Ladies and Gentlemen
1. A very good morning. I am happy to join you at the Food Services Transformation Conference 2018 organised by the Asian Culinary Institute (ACI), a Continuing Education and Training (CET) institute of Nanyang Polytechnic (NYP). Let me start by congratulating winners of the Samsung D/code Hackathon for their good work in coming up with technology solutions for our industry partners! I am also heartened to know there are many tripartite partners here with us today, including industry associations and union leaders. Your support and partnership are very important enablers for our skills development and industry transformation efforts.
Ingredients for Success in Food Services
2. Singapore has an international reputation as a food paradise. The Food Services industry is a key part of our economy. The sector employs over 180,000 employees and contributes almost $9 billion in operating receipts in 2016. To overcome manpower constraints, Food Services companies have been transforming their business models. Companies understand that if they want to achieve sustainable growth in a tight labour market, there is no other alternative. They have to invest in technology to improve their productivity; they have to innovate and come up with better products and services; and they have to invest in upskilling their workers through lifelong learning and continuous education and training.
3. Indeed, technology can be a useful tool and powerful enabler for our businesses. Appropriate use of technology can help to improve efficiency and save costs, reduce reliance on manpower, raise service quality, and reach new customers and markets. But like all tools, we need to apply technology smartly to support new business models and process re-engineering. The objective is not to chase technology as an end in itself. That will be like having a hammer and treating every problem as a nail.
4. I remember going to a bak kut teh restaurant a few years ago. They adopted e-menus for customers to order their food, using tablets that are attached to the tables. One tablet per table. The idea is alright, but the way they implemented it was not. When a tablet was not working, either because the system hanged or someone accidentally spilt soup on it, customers could not sit at that table because there was no alternative channel to order their food. It happened to me. The tablet at my table was not working, and the waitress told me that she could not take my order as the system did not allow it, and I would have to change to another table. For restaurant owners and chefs here – you know how important it is to have seating capacity. The seating capacity is directly linked to your revenue and your ability to serve customers. By applying the e-ordering system in that way, with no backup or alternative, it was not well-designed. Yes, they were using technology, but they were not using it in a way that benefitted them.
5. This story shows the pitfalls of blindly chasing technology, which led to higher costs and lower productivity. As the Chinese saying goes, “赔了夫人又折兵”. But the problem was not the technology per se, it was how the technology was applied. If the process is well-designed, and the technology is used appropriately, it can produce positive outcomes as we have seen in many other cases. I shared the story not to discourage you from using technology, but instead to encourage you to use technology and apply it appropriately to solve problems, to be clear about the outcomes and objectives to be achieved. Don’t blindly apply technology, because it is a tool and enabler, a means to an end and not an end in itself.
Technology as an Enabler to Food Service Enterprises
6. For Food Services companies, factors like ingredient quality, method of preparation, as well as quality of presentation and service are important differentiators. Business overheads arising from backend logistics and support functions must also be carefully managed. By harnessing technology smartly and appropriately to enhance these key areas, companies can achieve transformative improvements. For example, technology and business process re-engineering can bring benefits to different parts of the value-chain, ranging from customer relationship management, to inventory and procurement management, and mobile ordering platforms.
7. A couple of weeks ago, I visited a JTC industrial estate that was targeted at food manufacturing. They built a centralised facility - a coldstore, to be shared by all the tenants in the building. So instead of having their own coldstores, which lack economies of scale, it was centrally built, to be shared by everyone. Whenever one needed a particular order or needed to top up the supplies, they just needed to inform the service provider and there would be a pallet lift that would automatically pick the right box and send it right up to their office or factory. It resulted in cost and time savings, and was better for productivity. These are things that we can do, through the use of design, technology, business processes, re-engineering, to help our companies operate more effectively and more efficiently.
8. I am glad to know that many companies recognise the need to adopt technology thoughtfully, and have made significant headway through digitalisation. Take for example Creative Eateries, one of the companies whom we have invited today to share about their best practices. They have implemented an internal system to facilitate the ordering of ingredients such as sauces, soups and par-cooked meat from the central kitchen. This allows the company to better predict production levels and provides live information of inventory levels, which leads to better management of product shelf-life and lower storage costs.
Adapting to Trends in the Food Services Landscape
9. Our companies also need to look beyond the current landscape to see how consumer preferences and tastes are evolving, and adjust their business plans accordingly. For example, we are seeing rising consumer demand for healthier meals that are tasty, and many Food Services companies are responding to this trend by changing their recipes and using healthier ingredients and methods of preparation.
