Phoon Huat goes digital: Taking a beloved Singapore brand into the future

BRANDED CONTENT | Published 22 Nov 2021 | The Straits Times

Phoon Huat chief financial officer Mr Lee Tjen Chew says digital transformation for SMEs is best done in “bite-sized pieces” and developed iteratively to be less disruptive. PHOTO: KOH MINGGUANG

Making changes in “bite-sized pieces” – the company’s CFO shares recipe to the food product supplier’s digital transformation

Phoon Huat is no stranger to Singaporeans, particularly during the baking frenzy that gripped the island last year during the circuit breaker. Behind its 20-and-counting brick-and-mortar outlets, however, is a team that’s committed to digital transformation – one initiative at a time. 

“Our objective is to integrate digital tools into all areas of business operations, while concurrently improving digital literacy across the company,” says Phoon Huat’s chief financial officer (CFO) Mr Lee Tjen Chew, 45, of the company’s digital transformation strategy.

Mr Lee, who is currently double-hatting as the company’s chief information officer, shares: “I don’t think we had doubts about going digital. But we had doubts about whether we were capable enough, and how we would go about doing that. If you asked me whether we had the necessary skill sets back then, I would have said ‘no’. This was something we actively worked to build.”

And build they did – together with a task force of employees who saw to the implementation of various digital initiatives, including a handheld mobile scanning system developed to replace the pen-and-paper processes previously used in the warehouse. 

Project manager Nicholas Yeo, 32, recounts how he took pains to speak with warehouse employees about adopting the scanning system. He recalls: “They kept arguing, saying ‘I have been doing it with a pen and paper and it is fast and accurate’. So I told them, ‘Why don’t we have a competition? You do it your way, and I do it mine, and we see who can complete the task quicker.’”

Needless to say, Mr Yeo won – not only the challenge, but also the hearts and minds of the workers that day. “People don’t want to listen to your theories; they just want to see results,” he says. “We try to be accepting of every worker, to hear them out. And when it comes to new systems, we will give them time to learn.”

One of the people in CFO Mr Lee Tjen Chew’s transformation task force is project manager Mr Nicholas Yeo, who had to convince warehouse staff to adopt a new digital scanning system to replace pen-and-paper processes. PHOTO: KOH MINGGUANG

As for results, any lingering doubts about how far Phoon Huat has come in terms of digital transformation were squashed during the circuit breaker last year. Key digital capabilities that were deployed over the years, including support for VPN connectivity, IP telephony, and laptops for employees, enabled the company to quickly pivot backend operations to work from home without trouble.

Stepping boldly into the future

While the firm had first dabbled in the online world in 2018, it only launched a full-fledged e-commerce store under the RedManShop.com brand in 2020. Since then, its digital transformation efforts have picked up in scale and complexity, ranging from modernising its warehouse to developing mobile apps to empower its sales force, and the automation of routine administrative tasks across the organisation. Mr Lee maintains that digital transformation is an attainable goal for all SMEs, provided they keep an open mind and are willing to take the first step. 

One key step Phoon Huat took in its quest to transform was to participate in the Singapore Business Federation’s Industry 4.0 Human Capital Initiative (IHCI) programme, which aims to equip companies with people management and job redesign skills required for successful Industry 4.0 transformation.

Phoon Huat continues to look at ways to automate and digitalise for optimal production. This includes the use of automatic bottling (above) and packaging machines. PHOTO: KOH MINGGUANG

The programme provided Phoon Huat with a low-risk environment and expert advice from McKinsey & Company, and afforded the company the opportunity to review business processes and production issues, so it could map out its processes and introduce new best practices.

The IHCI programme helped identify problems such as machine maintenance and availability, which were cutting into valuable production time. After minor changes were implemented, the company’s overall production rose by 12 per cent.

Programmes such as IHCI are part of JTC’s Industry Connect initiative, launched last year to help businesses across its estates grow through technology adoption, while enhancing talent development and environmental sustainability. With over 14,000 customers, JTC can effectively promote business transformation to these companies by connecting them to solutions providers, trade associations, and government agencies.

