Building a Logistics/Supply Chain Hub– The Singapore Experience
Hum SinHoonNUS Business School
National University of Singapore
BACKGROUNDSingapore Rankings
World Business Environment
Rank Country Total Score
1 Denmark 8.75
2 Finland 8.72
3 Singapore 8.70
3 Canada 8.70
5 Switzerland 8.66
6 Australia 8.65
7 Hong Kong 8.64
Source: EIU Country Forecast, February 2008
Singapore Rankings
Most Cost-Competitive Place for Business
Country Cost Index RankSingapore 77.7 1Canada 94.5 2France 95.6 3Netherlands 95.7 4Italy 97.8 5UK 98.1 6United States 100.0 7Japan 106.9 8Germany 107.4 9
Source: KPMG Competitive Alternatives Study, 2006
Singapore Rankings
Top Economies in terms of Ease of Doing Business
Rank Country1 Singapore2 New Zealand3 United States4 Canada5 Hong Kong6 United Kingdom7 Denmark8 Australia9 Norway10 Ireland
Source: World Bank Report: "Doing Business 2007"
Singapore Rankings Bureaucracy and Red Tape in Asia
Country Level of Red TapeSingapore 2.48Hong Kong 2.52Taiwan 5.21South Korea 5.49Malaysia 5.9Japan 6.07Thailand 6.39Philippines 7.54China 7.67India 8.2Vietnam 8.23Indonesia 8.62
Source: Political and Economic Risk Consultancy, June 2006
Singapore Rankings Perceptions of Corporate Governance Standards
Country Level of Red TapeSingapore 2.4Japan 3.8Hong Kong 4.2Taiwan 5.8South Korea 5.9Thailand 5.95Malaysia 6India 6.1Philippines 6.85Indonesia 7.5China 8Vietnam 8.8
Source: Political and Economic Risk Consultancy, June 2006
Singapore Rankings Level of Corruption
Country Level of Red TapeSingapore 1.3Japan 3.01Hong Kong 3.13Macau 4.78South Korea 5.44Taiwan 5.91Malaysia 6.13India 6.76China 7.58Thailand 7.64Philippines 7.8Vietnam 7.91Indonesia 8.16
Source: Political and Economic Risk Consultancy, March 2006
Singapore Rankings
World's Most 'Network Ready' Country
Rating Country
1 United States
2 Singapore
3 Denmark
4 Iceland
5 Finland
6 Canada
7 Taiwan
8 Sweden
Source: Global Information Technology Report 2005/06,World Economic Forum
Singapore Rankings
Quality of Air Transportation
Country RankingSingapore 1Bavaria 2Hong Kong 3Germany 4Denmark 5Finland 6Australia 7Austria 8Iceland 9Netherlands 10
Source: World Competitiveness Yearbook 2006
Singapore Rankings
Quality of Port Infrastructure
Rank City1 Singapore2 Netherlands3 Hong Kong4 Germany5 Belgium6 Denmark7 Finland8 Japan
Source: Global Competitiveness Report 2006-2007
Singapore Rankings Logistics Performance Index
Country LP Index RankSingapore 4.19 1Netherlands 4.18 2Germany 4.10 3Sweden 4.08 4Austria 4.06 5Japan 4.02 6Switzerland 4.02 7Hong Kong 4.00 8United Kingdom 3.99 9Canada 3.92 10India 3.07 39
Source: World Bank Report on “Connecting to Compete”, Nov 2007
Singapore As Logistics/SCM Hub
In 2004(2007): Contributed 9.1%(9.4%) ofSingapore’s GDP; Employed Over110,000(180,000) People
Nearly 180 Global Companies Basedtheir Procurement & Marketing inSingapore to Reach Out to Asian Markets
Over 9,000 Logistics Establishmentswith 21 of the World’s Top 25 3PLCompanies Operating in Singapore
As Logistics/SCM Hub
World’s Busiest Port for Shipping Tonnagesince 1986; New Record of 1.15 billion grosstons in 2005
World’s Leading Bunkering Port since 1988;Supplied Record Total of 25.48 million tons in2005
One of the World’s Busiest Container Portswith a Record of 23.19 million TEUs Handled in2005
Best Seaport in Asia by Asian Freight & SupplyChain Awards 2006 (18th Time)
As Logistics/SCM Hub
Sixth Busiest Airport in Asia; Served 32.4million Passengers and Handled 1.83 milliontons of Cargo in 2005
Manages 82 Scheduled Airlines Operatingmore than 4,000 Weekly Scheduled Flightsto 181 Cities in 57 Countries (as at 1 April2006)
Changi: Best Airport Asia; SATS: Best AirCargo Terminal Operator in Asia by AsianFreight & Supply Chain Awards 2006 (20th &10th Time respectively)
STRATEGIC PARAMETERSOverall Considerations
ConnectivityAir, Sea and IT Infrastructure; FTAs, DTAs, MRAs and IGAs
OpennessGlobalisation; Cultural & Economic Infusion;
Cosmopolitanism; Foreigner-Local Ratio (1:4)
ReliabilitySafe, Stable, Pro-Business, Transparent, Consistent
Environment that Protects Physical & IP Investments
EnterpriseConcentration of International Enterprises, HQ Operations,
Startups; Enterprise Ecosystem Spurs Interaction & Growth
Impetus as Logistics/SCM Hub
Supports Singapore’s External Trade(Three Times the GDP)
Accounts for 8-9% of GDP
Projected Growth of Asia’s SCM Industryat over 25% annually
Singapore’s Entrepot Heritage
Contributes to Singapore’s Overall HubStatus
SWOT Analysis (as SCM Hub)
