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A supply chain love affair

YCH Group boss Robert Yap explains how he built up his logistics empire after reluctantly taking over from his father 36 years ago.

"If you don't think you can take risks, don't be a businessman because you'll never succeed. We're not talking about taking kamikaze type of risks but those that could injure but not kill." - Robert Yap (above)

NEVER MIND that his first love is dabbling in information technology or that he considered pursuing the more glamorous banking job. All it took was a handshake with his father to seal Robert Yap's fate 36 years ago.

As reluctant as he was at the age of 27, Mr Yap became the managing director of his father's business, now known as YCH Group, in 1980.

At that time, he wanted to run the company his own way and had told his father he would only take over the reins if the senior Mr Yap retired.

"He shook my hand and said: 'Son, you have a deal', and I thought: 'Oh, my god'. So I became managing director and he became the chairman. When he retired, he was younger than me," says Mr Yap in mock horror as he recounts his disbelief then.

That life-changing conversation came about two years after Mr Yap helped the company turn a corner. He is now the executive chairman of the group and also the newly-crowned Businessman of the Year at the Singapore Business Awards 2016.


The YCH story started in 1955 with Mr Yap's father, the late Yap Chwee Hock.

The elder Mr Yap had set up Yap Chwee Hock Transport and General Contractors, a passenger transport firm that provided transportation services to employees of the Public Utilities Board (PUB) and the British army.

Back then, the company managed to own a fleet of more than 100 trucks at one point in time, earning it the privilege of being featured in the government gazette, where it was identified as one of the largest lorry transportation providers in Singapore.

Then, in 1976, it failed to renew the yearly contract with PUB and things went downhill fast.

"At that time he (dad) lost the PUB contract which was 80-90 per cent of his business and because of that, the business was very shaky and the old man runs it like family, which meant no retrenchment. He had told the staff: 'We won't retrench, next year we'll fight again'."

Mr Yap, who had helped out with the family business as chief clerk writing all the book orders and allocation of trucks from when he was 12 or 13 years old, was roped in to help overcome the company's first crisis after he graduated in 1977 at the age of 24 with a degree in Business Administration from the University of Singapore (the present-day National University of Singapore).

"I calculated the cashflow and we already had a mortgage on the house. So I said: 'If we go on like that, in seven months, we would go bankrupt'. I told my mother I'll go into the business for one or two years to help turn it around."

And through sharp business acumen, sheer determination, willingness to learn and luck, he did just that.

"Luckily, at that time, the Port of Singapore Authority (PSA) was booming and was looking for contractors to do transportation. They did not have enough lorries to do that so I went in. They asked if I've experience and I said: 'No, my father's trucks ferry only passengers and not cargo'. But I was sure we could also take cargo and I told them I could learn."

In 1978, YCH submitted and won its first tender, marking the company's formal transition into logistics transportation.

Two years later, Mr Yap's brother, Roger, who is now the group's deputy CEO of YCH China and whom Mr Yap had thought was a more suitable successor, also joined the company.

It was then that Mr Yap started to have thoughts of leaving but the idea vanished quickly after his father surprised him by promising to retire.

And, with a firm handshake to seal the promise, the rest was history.

The YCH handshake that Mr Yap described as "very sacred" has become a legend of sorts.

And business is still conducted with that old-school cool.

Says Mr Yap to customers even now: "If I shake your hand, it's a promise and if I've promised, I'll deliver no matter what. If you cannot make promises that you can deliver, who will give you their cargo?"

The emphasis on trust and how one should always toil first before reaping the benefits of hard work are values inculcated in Mr Yap from young.

And these are values that he shares with his employees.

Citing the example of how every trade has its master, Mr Yap points out that he knows of many businessmen who entered the property segment thinking it was the best way to make money.

But many of them failed because they did not have the knowledge, expertise and experience.

"If you focus on your domain, year after year you become stronger in it and ... you build brand, reputation, have troops who are very strong in the domain business. If you do other things you get distracted, isn't it?"

With this in mind, Mr Yap went on to build his logistics empire in a focused manner, layer upon layer.

The 1980s became a period in the group's history where Mr Yap pushed it to become a total logistics business gradually and organically.

In 1981, YCH created an in-house IT arm known as Y3 Technologies that Mr Yap likens to his "secret weapon" used to further the group's business - just like the ones James Bond uses to fight bad guys in the movies, he quips.

Y3 Technologies designed and developed in-house solutions for clients instead of buying solutions off the shelves as it recognised the fact that a customised solution developed for one market could be tweaked to fit the needs of another.

Today, Y3 Technologies is a standalone company that counts YCH as one of its MNC clients.

Back then, the economy was growing and Mr Yap, who holds a Doctor of Philosophy, honoris causa, in Business Administration from Wisconsin International University, realised that cargo transportation was only a part of the supply chain process.

The business was reliant on external parties as it did not own its own assets in every segment of the supply chain.

So he expanded the company to incorporate a warehousing arm, recognising that there were delays to cargo during transhipment.

Mr Yap also went on to build a freight forwarding division and provided insurance brokerage services.

Then in 1987, the company introduced its first logo and tagline - "Your Partner in Total Logistics" - marking the firm's foray as a full-fledged logistics company.


In the subsequent years, the company went on to develop proprietary IT applications to integrate various logistics services.

In 1992, the group opened its first DistriPark at Tuas Road, which was later used as a point of reference for its other similar DistriParks in the Asia-Pacific region, starting with Malaysia and later, China.

