, more than 1,500 organisations have undergone BE certification, covering certificate levels of excellence through the Singapore Quality Class (SQC), to award levels of excellence through the Singapore Quality Award (SQA).

13.         The BE initiative has been beneficial for organisations.  An impact study conducted by NUS last year[1] showed that SQA- and SQC-certified enterprises collectively performed significantly better than their peers.  From 2008 to 2012, the profit of these organisations grew at an average of 14% per annum, double that of their peers.  In particular, those that had been on the BE journey for five to ten years did even better, achieving 7.5% per annum revenue growth compared to an industry average of 5%, and a remarkable 25.5% per annum profit growth against an industry average of 6%. Given the superior performance of our BE-certified enterprises, I urge more enterprises to similarly embark on this journey of excellence.

Building Excellence in Industries

14.         Beyond our work at enterprise level, we also need to instil a mindset of excellence in our industries and help build a culture of innovation.  I am happy to announce that SPRING has forged two new partnerships with the manufacturing and built environment industries.  These industries face increasing challenges from economic restructuring and heightened global competition, and therefore have an urgent need to improve productivity, innovate and transform.

Operational Excellence within the Manufacturing Industry

15.         In manufacturing, Operational Excellence has been identified by many industry players and large enterprises as a key driver for overall business growth.  In today’s business environment, manufacturers are expected to manage the entire supply chain, by first understanding customer needs, managing the procurement and production process, and finally delivering the finished products to customers.  These are qualities that will differentiate the better enterprises and make them preferred partners for business collaborations with global MNCs.

16.         To help build Operational Excellence capabilities in our 2,600 precision engineering SMEs, SPRING has developed a pilot diagnostic toolkit, which provides a developmental roadmap for precision engineering SMEs to enhance their competencies and capabilities.  Endorsed by our key industry partner, the Singapore Precision Engineering and Technology Association (SPETA), this toolkit embeds the fundamentals of business excellence and incorporates the stringent requirements that MNCs and large organisations impose on their suppliers.  Following the pilot, the toolkit will be expanded to the rest of the manufacturing industry.

17.         In addition, SPRING has established a network of industry experts to guide SMEs in diagnosing bottlenecks and strengthening capabilities in Operational Excellence.  This initiative will help precision engineering SMEs to achieve excellence, improve their competitiveness, and grow their businesses over the long-term.

18.         RUI is one such precision engineering company that has benefitted from these initiatives.  Following a diagnostic exercise, RUI has taken the first step in closing operational gaps by embarking on developmental projects in two areas, firstly to implement a 5S system for its manufacturing processes, and secondly to conduct data analysis of its business processes to improve productivity.  Mr Kelvin Lee, its Director, observed that these initiatives have helped RUI to enhance its competitiveness and forge closer collaborations with its customers.  Staff morale has also improved due to expansion of roles and clarification of processes. 

Integrated BE-ISO9001 Assessment

19.         Another industry that will benefit significantly from Business Excellence initiatives is the Built Environment industry, which covers construction, architecture and building management.  Both the Building and Construction Authority (BCA) and industry players alike have placed strong emphasis on quality management practices to ensure productivity and sustainability, and to meet health, safety and environmental standards.  The adoption of standards such as ISO 9001 for quality management systems is a requirement by BCA for companies to be registered in the higher tiers of the Contractors Registration System in order to participate in the larger procurement exercises conducted by government departments, statutory bodies and other public sector organisations.

20.         To further boost the growth and competitiveness of our enterprises in the Built Environment industry, BCA and SPRING are embarking on a joint initiative to provide an integrated assessment in both Business Excellence and ISO 9001 standards.  This will enable enterprises to take a holistic approach towards building capabilities and developing sustainable long-term business plans. 

21.         Tiong Seng Contractors (Pte) Ltd is an example of a company that has benefitted from being both ISO- and BE-certified.  The construction company won BCA’s Built Environment Leadership Award (Platinum) in 2011 and the Singapore Quality Award in 2013.  Tiong Seng’s proactive approach in addressing both regulatory and non-regulatory requirements through the adoption of international standards, as well as being BE-certified, has earned the company a reputation as a reliable, green and efficient builder, as well as one that is visionary, innovative and strong in management practices.

Conclusion

22.         In closing, I would like to commend our industry partners for working closely with us to instil a culture of excellence in our industries, in support of our effort to transform the economy and be future-ready. 

23.         Our award winners tonight exemplify the very qualities we wish to see in all enterprises.  A commitment to grooming people – our most precious resource; the continuous pursuit of innovation, productivity and excellence; and forward-thinking leadership that is able to navigate future challenges.

24.         My warmest congratulations to our Business Excellence award winners. You have excelled in creating value for your stakeholders and customers.  I trust that your stories will inspire others by exemplifying the heights attainable with a resolute commitment to the business excellence journey.

25.         On that note, I wish everyone a pleasant evening ahead.  Thank you.