StrengthsWorld Class Physical Infrastructure
Strategic Connectivity
Major Shippers and Logistics Players haveRegional HQs and Offices in Singapore
Stable Political, Economic and SocialConditions
Educated Workforce
Strong Legal System and Business-FriendlyTax Structure
Proactive & Pro-Business Government
Source: ERC Working Group on Logistics
SWOT Analysis (as SCM Hub)
WeaknessesRelatively High Costs (Land Rentals & Wages)
Small Geographic Space and Domestic Market
Fragmented Logistics/SCM Industry; Lack ofCollaboration
Lack of Responsiveness to Customers’ Needs
Shortage of Skilled, Experienced andEntrepreneurial Logistics Professionals
Inadequate Technological SCM Capabilities
Weak Marketing of Singapore as Log/SCM Hub
SWOT Analysis (as SCM Hub)
OpportunitiesStrong Growth Potential for Logistics
Outsourcing in Asia
Major Growth Oriented Hinterland
Specialised Capabilities for Other SectorExpansion Plans (Biomedics and Chemicals)
Support for Offshore Trade
Establish Reputation as Secure Logistics Hub
SWOT Analysis (as SCM Hub)
ThreatsAlternatives to Singapore as Locations for FDIs
(as in Structural Shift of Manufacturing to China);Affects Potential Cargo Volume
Intense Regional Competition (HK, Taiwan,Malaysia, Thailand, Philippines)
Technological Advances (as in Increase of Sizeof Ocean Liners and Jetliners) may result inVessel/Aircraft Operators Bypassing Singapore
Singapore’s Vision for Log/SCM
“ To Develop Singapore into a LeadingGlobal Integrated Logistics Hub, withRobust Maritime, Aviation, and LandTransport Capabilities Supporting theGlobal Economy ”
Global Integrated Logistics HubAs Nerve/Brain Center Controlling and
Managing Activities and Assets of GlobalSupply Chains Across an Expanded Hinterland
INFRASTRUCTURAL ELEMENTSOverall View
Pillars and IntegratorsSCM Capabilities and Technologies are the
Integrators of the Three Pillars of Maritime,Aviation, and Land Transport
Three Key Foundational EnablersPolitical, Economic and Regulatory Stability
Excellent Physical, IT and FinancialInfrastructure
Critical Mass of World Class LogisticsProfessionals with Strong Customer Orientation
Physical & Virtual Hub
Leveraging Strong Physical HubCapabilities and Integrating these withKnowledge Intensive SCM Skills andTechnologies to Build a Strong Physicalcum Virtual Hub
Physical HubReview and Manage Costs (Fees and Charges)
Review Government Regulations (Policies thatHinder Logistics Businesses)
Physical & Virtual Hub
Virtual HubValue in Cargo Movement Versus Value in
Controlling and Optimising the Flow of Cargothrough Information Management
Next Lap of Development: Providing SpecialisedValue-Added SCM and Supporting ServicesCatering to the Needs of a Broader HinterlandBeyond Singapore
Beyond Actual Handling of Goods, Singapore tobe the Brain Controlling the Logistics Limbs(Planning & Control Functions) that ExtendsBeyond Singapore
Physical & Virtual Hub
Virtual HubLondon-Plus Framework
Building a Vibrant Transport & Logistics Sector withHighly Skilled and Experienced Professionals (the ‘soft’focus)
Maintaining and Leveraging on Excellence in PortHandling Facilities, Ship Registry, Bunkering, ShipRepairs and Logistics, and Transport & Logistics IT
IT for Logistics Nerve Center
Common Backroom Infrastructure; Development ofSoftware Developers & Applications; Integrated ITCommunity Platform; Build Knowledge Capital
Physical & Virtual Hub
Virtual HubSCM Nerve CenterDevelopment of Logistics Ecosystem (Knowledge-
Intensive & High Value-Added Activities like Sourcing& Procurement; Assembly & Testing; SC Configuration& Optimisation; Data Hosting; Reverse Logistics;Financial & Treasury Functions)
Thought Leadership Development in SCM Solutions
SCM Talent and Capability Development
Secured Hub
Multimodal Connectivity
Fiscal Considerations
GOVERNMENT INVOLVEMENTAgencies
Regulatory/DevelopmentalMaritime Port Authority (MPA)
Civil Aviation Authority of Singapore (CAAS)
Land Transport Authority (LTA)
Promotional/Marketing Economic Development Board (EDB)
International Enterprises Singapore (IES)
Infrastructural Jurong Town Corporation
Local Enterprise Support SPRING Singapore
Champion Agency
Examples of Govt Supported Programs
Graduate Manpower (NUS BBA Program; TLIAPDual Masters Program)
Strategic Manpower Conversion Program(SMCP; IE Singapore and MOM)
Local Enterprise and AssociationDevelopment Program (LEAD; IE Singaporeand SPRING Singapore)
Logistics Enhancement and ApplicationsProgram (LEAP; Multi-agencies)
Logistics Capability Development Program(LCDP; Spring Singapore)