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Productivity is a buzzword that will never become obsolete.
Most commonly, it is measured by output over input and is necessary for businesses to enhance their competitiveness and profit margins.
Says Dr Michael Teng, chief executive officer of the Singapore Innovation and Productivity Institute, Singapore Manufacturing Federation (SMF): “This is especially important in today’s context, where SMEs (small- and medium-sized enterprises) are faced with rising business costs, tight labour policies, and intense global competition.
“SMEs must be able to efficiently and effectively utilise their resources, such as capital and talent, to increase productivity.”
Simply put, businesses can increase their productivity by either increasing output or reducing input. Output can be raised by creating new demand and increasing existing demand.
Companies can adopt the Business Model Innovation (BMI), which is about creating, capturing, developing and delivering value to the customers and the market, especially pertinent for manufacturing businesses struggling with disruptive technologies and global competition.
“For example, Singapore companies in the past were able to build their business models around being middlemen, agents, distributors, and traders. However, such models are being marginalised as it is very easy today for buyers to find sellers — and vice versa — due to globalisation and the Internet.
“Hence, they must transform their business models to retain their competitiveness,” says Dr Teng.
Reducing input such as business costs and eliminating waste in the workplace are strategies that can also help to increase productivity.
Many companies face the challenge of sustaining their productivity, as it fizzles out after a while, and the firm returns to business-as-usual. Hence, it should be part of the company’s DNA.
He says: “Raising productivity is a journey, rather than short bursts of enhancements to be employed only when deemed necessary.
“Companies, especially SMEs, should look into their long-term goals rather than focusing on the short-term ones, and to inculcate a productivity culture.”
To do this, Dr Teng advises companies to first create a culture of productivity instead of merely just doing productivity projects.
SMEs can seek help from the three local productivity centres offering productivity advice and consultancy services — the Singapore Innovation and Productivity Institute (for manufacturing), the Singapore Productivity Centre (for food services, retail and hospitality sectors) and the Construction Productivity Centre by the Building and Construction Authority (for the construction industry).
Trade associations such as the SMF are also a source of networking, information and training opportunities.
Initiative to enhance productivity at Alliance Healthcare Group
Two years ago, the Alliance Healthcare Group realised that its appointment and patient data system was hindering expansion.
So it collaborated with Spring Singapore on a series of productivity-enhancing initiatives.
The group, which includes 13 general practitioner clinics and has a network link with over 500 other clinics, provides medical services to companies.
Says Dr Barry Thng, the group’s chief executive: “Enhancing productivity is the only way companies can continue to grow while still staying lean and keeping operating costs low.
“There is a particularly strong impetus for firms in Singapore to improve their productivity because of the high cost of labour.”
As Alliance Healthcare grew, its existing infrastructure, and in particular its call centre, was unable to support its expanding operations.
A lot of time was spent on the phone to book appointments; and information capture, updating, tracking and reporting were done
manually using Excel spreadsheets.
“It was not only labour-intensive, but lacked real-time visibility of activities and client support to facilitate decision-making. These manual processes are prone to human error, process lapses and time-wasting,” says Dr Thng.
Now, its members can make use of an online appointment request application, which then auto-populates the information to a patient data system, with the appointment requests being assigned to specific contact agents. Confirmation of medical appointments with members are then sent via text messages.
Reports can now be completed within half a day, with an estimated 50 to 85 per cent improvement in productivity. Appointment services can also be scaled up considerably.
He says: “This improves Alliance’s processes and workflow quality, efficiency and timeliness, optimises resource allocation and reduces call centre and overall operating costs. Most importantly, these improvements help our members to secure faster medical appointments for timely treatment.
Capability Development Grant
The Capability Development Grant (CDG) is aimed at helping small and medium-sized enterprises (SMEs) embark on upgrading projects to improve productivity and develop business capabilities for sustainable growth.
Under the scheme, SMEs can defray up to 70 per cent of qualifying upgrading project costs.
Information about business upgrading and the CDG will be shared at the SME Capabilities Series, where industry experts speak on the various business capabilities and how investing in these capabilities can enable sustainable business growth.
“At the end of the day, these improvements will reap higher customer satisfaction, due to faster response with real-time data, enable the management to make quick business decisions from the automated management reports generated by the system, eliminate repetitive manual work by employees and redirect their focus to more value-adding tasks.”
All these have been made possible with the support of Spring Singapore’s Capability Development Grant (CDG). With a consultant’s help, the company identified the solutions for resource optimisation, process redesign and cost reduction.
Dr Thng says: “SMEs with plans to strengthen their business capabilities and raise productivity should seriously consider optimising the various government grants for businesses, such as the CDG.
“Our application process was hassle-free, and from our experience, Spring Singapore is very supportive of SMEs — they have provided us with helpful guidance from beginning to end.”