Productivity in Singapore's Retail and Food Services Sectors

Contemporary Issues

Mun Heng Toh, Shandre Thangavelu

• Publisher: WSPC
• Year: 2016
• Topic: Business
• eBook ISBN:
  9789813142428
• Subtopic: Entrepreneurship
• Index: Business

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The Retail and Food Services sectors play an important role in Singapore. They add to the vibrancy of the economy and contribute to the social well-being of Singaporeans. At the same time, they are often highlighted and scrutinised for their low productivity performance and high reliance on manpower. There is to date a lack of local literature that addresses the issues faced by the two sectors at the enterprise and worker levels.

This timely book includes major topics in services productivity in the Singapore context, with emphasis on Retail and Food Services. Topics covered include the key productivity levers of the services sectors: holistic productivity measurement framework, effective entrepreneurship, manpower management, promotion by social media, marketing, costing process and accounting sophistication. These areas are explored through literature reviews and in-depth interviews with companies and consumers. The chapters also include recommendations for policy makers and industry stakeholders. Written in a simple and accessible manner, this book will serve as an insightful guide to researchers, policy-makers, industry practitioners and enterprises and those who are keen to learn from the Singapore experience.

--> Contents:

• Introduction
• Analysis of Singapore's Productivity Performance and Proposal for 8M Framework to Raise Productivity Growth in the Retail and F&B Sectors
• Measurement and Surveillance of Productivity Performance Based on 8Ms — Application to Retail and Food & Beverage Sectors
• Entrepreneurship, Start-ups and Productivity: Entrepreneurism in Singapore's Retail and Food & Beverage Sectors
• Part-Time Workers' Productivity in the Food & Beverage Sector
• Human Capital Issues in F&B and Retail Sector in Singapore: Engagement, Retention and Usage of Mature Workers
• Usage of Social Media to Raise Productivity in the Food & Beverage Sector
• Suffiency of Marketing Efforts by Singapore SMEs in Retail and Food & Beverage Sectors
• Cost Control and Accounting Practices: Impact on and Improvement of Productivity in Singapore Food & Beverage Enterprrises
• Conclusion

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Readership: Policy-makers, industry practitioners, productivity analysts and researchers; other countries who are keen to learn from the Singapore experience; and those who are keen to expand into the Singapore market.
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Chapter 1

Introduction

 

1. Priority Attention Given to Retail and Food & Beverage Sectors¹

The productivity growth of the Retail and Food & Beverage (F&B) sectors in Singapore has been low compared to the other sectors and the national average. In 2009, the nominal value added per worker of the Retail and F&B sectors was $37,000 and $22,300, respectively, less than 40% of the national average of $89,800.

Consequently, Retail and F&B are two sectors that are given priority attention by the National Productivity Council (NPC); and SPRING Singapore has been designated as the lead agency for these two sectors. In 2011, SPRING announced two five-year productivity plans to upgrade the sectors, one each for Retail and F&B. Retail was allocated a budget of $86m; and F&B, $75m. This demonstrates the government’s commitment to raising the productivity of the two sectors.

2. Establishment of Singapore Productivity Centre

To give focused attention to helping companies in the Retail and F&B sectors, the Singapore Productivity Centre (SPC) was set up in October 2013 under the aegis of the NPC. In executing its mission, SPC supports SPRING in the implementation of the productivity plans.

SPC offers a comprehensive range of services that span six major areas. These are consultancy services; training and workshops; study missions; conferences; benchmarking; and applied research.

3. Applied Research Studies of Retail and F&B Sectors

SPC’s applied research studies cover analyses of industry trends and key issues; identification of best practices; case studies of companies and other productivity-related topics. Besides supporting the other services offered by SPC, the applied research studies shed light on the key issues facing companies; and guide companies and policy makers to take the appropriate actions.

This publication summarizes the major findings of the applied research studies undertaken by SPC in 2014 and 2015. Companies can learn from these findings, benchmark themselves against others and seek assistance from SPC in their productivity journey. Policy makers can also draw conclusions from the findings to help refine and fine-tune policies that are directed at these two sectors.

4. Outline of Publication

The areas covered in this publication reflect the key issues facing companies in the Retail and F&B sectors. Table 1 outlines the various chapters in the publication.

Following the introduction in Chapter 1, Chapter 2 discusses the reasons for the lack of productivity growth and the key challenges in improving productivity in the services sectors, particularly in Retail and F&B. The 8M framework is introduced as an integrated approach to managing productivity growth. The 8Ms comprise Management (leadership and management practices), Manpower (human resources), Material (physical resources and services), Method (appropriate technologies, capital equipment and processes), Money (financial resources), Make (product variety and innovation, and customer experience), Market (domestic and international markets) and Message (branding and communications, both internal and external). The framework enables monitoring, analysis and planning for productivity improvement at the national, industry and firm levels.

