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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Speeches

Speech by Director-General of Trade and Industry
Thursday, December 6, 2001

Following is the full text of the opening address delivered by Mr. Joshua Law, the Director-General of Trade and Industry at the HKQAA Symposium: Managing for Success today

Dr. Ng, friends of QAA, ladies and gentlemen,

I am delighted to be invited to speak at the opening of the first HKQAA Symposium. The theme "Managing for Success" is, to all of us, a timely reminder of the importance of quality management in an increasingly globalised and competitive economy.

2. Whether as a discipline, an academic research topic, a management approach or a management tool, quality management is a technical and professional subject which only quality management experts can master. But to a layman like me, the basic concept of "quality" is straightforward. Put simply, it is very much about consumers' perception and, above all, customer satisfaction. While not every customer has the expertise to tell how advanced its supplier is in terms of the quality management tools it deploys, or the level that supplier reaches in terms of performance in quality management, he can most probably tell with authority whether he is satisfied with the "quality" of the products he buys, or the services he receives.

3. And, I am afraid that it is the customers' perception about the quality of a product or service, and his decision on whether or not to buy it, that makes the product, the service, and ultimately the company that supplies it, a success or a failure. Therefore, a major challenge for quality management experts is to make use of their expertise and the available quality management tools to help enterprises in Hong Kong achieve total customer satisfaction. And, a major challenge for enterprises to remain competitive is to build success through quality management.

4. When we talk about quality management today, we are no longer talking simply about the outdated scenario when a company would designate a few staff as quality inspectors, to inspect and endorse products' quality before they are delivered to clients. While this physical inspection process remains an indispensable part of quality management, we all know that companies that are just concerned about the quality of their final products simply are not practising quality management, nor are they managing for success in any meaningful sense at all. Indeed, a "quality company" is distinguishable by an organizational culture that generates quality in all areas, from leadership and human resources development, to production process, technology application, R&D capabilities, innovativeness, supply chain management and customer relationship.

5. Given the challenges of globalisation and the emergence of a knowledge-based economy, it would seem difficult, if not impossible, for companies to remain competitive if they fail to re-engineer by giving emphasis to quick response, better quality, innovation, zero defects, and lower production costs. To do so demands the closest attention to quality from every employee at every level of a company, together with a clear vision for, and a total dedication to, continuous improvement. A company which does not place due emphasis on improving the overall quality of the company will soon find itself being overtaken by its competitors.

6. Throughout all these years, Hong Kong has built up a fine, hard earned reputation as a place that produces quality goods and delivers quality services. Our manufacturers, whether engaged in OEM, ODM or lately OBM, are renowned for their reputation as producers of high quality products, as well as reliable business partners who are committed to delivering in a timely manner. Manufacturing plants operated or managed by Hong Kong enterprises are renowned for their good management know-how and efficient production processes. Various quality management systems, such as 5S, six-sigma, Kaizen, and TQM, and international certification system, such as ISO9000 and 14000, have become a common feature for our manufacturing plants, which are found locally, in the Mainland and overseas. Likewise, many of our firms in the service sectors are ISO9000 certified. As at end of November this year, about 2,600 ISO9000 certificates have been awarded to companies in Hong Kong, a reflection of their high level of quality management.

7. However, this does not mean that we can be complacent. While most of the large enterprises in Hong Kong have established very strong quality management culture and efficient quality management system, many of our SMEs are still not fully aware of the importance of quality management. Many have yet to set up their own quality management system, or be certified for ISO9000. With keener competition arising from China's accession to the WTO, it is crucial that they are aware of the importance of quality management, make efforts to adopt it, and move up the quality echelon. Those which react positively to this call and move fast to enhance their overall quality will no doubt stand a higher chance of staying ahead than the others in the highly globalised economy.

8. The Government has been actively promoting quality management among the local business community. We set up the Hong Kong Quality Assurance Agency (HKQAA) in 1989 to assist industry and commerce to develop and practice quality management systems, at a time when the overall quality culture in our manufacturing and service industry was not yet very popular. We also set up the Hong Kong Awards for Industry and Hong Kong Awards for Services in 1989 and 1997 respectively to promote core competitiveness of quality enterprises.

9. Yet much more needs to be done. The Government will, of course, continue to help promote quality management esp. for SMEs. In this regard, I am pleased to note that the Government will launch in the near future an SME Development Fund, besides three other SME funding schemes. The SME Development Fund aims to help SMEs enhance their overall competitiveness by funding projects that are conducive to enhancing the competitiveness of SMEs in general, or SMEs in a specific sector. These projects may be proposed by non-profit-distributing industry support organizations and trade and industry associations. Given the importance of quality management to SMEs in all sectors, I would not be surprised if some of the funds under the SME Development Fund are allocated to projects that will help raise SMEs' awareness on quality management, such as ISO9000.

10. Today's Symposium has provided a very useful forum for key players in quality management, including quality management experts, industrialists, businessmen and industry support organizations to exchange views on this very important subject. I would like to take this opportunity to thank the HKQAA for organizing this very meaningful event and wish you all a fruitful and constructive discussion.

11. Thank you.