QIOPTIQ: We Can Be "Cheaper, Better, Faster" Too
4 January 2010
MEDIA RELEASE
1 The Labour Movement has done well in helping workers defend against the recession in 2009. As the Singapore economy works towards recovery, businesses need to build new and better capabilities in a new economic order. Thus, the Labour Movement is gearing to embark on the ‘offensive’ strategy, calling for a “cheaper, better, faster” (CBF) approach to pave the way for a sustainable economic recovery. Qioptiq Singapore Pte Ltd, a unionised manufacturing company which produces precision optical components and opto-mechanical assemblies for defense, medical and commercial applications, is one such company who has become “cheaper" through higher productivity, "better" with new capabilities, and "faster" by being more flexible.
How is Qioptiq Cheaper, Better and Faster
2 In exploiting new technologies to create more effective work processes, Qioptiq has become “cheaper” by achieving a quantum leap in productivity. It has also become “better” by broadening its capabilities to capture higher-value businesses. For example, its venture in the Ion Beam Sputtering (IBS) coating machine makes it the first in its industry in Singapore to utilise such technology to manufacture high quality fluorescent filters. Lastly, it has become “faster” by building up an adaptable workforce through up-skilling and multi-skilling. 3 Despite the start of the downturn in 2007, it had begun rolling out a series of automation exercises on a wide-scale to simplify its job processes. At the same time, the automation reduced labour intensity and increased machine utilisation. Automation has been done in three areas of the production of optical lenses – the grinding process, centering process, and the ultrasonic cleaning process.
4 For example, in the grinding process to generate the surface of optical lenses, the new machine has been equipped with an automated loading and unloading function to reduce the effort and time taken, as opposed to manual execution. This eliminates idle time, resulting in a shorter cycle time from two minutes to one minute. This efficiency also allows a worker to man six machines instead of four machines. In addition, full capacity utilisation is achieved when machines continue to run without supervision during break times, enabling the average output per machine to increase from 240 pieces to 480 pieces for one work shift. As a result, it is “cheaper” as productivity per worker has increased tremendously for this process. This is a good illustration of how a company keeps competitive by doing more with the same number of workforce, instead of doing the same with lesser workers.
5 Another good example is the centering process of optical lenses, which is the accurate alignment of two lens surfaces to ensure good optical performance. To create a more competitive and “better” workforce, the technicians’ skills are upgraded to set up and manage more sophisticated machines, allowing them to attend to more machines at the same time. As such, manpower efficiency is enhanced by 50%. Together with automation, the improved precision helps achieve higher consistency in lens quality.
6 Lastly, 434 (79%) of their production workers are multi-skilled so that they can quickly fill production gaps as demand changes, making them “faster”. In fact, Qioptiq has a structured skills-matrix which identifies the relevant skill set a worker needs in order to maximise the allocation of resources so that he can perform more than one function when necessary. Typically, a production worker is trained with three types of skills. This not only increases their overall work competency, but also makes the workforce nimble and adaptable.
7 Apart from enhancing their skills level, the production workforce is rewarded during their performance appraisal based on the number of skills accumulated and their proficiency level in the skills-matrix. Every two months, the rank and file and executive level workforce are also entitled a productivity bonus of one week’s salary if the company achieves its sales target. This way, the fruits of their labour due to productivity are also shared with the workers.
8 The President of the Singapore Industrial and Services Employees’ Union (SISEU) Mr Tan Peng Heng said, "I have been with Qioptiq for 28 years and they have groomed me and many others to be managers here. For myself, I joined the company in 1979 as an apprentice and was given valuable opportunities to grow throughout my career. The company values experienced employees as it takes time to train up their knowledge and expertise in our industry. During difficult times where workers value their jobs most, Qioptiq had committed to not cutting our wages and refrained from any retrenchments. As we head towards an economy recovery, I am confident that the company's investments in automation will bring positive returns, which will eventually be shared amongst workers when the upturn arrives."
9 On the company level, the CBF strategy has worked well for them. In particular, the revenue from the automated high volume line has increased by an average of 70% per annum and unit production cost in general has gone down by an average 14% over the last two years. For Qioptiq’s customers, this gives them the assurance of consistently high quality products, and a greater confidence in Qioptiq to handle high order volumes due to their flexibility.
10 Even as Qioptiq achieves productivity growth, it still values an inclusive workforce. It is the first company in SISEU to have been elevated from Level 2 to Level 4 (highest tier of commitment) of NTUC’s re-employment framework for older workers. The automation has resulted in more user-friendly features and operations are physically less taxing for older workers. Since 2008, Qioptiq also engages mature workers at age 59 to prepare them for re-employment through pre-retirement counseling. This is done 2 ½ years before the official retirement age of 62, way in advance of the one year recommendation by the tripartite guidelines of re-employment practices.
11 Currently, the oldest worker is 65 year-old Ramesh Prakash Sharma who rendered 21 years of service. His job as a line leader was re-designed to a technical mentor. With their vast knowledge and experience, technical mentors participate in problem-solving and improve work methods, which help Qioptiq to run “faster” than their competitors. As Qioptiq is already on a performance-based wage system, Ramesh did not receive a salary cut upon re-employment.
12 Qioptiq’s Managing Director, Mr Chua Teow Tzing said, “Our effort and achievement to be Cheaper, Better, Faster has strengthened our competitive position to be a World Class optics solution provider. More importantly, this mind-set adoption lays a solid foundation to build a dedicated, innovative and competitive team for future challenges.”
13 NTUC Assistant Secretary-General Josephine Teo, who is also the executive secretary of SISEU expects more companies to prepare themselves for the twin challenges of business growth and intensified competition as the economy recovers. She said, "Qioptiq is a good example of how companies can meet these twin challenges with a CBF strategy. They have shown clearly that CBF is not about cutting headcounts or workers' wages, or making them work under unreasonable conditions. Instead, it is about increasing their productivity so that each employee can contribute to higher output and better quality. In doing so, the company not only improves competitiveness, it can better manage manpower pressures due to higher business volumes. Coupled with their efforts to enhance capabilities and improve workforce flexibility, the company is well poised to achieve sustainable growth."
14 On Qioptiq's productivity bonus, Mrs Teo said, 'It is a smart and meaningful way to reward workers for their contributions to business performance. It also helps the company retain talents to fuel future growth. Our key message to all companies is that a CBF strategy together with productivity-driven rewards will enable companies and workers to prosper together. We hope more companies will adopt the same CBF approach so that both the Singapore economy and workers can enjoy sustainable growth."
15 Looking forward, Qioptiq will continue to be “CBF” and engage in process improvement methods for 2010. For example, it is exploring to reduce the set up time for its centering process, which will result in estimated savings of $120,000 for this year if successful. NTUC and its affiliated unions will also work towards encouraging all unionised companies to adopt the “cheaper, better, faster” strategy powered by an all C.A.N. workforce - all Collars, all Ages, and all Nationalities. This will not only complement their recovery efforts but also allow them to stay ahead of the global competition.