10. The Soup Spoon adopts a brand position focused on health and wholesomeness as a key differentiator, and develops menus to capture the health-conscious market. They continue to innovate and push out monthly specials, coming up with new products like soup packs and ready meals to enter new channels and markets. The use of High Pressure Processing to extend shelf life of its soup packs has also enabled Soup Spoon to export its healthy and wholesome soup to Hong Kong. We know Hongkongers, like Singaporeans, are very particular about the quality and taste of their food. So breaking into the Hong Kong market is an achievement, and I wish Soup Spoon continued success in their overseas expansion.
11. There are many other examples, including food-related research centres and companies that I used to work with when I was at MOH, to produce healthier food products using innovative ingredients like resistant starch and beta glucan, as well as novel sugars like Allulose and Isomaltulose which can sweeten food without causing a spike in blood sugar levels. There is a lot of scope for Singapore food companies to take advantage of our trusted brand name and our strengths in R&D to develop more healthier food products that can benefit consumers in Singapore and overseas.
12. We also want our companies to continually innovate and re-engineer their business processes. One example is the VendCafé by JR Vending. They provide a cluster of machines dispensing hot meals at any time of the day. A simple, yet productive concept, their model did not fit into the traditional definition of a food shop. Different regulators had to work together to bring the idea to fruition. This example illustrates the importance for government agencies to adopt a pro-enterprise approach in reviewing our licences and rules, and to work closely with businesses to allow innovative business concepts in Singapore. We are coordinating our on-going efforts in this area through the Pro-Enterprise Panel.
Enhancing Service Delivery with Technology
13. Besides adopting technology and digital solutions, an industry such as Food Services can only flourish if our companies invest in training your workers well. We must deepen our workers’ skillsets so that they can use technology effectively and master their skills in preparing the food or providing quality service to customers.
14. Koi is a good example. They have implemented self-ordering kiosks with cashless payment, and trained their staff to master the new technology so that they could guide customers through the new ordering process. Over time, as customers became more familiar with the process, Koi was able to redeploy their staff to focus on making drinks, instead of taking orders and payment. I’m sure they can look for other ways as well over time, to train their staff and raise their skill levels to provide better customer service. I hope in the process where the company makes better returns, that they remember to share some of the gains with the workers. That is an important motivation for workers to continue to upskill, and it is a win-win arrangement for both the company and the workers.
Deepening the Skillsets of our Workforce
15. One of our SME recipients for this year’s SkillsFuture Employer Awards for SMEs is The Wok People; a company that believes in investing in its workforce, and has a strong commitment to staff development and growth. Besides on-the-job training, The Wok People also develops customised training programmes to upskill its employees. In addition, the company hires and retains Singaporean workers through internships and schemes like the SkillsFuture Earn and Learn Programme, SME Talent programme and P-Max. It has also joined the SkillsFuture SME Mentors programme to enhance the company’s learning and development capabilities, and it has supported this event through the Samsung D/code Hackathon.
16. Our talents in the industry need to focus on skills mastery, take pride in doing their jobs well, and become better and better in it over time. In other words, have a lifelong pursuit for excellence, and focus on continuous skills upgrading and mastery. We see this spirit in our SkillsFuture Fellowships recipient, Mr Gwern Khoo, from A Noodle Story at Amoy Street Food Centre. He honed his culinary skills through experimentation, and worked for free at top restaurants to learn from the best, eventually setting up his own hawker stall to sell Singapore-style ramen. His deep skills were recognised through various awards, including being featured on the Michelin Bib Gourmand list since 2016. Importantly, Gwern is not resting on his laurels. He now plans to set up a hawker institute to teach others how to operate a hawker stall.
Conclusion
17. Ladies and gentlemen, the examples I have shared with you this morning illustrate the need for our companies to apply technology appropriately; to innovate and keep pace with changing customer demands and expectations; and to invest in the lifelong learning and continuous education and training of their workers. I believe these efforts will lead to a win-win outcome for both businesses and workers, so that when businesses succeed, they can create better jobs, better pay and better life for our workers.
18. Let me conclude by thanking all of you for your commitment and support in pursuing digital transformation for the Food Services industry. The government will continue to walk this journey together with you, so that together, we can take the industry to even greater heights.
19. Thank you.