Never stop learning and improving

External expertise aside, Mr Lee’s belief in lifelong learning means he actively encourages employees to explore new business ideas or acquire new skills for themselves. Mr Lee, who constantly seeks self-improvement through books and Youtube tutorials, encourages staff to attend industry events or webinars – even during office hours – and gives them the leeway to implement new ideas.

Business analyst Lee Yi Sam, 31, attended an event in 2019, organised by the Singapore Computer Society, where speakers shared how they tracked global sentiments through online news channels and social media. 

He shares: “If there’s an upcoming new trend that is going viral on TikTok or another social media platform, it would be useful if we spot it early. Because once people want a particular item and demand surges, it means the stocks in individual stores will run out quickly. Knowing early can greatly benefit our inventory management and material resource planning.”

Senior software engineer Ilmi Wahab, 31, also benefited from the company’s culture of continual learning. He worked on Phoon Huat’s e-commerce website to build new applications for the SAP backend, despite not having experience with such systems before joining the firm. He also built an e-commerce packing module that substantially improved day-to-day operations. 

Digital transformation is not a singular project you can complete but is a process of continuous refinement. There will always be things that you need to improve.

MR LEE TJEN CHEW, Chief financial officer, Phoon Huat

Mr Ilmi credits his successes to the “very patient and trusting” environment at Phoon Huat. He says: “Phoon Huat has given me a chance to take on a bigger role, encouraging and allowing me to test new applications in a sandbox environment before deploying them on the production server.”

Kickstarting a cycle of improvement

With all that said, digital transformation does not happen overnight. For SMEs mulling over jumping straight into the deep end, CFO Mr Lee cautions that digital transformation and digital literacy efforts should be done in small steps. Changing everything at one go can be highly disruptive, and he advises businesses to make changes in “bite-sized pieces”.

“We would often start with one feature and roll it out. Our users or the management would come back with additional feature requests, which we will then implement. Because it’s developed iteratively, a bit at a time, it is not overwhelming and far more digestible.”

And while it might appear to start out slow, Phoon Huat’s experience shows that the pace of improvement does gather momentum over time. And while resistance is expected from certain quarters, there are also employees who step forward with ideas and suggestions.

Mr Ilmi shares: “When I first joined, requests for new features were few and far between, as they were outsourced and that took a long time. With the ability to make changes in-house, employees are now more vocal about the things they want to change. I am happy when they come forward with ideas. They are now empowered to suggest changes and improve their workflows.”

Since having the ability to implement technical changes in-house, senior software engineer Mr Ilmi Wahab says colleagues are now more “empowered to suggest changes and improve their workflows”. PHOTO: KOH MINGGUANG

On the digital transformation journey at Phoon Huat, CFO Mr Lee says: “Digital transformation is not a singular project you can complete but is a process of continuous refinement. There will always be things that you need to improve. The pace of digital transformation is picking up, and the pace is much, much faster today than it used to be.

“I think you will always have feedback for improvements if you are willing to listen. Moreover, the business will continue to evolve and grow, potentially into new areas. The technology will continue to advance, too, which means that some processes might need to change, and new technology adopted.”

Link to Article: https://www.straitstimes.com/business/companies-markets/digital-food-supplier-made-in-singapore-phoon-huat-jtc-industry-connect

Singapore’s Phoon Huat ups its eCommerce gameplay

3 Aug | Future CFO Editor

In 2018 brick and mortar retailer Phoon Huat opened its doors to the online world. Eventually, the company solidified its commitment to online commerce with the launch of RedManShop.com in early 2020 in a bid to make baking supplies more accessible to customers during the lockdown.

At the time, the existing platform provided mostly basic functionality for e-commerce like creating accounts and making orders.

Lee Shing Lam, Head of eCommerce at Phoon Huat, noted that customers commented that the search function and the limitation in merchandising functions made it very difficult for them to find products that they want.

The challenge(s)

Lee noted that one challenge was how to manage the product range the company was carrying online.

“This led us to look for a scalable and sustainable platform to support its expansion. At the same time, we also sought to improve the services and customer experience on its online store,” he added.

