U.S.-based hard disk drive maker Seagate Technology International today won the prestigious Singapore Manufacturing Excellence Award. The award, presented by Singapore’s Economic Development Board in cooperation with McKinsey & Co. and the Singapore-MIT Alliance, considered such factors as product innovation, systems innovation and operational excellence.
“Seagate came up tops in all aspects and is indeed, a company at the cutting edge of manufacturing excellence,” said University of Warwick professor Kumar Bhattacharyya, who headed the panel of judges. All six of the finalist companies — narrowed down from 43 nominees — demonstrated manufacturing best practices, he said, such as Six Sigma and Lean manufacturing and teams-based production. “Seagate had the extra bit over and above best practices,” he said.
For example, not all companies had live visual displays of performance data streamed on monitors on the production floors, said McKinsey & Co. director Hsieh Tsun-yan, one of the MAXA partners. “We also saw a great deal of difference in mindset,” Hsieh said. “Were their employees just trying to meet their quotas for the day, or were they pushing innovation?”
To qualify for the award, manufacturers had to have manufacturing operations in Singapore, which Seagate has had since 1982. Seagate has two plants in Singapore, which account for 80% of its worldwide hard drive production capacity. In addition, Seagate also has its product launch and regional headquarters in Singapore.
Two other companies were also recognized with awards by MAXA judges. BD Medical Pte. Ltd., a medical device maker, received the MAXA 2006 Product Innovation Award. BD Medical Singapore is the Asia-Pacific regional quarters of U.S.-based Becton, Dickinson and Co., one of the world’s leading medical device makers. BD Medical makes hypodermic needles and syringes, catheters, and other critical care products, exporting more than 4 billion units from Singapore each year. The company has a BioVenture research and development center located in Singapore’s Biopolis, a biotech research park.
Phillips Domestic Appliances and Personal Care Singapore won the MAXA 2006 Singapore Advantage Award. The company, a market leader in irons, shavers and vacuum cleaners, has formed a strong ecosystem of suppliers and partners centered around its Singapore facilities, the judges said. In addition to its manufacturing facilities, Phillips’s Innovation Campus employs more than 1,300 engineers in Singapore and enjoys strong relationships with local research institutions.
In addition to Seagate, Phillips, and BD Medical, MAXA finalists included Kenwood Electronics Technologies Pte. Ltd., a subsidiary of Kenwood Corp.; Merck Sharp & Dohme, a subsidiary of pharmaceuticals manufacturer Merck & Co.; and Leica Instruments Singapore Pte. Ltd., a subsidiary of Leica Microsystems GmbH (bought by Danaher Corp. in 2005).
According to Ko Kheng Hwa, managing director of Singapore’s Economic Development Board, the MAXA awards are designed to recognize that manufacturing accounts for about a quarter of the nation’s Gross Domestic Product (GDP). “Manufacturing has put Singapore on the world map,” he said.
Even the rise of China as a manufacturing superpower hasn’t slowed the growth of manufacturing in Singapore; if anything, it has spurred it, said Economic Development Board’s Richard Tan, the regional director for Asia-Pacific. “Manufacturing is the single largest contributor to our economy,” he said. “It has actually outstripped the growth of other sectors.” Singapore is no longer a low-cost production center, government officials said today. Instead, survival depends on innovation — in products, in operations, and in logistics.
“In the early days, we did very simple consumer electronics,” said Lim Hing Kitan, Singapore’s Minister of Trade and Industry. “Today, it’s very different. We have Seagate, Motorola…. The nature of electronics has become more sophisticated. The next stage must be innovation. We cannot compete just on the basis of cost efficiency.”
To achieve this, he said that the government has set a goal of raising R&D investment from the current 2.5% of GDP to 3% over the next five to seven years. Since the government is responsible for about 40% of Singapore’s R&D spending, that totals about $1.5 billion in total annual spending, he said.
Today, the Singapore government is responsible for about $1.3 billion of R&D spending, he said. These projects include work with the Institute of Chemical Engineering Sciences, mirroring the country’s strength in the petrochemical industry. There are also institutes for engineering and microelectronics.
“And over the last four or five years we have systematically set up research institutes in the biomedical sector,” he said. Singapore is also investing in water technologies, such as desalination plants and waste water treatment, he said. “Because of our peculiar problems, 50% of our water is imported from Malaysia,” he said. “We decided that we wanted to be totally self-sufficient in 10 to 15 years.”
Today, water technologies accounts for about 1% of Singapore’s GDP, he said, and is expected to grow. To promote this sector, the government is providing training courses, working to bring international companies like GE to Singapore, and investing $320 million in research and development over the next five years, he said.
This article was originally published in Managing Automation, which has since ceased publication.