21 March 2007 - Keynote Address By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At the The Think Solutions Series: Real Time Supply Chain Management III “Advances In Logistics ICT”, Fort Canning Park.
Keynote Address By Mr Chan Yeng Kit, Chief Executive Officer, Infocomm Development Authority of Singapore At the The Think Solutions Series: Real Time Supply Chain Management III “Advances In Logistics ICT” on 21 March 2007, Fort Canning Park.
Dr Robert De Souza, Executive Director, The Logistics Institute – Asia Pacific,
Ladies and Gentlemen,
1. I am happy to be here this morning at the seminar “Advances in Logistics ICT”. Logistics has always played a vital role in Singapore’s economy. It is critical to us both as an industry and an enabler. The logistics industry accounts for nearly 10% of our GDP. As an enabler, it gives industries operating out of Singapore a significant competitive advantage and helps to make Singapore an attractive location for manufacturing operations.
2. Infocomm technology has played a key role in differentiating Singapore as a logistics hub. Over the past 2 decades, we have developed sophisticated supply chain management systems, such as TradeNet to streamline information flows between logistics players and the Government.Last year, Singapore's ports handled a record 24.8 million TEUs1 (Twenty-foot Equivalent Units) of containerised cargo, making it the world’s busiest port. The deployment of infocomm systems and applications has contributed significantly to this achievement.
3. Recognising the relevance of enabling supply chain management, IDA launched 3 programmes in 2003 and 2004. These are the Collaborative Hi-Tech Manufacturing Plan, the RFID Initiative and the Retail Electronic Supply Chain Management Ecosystem Programme. Over these three years, companies have benefited from these programmes.Let me share more details with you.
Collaborative Hi-Tech Manufacturing Pl an (CHTMP)
4. The Collaborative Hi-Tech Manufacturing Plan (CHTMP) aimed to build 10 end-to-end, integrated and responsive supply chains in the high-tech industry. A key enabler in building these collaborative supply chains is the use of RosettaNet standards for integration of key business processes between manufacturing companies and their trading partners.
5. Since the launch of the programme, IDA and the local industry have invested more than S$14 million in project activities.Through the CHTMP, 10 major manufacturers have connected to over 40 local suppliers, and several hundred regional suppliers. Each end-to-end supply chain comprises of 5 main areas: design, procurement, manufacturing, logistics and payments.On average, companies and their first-tier suppliers have achieved business-to-business connections in 70% of these areas, enabling nearly S$3.2 billion worth of annual transactions.They have enjoyed S$41 million in cost savings, and have achieved an average of 30-50% productivity improvement in key process areas.
6. Let me share specific examples with you.Infineon, a semiconductor MNC, and its supply chain partners enjoyed a combined annual cost savings of more than S$300,000 from its RosettaNet pilot in the CHTMP. These savings were mainly attributable to increased productivity.
7. The benefits are not confined to large companies. Unisteel, a mid-sized company, also benefited from RosettaNet implementation. Unisteel has reduced the time taken to reconcile 1,000-line invoices from a few hours to a matter of minutes. This reduction in tedious activity has allowed staff to be redeployed for higher value work.Manual errors were significantly reduced.
8. For local SME suppliers, integrating electronically with key global manufacturers would help to grow their businesses with existing customers or to attract new clients.This is because large clients prefer direct linkages with suppliers to improve overall supply chain efficiency.One suitable low-cost technology is RosettaNet Automated Enablement (RAE), which allows SMEs to integrate to their partners for transactions using just email and Adobe PDF. This system only requires a one time investment of up to S$2,000.
9. Moving forward, IDA will continue to work with the industry to increase the adoption rate of RosettaNet among companies.We want to spur companies who have already piloted RosettaNet to go into full implementation with more of their supply chain partners, and also to increase the range of their B2B processes that can be automated.
