Speeches and Presentations

SCED's speech at GS1 Hong Kong Supply Chain Management Excellence Summit 2012

Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the 12th GS1 Hong Kong Supply Chain Management Excellence Summit 2012 today (November 9):

Mr (Joseph) Phi, Ms (Anna) Lin, distinguished guests, ladies and gentlemen,

Good morning. It gives me great pleasure to join today's summit organised by GS1 Hong Kong. I would like to thank GS1 Hong Kong for its long-standing endeavour to promote technology adoption and knowledge sharing of supply chain management.

Nowadays, globalisation and rapid development of technology have crafted a new landscape for supply chain management, with more focus on value creation. We all face this challenge and hence today's theme, "Champion Business Success Through Value Creation", is most timely.

Riding on our geographical advantages, sophisticated infrastructure, multi-skilled talents and multicultural know-how, Hong Kong is one of the world's leading trade and logistics hub. Let the figures speak for us. Hong Kong ranked third (after Shanghai and Singapore) among the top 10 global container ports in 2011, with 24.4 million TEUs' throughput. In the first quarter of 2012, Hong Kong's total port cargo throughput amounted to 64.5 million tonnes. In 2011, port transshipment cargo movements took up 57.3 per cent of port cargo throughput. In particular, cargo movements between Hong Kong and the Mainland of China accounted for the largest share of 40.3 per cent. The voluminous transshipment cargo illustrates the competitive edge of Hong Kong in value creation for trading and logistics business activities.

Let me share with you three qualities of Hong Kong which enable us to create value for the trading and logistics industry. The qualities can be encapsulated by three letters - "S-C-M", same as the acronym for supply chain management. Here these three letters of our qualities mean smart use of technology, capability in R&D, and motivating innovations.

First, smart use of technology. Radio frequency identification (RFID), e-lock-based enabling technology and the global positioning system (GPS) are widely used in a smart way for tracking and customs clearance in the logistics industry. The smart use of technology brings convenience, security and visibility to the operations. Since November 2011, the Government has implemented the Road Cargo System and introduced the Intermodal Transshipment Facilitation Scheme for air-land and sea-land transshipment cargo movements. With the electronic consignment information and application of electronic lock and GPS technology, we create a simplified and efficient customs clearance process, thus resulting in a fast, secure and traceable logistics network. The clearance time can be shortened from two or three hours to within five minutes.

Let's look at another example: the airport's RFID baggage handling system, pioneered in the world by Hong Kong International Airport, generates 26 million RFID tags each year. It induces substantial savings by simplifying the operational procedure. Thus, adoption of smart and suitable technology enhances efficiency and reduces the chance of human errors.

Second, capability in R&D. As an international trading and logistics hub, Hong Kong has a strong and continuous demand for best-of-breed solutions to drive productivity, efficiency and reliability, which are fundamental for enhancing competitiveness. Hong Kong possesses world-class technological infrastructure and facilities to nurture R&D capability to meet this demand. The Hong Kong Applied Science and Technology Research Institute, the Cyberport, the Science Park and the Hong Kong R&D Centre for Logistics and Supply Chain Management Enabling Technologies (LSCM) are some of the prominent examples. Up to August this year, LSCM has approved 39 projects at a total project cost of HK$265 million, mostly contributed from Innovation and Technology Fund.

In recent years, the Guangdong and Hong Kong Special Administrative Region governments and LSCM have been co-operating in research into food tracing using RFID. This technology is also applied by the industry to track the source of vegetables and cold-chain foods supplied to Hong Kong. It can also be used in imported wine and Chinese wine exported via Hong Kong. These food and product monitoring and traceability applications will create value in ensuring food safety and traceability of origins of products.

Third, motivating innovations. The Government is committed to motivating innovations and promoting their wider adoption in the business sectors and community. Up to June this year, the Innovation and Technology Fund has provided financial support to over 2,890 innovative projects. One example is GS1 Hong Kong's ezTrack service, which is an online tracking platform to enhance supply chain visibility for global business. Furthermore, to promote ICT (information and communications technology) adoption among SMEs, the Sector-Specific Programme supported 16 ICT projects for 12 sectors or types of businesses between 2004 and 2012. In 2008, we sponsored GS1 Hong Kong to implement a project for the supply chain sector. It developed a platform to allow consumers to authenticate product validity via RFID and secure labels. In 2011, we further sponsored GS1 Hong Kong to develop an innovative solution called "Customer Connect" for the wholesale or retail sector. Through the use of a mobile application backed by a digital marketing platform and the use of two-dimension barcodes or QR codes, SMEs will be offered a new mobile channel to promote their products to customers. The project will be completed in the latter part of 2013.

In the face of a globally connected world, innovations serve to enhance the trade and logistics industry's quality, efficiency and reliability. In the face of a keen competitive business environment, innovations serve to create value, open up markets, enhance service levels and create an intelligent shopping experience. Entrenching the strengths of our trade and logistics industry is of utmost importance to Hong Kong's sustainable economic growth. The Government will continue to collaborate with the industry in seeking ways to create value, enhance performance and achieve success.

I would like to take this opportunity to congratulate in advance the winners of this year's Hong Kong RFID Awards, who have created innovative applications for the industry. We are happy to learn from their experiences and looking forward to their fruitful results. Lastly, I hope today's summit is a rewarding and valuable event for all.

Thank you.

Friday, November 9, 2012