Why Singapore businesses need excellence as standard

Singapore has become internationally renowned for its business performance, but as global competition increases and the economy in South East Asia continues to struggle, excellence in business performance has become a necessity for all.

The term ‘business excellence’ has long been in use. Some organisations pursue it relentlessly - and successfully. Often it’s an aspirational state that many seek but which few reach; a journey that begins in earnest but is then cut short as organisations lose their way, or their enthusiasm, and revert to mere business adequacy.

To an extent, global recession was a reboot; revealing many organisations’ own definition of excellence as rather loose and their ambition for improvement lacking. Comparing themselves to their peers in the same league and ignoring the premier division above, was masking an average performance, but with their processes severely tested by the economic downturn, and a need for capital, they were exposed.

Forced to reduce costs, companies drained inventory out of the supply chain, only to discover that they were then unable to get the performance they needed to meet customer demand as it returned. 

Figures from the Singapore Ministry of Trade show the economy grew 3.7 per cent year-on-year in the second quarter of 2013. Growth is led by the services sector (up 5.0 per cent), but manufacturing also expanded by 1.1 per cent following a 6.9 per cent decline in the previous quarter, largely because of strong growth in the output of the biomedical manufacturing and electronics sectors.

However, elsewhere in the region the outlook is much less certain as the US dollar strengthens and investors pull out of emerging markets.

Arguably, global consumer demand has to an extent stabilised (if not recovered) but volatility still exists in the supply chain as those further from the demand signal depend on unreliable forecasts from their customers; for many the forward horizon remains difficult to predict.

These are circumstances that would previously have sent organisations scrambling for an IT solution to the problem, but these days there’s increasingly widespread acknowledgement that the tools on their own don’t deliver the desired business type, size or performance; the foundation of excellence lies in people and their knowledge. Rather than spend $5 million on a new IT system, organisations are choosing to invest five to 10 per cent of that figure in people and process instead, and they’re getting substantially better results.

Class A is a recognised industry standard for business excellence, established by Oliver Wight and defined against a set of specific criteria. These are not academic targets but real-world performance measures, which companies naturally focus on as a fundamental part of their operations.

But organisations don’t usually start out just to achieve business excellence or Class A per se. Typically it’s because they have some kind of burning platform and need to get better at something quickly - they want to improve customer service; they want greater control over the supply chain; they want to become more integrated, and so on.

Achieving and sustaining these things will naturally lead to Class A performance, but it’s right that organisations don’t view Class A as an objective in itself; business excellence is achieved by taking a sequence of small steps, which in themselves will bring immediate returns for the organisation.

And typically the return on investment goes way beyond what they originally based their business case upon.  There will be a direct ROI in terms of improved supply chain management, inventory control and integrated business planning, but organisations can also get an unexpected improvement in ROI of their IT systems as a result of process improvement and the performance of their people.

Add to this the benefit of a view of the future horizon out to at least 24 months, with rolling monthly reviews; there are clearly significant opportunities to improve the ROI still further.

Those organisations that heeded the warnings of the recent past and have already embarked on business improvement programmes, are now feeling the benefit in improved visibility of demand and capability in supply; as well as better understanding and management of their product portfolio.

Whilst global economic conditions remain uncertain, investment in people and processes now can both deliver results quickly and make the difference between staying in business or not in the future.

Business excellence is about being in control and real control means you can operate the organisation in a leaner fashion, while still meeting customer expectations. Being excellent is now a necessity, not a luxury or just a plaque on the wall. Excellence will be the winner in the future and there will be no going back to the sub-optimal performance of the past.