Raising the productivity sales pitch, on the ground

FROM dishwashing facilities to supermarket chains, Deputy Prime Minister Tharman Shanmugaratnam's recent site visits have underscored the government's stance on restructuring: No sector, company, or task is too small to apply innovative techniques and raise productivity.

Together with other ministers overseeing the economy, Mr Tharman - who is Coordinating Minister for Economic and Social Policies and chairman of the National Productivity Council - has been reaching out to a myriad of businesses on the ground, stressing the need for greater efficiency and a more manpower-lean workforce.

This is particularly in the domestic services sector, where productivity growth has been disappointing.

In doing so, Mr Tharman and his team of ministers - Heng Swee Keat for finance, and Lim Hng Kiang and S Iswaran for trade and industry respectively - have emphasised that innovation should not only be centred on a few individuals, companies, sectors, or technologies; it must involve all firms including smaller ones, and those in traditional trades.

Innovation is also now being seen in every sense - and not just through technological advancements - such as developing new brands, detecting new tastes in a new generation of customers, and breaking into markets abroad.

Said Mr Tharman recently: "We must focus more on real innovations, not just simple solutions such as purchases of basic IT devices. For the government's part, we will step up support for innovation, through targeted help for companies, rather than focusing on broad-based support for basic solutions."

This means a renewed focus on spotlighting productivity enhancements that result in tangible improvements - no matter how small or seemingly mundane, and whether through technology, workflow enhancements, or shared resources.

Take, for example, the task of dishwashing. Just this Monday, Mr Tharman visited Singapore's first on-site centralised dishwashing facility at IMM Building. Spanning over 7,000 sq ft of warehousing space, its seven automated dishwashing lines boast the capacity to consolidate dishwashing for 70 to 100 food & beverage outlets, resulting in substantial productivity and manpower savings of 50-80 per cent in manhours.

In the weeks before that, Mr Tharman also commended supermarket chain Cold Storage and 22 local Indian restaurants for adopting efficiency-boosting practices. For the former, he noted that the integrated storefront and back-end cash management system at Cold Storage's Dunearn Road outlet has saved costs and manpower. The latter were applauded for investing in central processing units, which allow the restaurants to aggregate demand, purchase in bulk, and therefore reap economies of scale.

Minister for Finance Heng Swee Keat, too, has been stressing the need to stay competitive at just about every event he has graced - especially given his new role as chairman of the Committee on the Future Economy, formed to ensure that Singapore remains competitive.

At the Semi-Centennial Leadership Conference organised by the Singapore Business Federation, Mr Heng said Singapore cannot simply produce what the world is producing, and expect to command a premium or sustain its competitive edge.

"We have to produce what the rest of the world is not producing, or at least, not much of. To do so, we have to build deep capabilities and linkages, in our companies, in our industries and in our economy, to create new products and deliver better solutions, in cost-effective, innovative ways," stressed Mr Heng.

This is in contrast to a value-adding economy, which proposes improvements to add incremental value to the products, services, or ideas that already exist.

But even as the government asks local companies to be ambitious when it comes to innovation, it is also showing its own willingness to laud even the tiniest of micro-enterprises for their improvements in productivity.

Indeed, at the recent Singapore Heartland Enterprise Star Award gala dinner - an event Mr Tharman called the "most meaningful" of all business awards - the Deputy Prime Minister lauded homegrown herbal hair treatment firm, Bee Choo Origin, for being a so-called "old economy" business that has gone global. In particular, Mr Tharman praised Bee Choo Origin for tapping on SPRING's Capability Development Grant for a project that led to a significant reduction in customers' waiting time.

Said Mr Tharman: "We will spare no efforts to support innovation by SMEs (small- and medium-sized enterprises). We will continue to review our schemes to ensure that they are easily accessed by such businesses, no matter how small. But we will also want to make sure that our schemes are not for those seeking to take advantage of government support without really upgrading business methods."

This constant refinement of the restructuring drive - both in terms of its policy and sales pitch - is surely a welcome move. Where will the ministers turn up next?