The DistriPark was formerly a glass factory that could not attract any buyers, points out Mr Yap, who adds that his team retrofitted it and the move gave rise to the birth of Singapore's first automated warehouse.

Continued investments have helped the firm transform from logistics to integrated logistics to supply chain management and to what it is now - a supply chain solutions provider, offering consultation services and providing logistical support to clients.

By mid-2016, Supply Chain City, the group's new flagship headquarters located in Wenya district in the Jurong commercial hub and easily costing more than S$200 million, will be operational, Mr Yap shares.

The development follows the Land Transport Authority's need to acquire part of the DistriPark for the Tuas MRT extension.

The new facility will house the world's first Fusionaris - a fusion of an Automated Storage and Retrieval System (ASRS) with ramp-up warehousing, research and training facilities, state-of-the art supply chain management technologies and equipment, and lifestyle amenities.

The nearly seven-hectare building will incubate a fully automated warehouse that taps on Radio-Frequency Identification (RFID) technology and WiFi to check inventory.

In fact, the group is also investing in drones to help with the otherwise laborious counting of inventory.

Also in the works is an industrial training centre, mooted by Mr Yap. He explains that the idea stemmed from grooming future employees given the difficulty in attracting fresh blood into an industry deemed somewhat dull by outsiders.

But he hopes the new facility and the technology incorporated in it would wash away the stigma that the supply chain solutions industry is unexciting.

And perhaps he could.

After all, once Mr Yap sets his mind on something, he follows through - one of his guiding principles in life.

The training centre would provide in-depth training that would differ from what the students are taught in polytechnics, he reveals.

YCH might be a family business but Mr Yap says that he has already moved to carry out succession planning and he jokes that his successor is "hopefully not a Carly Fiorina".

Ms Fiorina, formerly chief executive at Hewlett-Packard (HP), was reportedly described in Fortune magazine as a disastrous CEO who "doubled revenue and employment simply by buying a large company, Compaq, in a deal that was a huge loser for HP shareholders".

For the past 15 months, Bennett Neo - the first outside of the family and even the industry - has been running the group as its chief executive.

"Within the industry, we have too much knowledge, all our people know so much, right? So we want somebody with a fresh mind to come in, someone with good corporate governance for example, to be able to lead the team," explains Mr Yap, about his preference for someone without industry background.

Over on the technology side, the group also roped in ex-IBM employee Marc Dragon last November. He is now deputy CEO of Y3 Technologies.

In June 2015, the group brought in Robert Yap Min Choy who is a former president of DFS Venture Singapore and who is now deputy chairman and executive director of Y3 Technologies.

With succession planning already in place, Mr Yap wants to list the group in Singapore in the next two to three years.

The key reason is "to provide good governance for my group because if the company is public, the staff will be more careful".

The second reason is because he anticipates the need for financial depth as the company grows.

While he prefers growing the business organically for a stable foundation, he admits that, as a public-listed vehicle, it would be easier to make acquisitions when the group moves overseas instead of having to start from scratch.

Currently, a third of the group's business comes from China and Mr Yap says that the company is expected to grow by 20 per cent year on year in 2016.

In five years' time, Mr Yap hopes that YCH would be a global company. "I want to turn it into a global leading company to compete with the likes of MNCs and the bigger boys. Today we're already fighting these companies in Asia-Pacific."

So far, interested parties have knocked on his door, but Mr Yap says that he is not selling YCH.

"I'm not for sale because I feel that as a Singapore conglomerate, homegrown company, we definitely have the potential to be the No 1 in the world. That's where we are moving towards.

"But we need a lot of good talent and that's why I'm building talent through the academy. In five or 10 years' time, these people we groom will be future leaders. On top of that, I'm also embracing the Singaporean core - I want my leaders to be Singaporean but with regional knowledge."

Having said that, critics would point out that the outlook for the industry looks bleak.

Already, some players are feeling the squeeze, but Mr Yap remains bullish even as he acknowledges the headwinds, which include the increasing supply of warehousing in the next one to two years even as demand remains the same, as well as slowing regional economies.

"We're in the high-end niche area, coupled with the transformation mindset, the more we transform, the more we grow ... The traditional part will shrink and go out of business but we will grow even faster. Why? Because now, times are bad, and they need to change for survival so we think we will benefit from the bad times even more."

This perhaps demonstrates the knowledge Mr Yap has about his business and could be part of what underscores his success.


Besides perseverance, passion and resilience, budding business leaders must have "the penchant for risks", he feels.

"If you don't think you can take risks, don't be a businessman because you'll never succeed. We're not talking about taking kamikaze type of risks but those that could injure but not kill," Mr Yap notes.

Growing inclusively, particularly in overseas partnerships, is also key.

"It's also important to allow your partners to grow inclusively with you. That's very important because once you're able to do that they take you as a good employer, a good company to work with. But the moment they think you're ripping everyone off, one wrong move and you're gone. Even if they can compete with me later on, they become big, actually I'm very happy. I've got no problem with that."

Mr Yap's final tip for budding businessmen?

"Do something good for the environment. It could be painful initially, but ultimately it'll pay (off)."

Looking back on his career over the years and his initial reluctance in taking over the family business, Mr Yap adds, with a laugh: "I ended up loving the business. I thought I would never (love it). So, love can be nurtured."

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