Updated 19 July 2020
When you chat with Elaine Heng, you forget that you’re chatting with the Retail Business CEO for FairPrice. She’s grounded and humble to a fault and her business savvy is only rivalled by her compassion for the elderly, the staff who work under her and the less fortunate.
For example, at the height of the Covid-19 pandemic, she and the team created a separate shopping hour exclusively for the older folks to get their shopping done without crowds. When a few people remarked that it might be better for the elderly to stay home instead, Heng listened and initiated FairPrice on Wheels to bring groceries closer to selected estates, making it more convenient for elderly residents to purchase their essentials.
The Peak chatted with Heng on the business and life lessons that FairPrice learned during the panic buying episodes and revealed the food security measures in place.
What policy and practical changes can be made to ensure that we are not scrambling the next time something like this happens?
At FairPrice, we have in place a pandemic readiness and action plan to ensure that the daily essential needs of the community are being provided for through existing stockpiles, an established network of suppliers and a robust supply chain infrastructure.
We maintain a stockpile of essential products to minimise disruption of supplies in the event of crisis. In recent months, we have increased our inventory holding for certain categories of products, such as high-demand items like rice, noodles and paper products. For example, we have a stockpile of more than three months’ worth of rice to ensure that they remain available for our customers.
We tapped on our existing diverse network of suppliers across 100 countries and were able to increase our procurement volume. For example, we increased vegetable supplies by 1.6 times, sourced from 18 countries; eggs were increased by about 1.5 times, sourced from eight countries; while noodles were increased by two times, sourced from 20 countries.
To improve scalability to cope with crisis situations, we have also expanded our warehouse capabilities by adding more warehousing facilities to support additional storage requirements.
What lessons did you learn from banking that you applied during this time?
Retail banking and supermarket retail share similar traits. Both have a multitude of products and services to offer, through multiple channels, to a wide range of customer segments. To thrive in either of these industries, customer-centricity is a key source of competitive advantage. Customer centricity is about putting customers in the centre of all that we do; understanding our customers deeply and translating these insights into actions to put one ahead of the game. This can be achieved through data analytics and modelling, a discipline I have learnt and honed from banking days which were applied and further developed in retail supermarket space. Data after all is the new oil!
In supermarket retail, given the nature of the business in everyday essentials, there is a greater velocity and richness of data which could provide deeper insights for us to understand our customers better so as to serve them better. During COVID-19 crisis, the deeper honing of data analytics was applied to further amplify our responses to the situation. For instance, dashboards were developed to monitor the near-real-time traffic, stock level at each of our stores, tracking of key fast moving products and its vibrancy so as to ensure better forecasting which then in turn facilitate in the upper stream sourcing of products (for us to lock products to ensure availability. Besides leveraging analytics internally, FairPrice was also the first supermarket that made available the real-time traffic information onto the URA SpaceOut website which allows customers to check the crowd level before going down to the stores.
What are the key lessons from Covid-19 for Singapore in terms of food security and self sustainability?
Today, we source from over 100 countries around the world and are constantly looking to strengthen and widen our network of suppliers to avoid over-reliance on a selected pool of sources. For example, we carry eggs from multiple countries including Malaysia, Australia, New Zealand, South Korea as well as from local farms in Singapore. Over this crisis period, we have added Spain, Ukraine and Poland as additional sources for eggs. This robust network of supplies arms us with the ability to better manage the rapidly evolving crisis that we face, where we are able to draw on existing suppliers and where possible, ramp up existing supplies.
Beyond diversification, we also recognise the need to enhance local production to be more self-reliant. We currently carry about 6,500 locally made products and have been supporting local production in multiple ways. This includes organising local fairs to promote local food, and providing business development support through the SME Supplier Support and Development Programme (SSDP). We will be looking to ramp up our support for locally made food, in support of the government’s “30 by 30” goal to meet 30 per cent of Singapore’s nutritional needs by 2030.
We also relooked every single step of the value chain to enhance speed and capacity, from logistics to re-shelving our stores. We did all this while working with producers and suppliers to ensure a rapid response time and long-term sustainability of the supply chain.
How are you ensuring that you are maintaining sustainability measures at your organisations during this time?
Sustainability has many facets, but some of the critical actions are in reducing food waste by setting and aligning stricter guidelines and specifications upstream, not only with our suppliers but at the farm level. Downstream, we continue to invest in our analytics capabilities to increase accuracy and responsiveness in forecasting and replenishing goods. We also upgraded our warehousing and distribution systems to increase speed of fulfilment while reducing over-stocking and under-stocking of goods. These efforts culminate in reducing food waste by minimizing spoilage and ensuring freshness for customers.
Beyond this, we are refining our sustainability materiality assessment, which involves mapping out priorities, targets and actions plans. Some areas we are looking at include primary and secondary packaging of goods to assess ways to reduce, reuse and recycle where possible.
How are you partnering with local SMEs to bridge gaps you are facing, while providing local economy growth?
As a homegrown retailer, NTUC FairPrice has been supportive of locally made products and local produce. Currently, FairPrice carries over 6,500 locally-made products ranging from vegetables, fish and eggs to canned food, condiments and household cleaners. Buying locally further supports national efforts to bolster our food security by enhancing our ability to produce our own food.
We have partnered our local food authority over the years, and will continue to do so, to promote local produce by raising awareness and rallying support for locally produced and locally farmed food. For example, we have organised various local fairs like “Made in Singapore” and “Best of Singapore Flavours” fairs to promote locally made products and local producers.
Apart from this, to support local Small and Medium Enterprises (SME), FairPrice introduced the SME Suppliers Support and Development Programme (SSDP) in 2009, which is designed to enhance business capabilities and ease business challenges such as cash flow. In 2019 alone, FairPrice invested S$1.32 million in the SSDP to benefit 420 SME suppliers.
Looking ahead, we will continue to ramp up our support for locally made food, in support of the national “30 by 30” goal to meet 30 per cent of Singapore’s nutritional needs by 2030.
The Peak recently collaborated with World Food Future on TableTalks, a series of virtual fireside chats involving CEOs and business leaders in F&B-related industries. Heng was one of the three panellists on the second edition of TableTalks, with the other two being Richard Ruddy, the Chief Retail Officer and Head of Grocery for Lazada, and Nichol Ng, the managing director of FoodXervices Inc. You can watch the hour-long session below.