Table 1:   Chapters in Publication and Areas Under the 8M Framework that are Covered

Chapter	Title	Areas Under 8M Framework Covered
1	Introduction	—
2	Analysis of Singapore’s productivity performance and proposal for 8M framework to raise productivity growth in the retail and F&B sectors	Introduction to 8M framework
3	Measurement and surveillance of productivity performance based on 8Ms — Application to Retail and F&B Sectors	Statistical application of 8M framework
4	Entrepreneurship, start-ups and productivity: Entrepreneurism in Singapore’s retail and F&B sectors	Management
5	Part-time workers’ productivity in the F&B sector	Manpower
6	Human capital issues in F&B and retail sectors in Singapore: engagement, retention and usage of mature workers	Manpower
7	Use of social media to raise productivity in the F&B sector	Message
8	Sufficiency of marketing efforts by Singapore SMEs in retail and F&B sectors	Message
9	Cost control and accounting practices: impact on and improvement of productivity in Singapore F&B enterprises	Money, Management
10	Conclusion	—

Chapter 3 reveals that the 8M framework has its antecedents in the Total Quality Management approach and the more recent Business Excellence Framework. The central message to companies is that the pursuit of productivity based on a single index can be fraught with difficulties and apparent contradictions in terms of measures to be taken. The 8M framework overcomes this by addressing multiple inputs and multiple outputs that are important for productivity improvement. The statistical application of the framework to the Retail and F&B sectors is elaborated in this chapter.

The next six chapters delve into specific aspects of the Ms. Management is covered in Chapters 4 and 9; Manpower, in Chapters 5 and 6; Message, in Chapters 7 and 8; and Money, in Chapter 9.

Chapter 4 addresses the issue of entrepreneurism in the F&B sector and examines whether it is a boon or a bane for productivity. The prevalence of casual entrepreneurism in the F&B sector is of concern. The reason is that it increases the demand for: (a) labor, thus raising labor cost; (b) shop spaces, leading to higher rental rates and (c) material inputs, leading to higher cost of production.

Chapter 5 deals with the employment of part-time workers in the F&B sector. Since companies in this sector perennially face the issue of manpower shortage, they could tap part-time workers to meet their manpower requirements. The challenge is to use the part-time workers productively and to reduce the high turnover rate of part-time workers. In this respect, there is much room for improvement in the F&B sector.

Another aspect of the augmentation of the manpower supply has to do with the employment of mature workers. This is addressed in Chapter 6. Mature workers offer the potential of a good source of supply of manpower. However, many companies in the Retail and F&B sectors have yet to establish appropriate human resource management practices and job-re-design programs to accommodate the employment of mature workers.

Chapter 7 investigates the use of social media in the F&B sector. Social media has the potential to transform traditional marketing and communication efforts. This is the case even in the F&B sector. However, many F&B companies are slow to embrace social media, and the level of sophistication in the use of social media is generally low.

The broader issue of marketing efforts of SMEs in the Retail and F&B sectors is discussed in Chapter 8. Market segmentation, innovative marketing and social media marketing are strategies that are useful for small businesses. Yet, many companies, especially the micro-businesses, have poor understanding of marketing and perform insufficient market research in the operation of their businesses.

Chapter 9 covers the important domain of cost control and accounting practices in the F&B sector. While a large majority of the companies do use accounting and financial data for decision-making purposes, the frequency of implementation is inadequate. Furthermore, many of them tend to adopt the simpler and traditional techniques. The lack of skilled manpower and resources is a key challenge faced in implementing cost control and management accounting techniques.

Drawing from all the findings, Chapter 10 concludes with a summary of the recommendations.

 

¹ For the purpose of this publication, the standard SSIC nomenclature of “Food & Beverage” is used although SPRING Singapore uses the term “Food Services.”

Chapter 2

Analysis of Singapore’s Productivity Performance and Proposal for 8M Framework to Raise Productivity Growth in the Retail and F&B Sectors

1. Introduction

1.1. Singapore’s open economy and consequent challenges

Singapore’s rapid growth from a modest trading post to a developed nation is one of the most notable stories of successful growth and development in the second half of the 20th century. The Singapore economy experienced one of the highest rates of growth in the world over the past three decades with Gross Domestic Product (GDP) appreciating at an annual rate of about 7.2% during the period 1970–2015. The result in turn propelled Singapore’s average real per capita income from US

512 in 1965 to US

53,322 by 2015, which surpassed...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• Preface
• About the Authors
• Acknowledgments
• Chapter 1 Introduction
• Chapter 2 Analysis of Singapore’s Productivity Performance and Proposal for 8M Framework to Raise Productivity Growth in the Retail and F&B Sectors
• Chapter 3 Measurement and Surveillance of Productivity Performance Based on 8Ms — Application to Retail and Food & Beverage Sectors
• Chapter 4 Entrepreneurship, Start-ups and Productivity: Entrepreneurism in Singapore’s Retail and Food & Beverage Sectors
• Chapter 5 Part-Time Workers’ Productivity in the Food & Beverage Sector
• Chapter 6 Human Capital Issues in F&B and Retail Sector in Singapore: Engagement, Retention and Usage of Mature Workers
• Chapter 7 Usage of Social Media to Raise Productivity in the Food & Beverage Sector
• Chapter 8 Suffiency of Marketing Efforts by Singapore SMEs in Retail and Food & Beverage Sectors
• Chapter 9 Cost Control and Accounting Practices: Impact on and Improvement of Productivity in Singapore Food & Beverage Enterprrises
• Chapter 10 Conclusion
• Index