Radio Frequency Identification Initiative
10. Apart from the CHTMP, companies requiring logistics-intensive support have also benefited from IDA’s RFID initiative2. Sembawang Kimtrans has tagged its prime movers and trailers with RFID and GPRS, enabling it to better track its assets and increasing utilisation level. This has helped the company increase its revenues from S$2.4 million in 2004 to S$4 million in 2005. Keppel Logistics also benefited from the use of RFID by enabling the real-time tracking of goods through a warehouse RFID implementation, resulting in a decrease of operational costs by 25% and improved productivity by 10%.
11. IDA’s RFID Initiative has catalysed the development and implementation of RFID in Singapore among early adopters.However, there is a need to increase usage among businesses in Singapore to achieve economic benefits and growth.Hence, the National RFID centre was set up in 2006 to act as the focal point to continue to drive the development and adoption of RFID with more industries in Singapore.
Retail Electronic Supply Chain Management Ecosystem
12. Another key beneficiary of the programmes was the retail sector. Efforts in Retail Electronic Supply Chain Management Ecosystem (Retail eSCM) such as Collaborative Planning, Forecasting and Replenishment (CPFR) have helped retail supply chain partners better forecast and share business information with one another to enable automatic product replenishment.
13. Benefits can be seen from a few examples.NTUC FairPrice was able to save more than S$250,000 per year from productivity improvements, and Sheng Siong was able to substantially cut down its operational cost by 20% through the automation of their inventory and stock-ordering processes.
14. The examples that I have shared are projects undertaken by companies in Singapore under these three programmes. IDA has compiled a set of case studies to share with the industry on companies’ experiences and learning points.
15. IDA will continue to leverage on infocomm to help the trade and logistics community through the development of TradeXchange.To be launched in October this year, TradeXchange is an integrated platform that facilitates all B2B and B2G trade processes. Together with the Singapore Customs and EDB, IDA launched a Call for Collaboration (CFC) in 2006 to invite the industry to develop B2B Value Added Services (VAS) on TradeXchange.
16. I am pleased to announce that six proposals have been awarded under the CFC to AEB Asia Pacific, CrimsonLogic eTrade Services, Cyberlog Technologies, Gridnode, Kewill-IPACS e-Solutions and Y3 Technologies. Through the CFC, IDA, EDB and these companies will be investing more than S$4m to build these B2B services.
17. A greater number of trade and logistics players such as shippers, logistics service providers, 3rd party logistics providers (3PLs), freight forwarders, carriers and financial institutions will be able to use TradeXchange beyond filing of trade permits and declarations.The suite of B2B services will allow the trade and logistics community to file customs declarations and manifest submissions with other countries.It also allows companies to check schedules and bookings of cargo space electronically with shipping lines, to enjoy more secure access and transfer of titles electronically, as well as to purchase cargo insurance online.
18. We welcome the industry to come forward and develop more VAS on TradeXchange.Through this platform, VAS providers can reach out more effectively to the trade and logistics community.
Developing Singapore as a Supply Chain Nerve Centre
19. Moving forward, IDA aims to further leverage on infocomm in developing Singapore as a Supply Chain Nerve Centre, a key recommendation of the Manufacturing & Logistics Sub-committee under IDA’s iN2015 masterplan. Increasingly, companies will manage global supply chains from Singapore, and will require support from a world-class logistics infrastructure.Our air-and seaport operators are already among the world’s best and tap on infocomm extensively to improve their productivity and service quality. Infocomm will continue to be a critical enabler not only for advanced usage to sustain our ports’ competitive edge, but also to improve the efficiency, security and connectivity of players in the air- and seaport communities.To that end, IDA is working with other government agencies and industry players.
20. Singapore-based manufacturers and logistics service providers have come a long way in the use of infocomm. However, competition is intensifying and we need to find more innovative ways to leverage on infocomm to strengthen Singapore’s competitive advantage in manufacturing and logistics.IDA will continue to work with the industry to identify impactful sectoral projects for Singapore to become a Supply Chain Nerve Centre under the iN2015 masterplan.
21. On this note, I would like to wish all participants a fruitful and rewarding seminar ahead. Thank you.
1 Maritime and Port Authority of Singapore (MPA)
2 IDA's S$10m RFID Initiative was launched in May 2004, resulting in S$30m investment by 27 companies.