With MuleSoft integrating with Phoon Huat’s core ERP solution – SAP, it allows products and product information to flow seamlessly into Salesforce Commerce Cloud. The process empowers its employees to integrate data and innovate at scale.

“It allows us a high degree of freedom to perform merchandising through sorting rule, search refinement and categorisation. In addition, we utilised Search Dictionary and Bucket Values to maximise the searchability of our products,” added Lee.

A better way to engage customers

To maintain customer trust and satisfaction, Phoon Huat selected Salesforce Service Cloud to help its customer service team with a new, digitised omnichannel approach to engage with its customers as it expands the business across the SEA region.

Phoon Huat used MuleSoft to create a seamless experience across its eCommerce platform. With MuleSoft, Phoon Huat can easily integrate and unify data across its entire eCommerce experience, including RedManShop customers, while empowering its employees to integrate data and innovate at scale.

Phoon Huat CEO Shuichi Sato reiterated the company’s commitment to delivering a better online shopping experience for its customers. In addition to investing in a new software platform, the company has expanded its digital transformation team, improved warehouse layout and procedures, and invested in its logistics fleet.

For Phoon Huat these enhancements include:

  • A search engine that allows customers to search for products faster & easier
  • Mobile-friendly user interface
  • Personalised shopping experiences, enabled with machine learning capabilities
  • Delivery tracking through email and order status updates via the website.

Cecily Ng, AVP and GM of Salesforce Singapore, says companies like Phoon Huat are using the pandemic as an opportunity to reinvent themselves and capture more customers.

Link to Article: https://futurecio.tech/singapores-phoon-huat-ups-its-ecommerce-gameplay/

How the Red Man heeded the green light to dish out better CX

27 July | DigiconAsia Editors

With many locked-down families turning to bakery, this traditional bricks-and-mortar firm jumped to the Cloud to ensure supply lines remained intact.

How does a regional supplier and retailer of cookery supplies weather a global pandemic when its bricks-and-mortar sales have been its main mode of business?

The well-known answer is of course: digital transformation. This is what Phoon Huat, a baking ingredients and equipment supplier in South-east Asia, did in early 2020.

Amid the pandemic, the firm accelerated the launch of its online shop in order to allow customers to continue to access baking and cookery supplies during the numerous stages of lockdown.

With an offering of more than 7,500 products ranging from bakery supplies to international gourmet brands, the firm pivoted to e-commerce with an aim to differentiate itself with affordable pricing and its own exclusive house brand RedMan. Its earlier website, built in 2018, was not geared for the scale of the pivot, so some digital transformation was in order.

Selling in the Cloud

Recognizing the need for a scalable and sustainable platform to support its pivoting and expansion, the firm chose to work with Salesforce to relaunch its RedManShop e-commerce website.

By doing so, the firm has empowered its employees to deliver an end-to-end digital customer journey across sales and customer support. Cookery enthusiasts of all levels of skill can now expect a one-stop solution for not only merchandise, but also a menu of related content such as recipes, training courses and an improved shopping experience that includes:

  • A search engine that to scour the large product range and content faster and easier
  • A mobile friendly user interface
  • Personalized shopping experience powered by machine learning
  • Item delivery tracking through email and order-status updates via the website

With a wider outreach due to its enhanced e-commerce presence in the region, the firm also used Salesforce to create a digital omni-channel approach to boost customer engagement. To improve data connectivity across its disparate branch offices and applications, MuleSoft was engaged to create a seamless experience across its e-commerce platform and empowering employees to integrate data and innovate at scale.

Said Shuichi Sato, CEO, Phoon Huat Pte Ltd: “We are committed to delivering a better online shopping experience for our customers. Besides investing in a new software platform, we have also expanded our digital transformation team, improved our warehouse layout and procedures, and invested in our logistics fleet.”

Cecily Ng, AVP and GM, Salesforce Singapore, said: “The pandemic has presented businesses such as Phoon Huat with the opportunity to reinvent themselves and capture more customers — a great example of technology’s transformational power, beyond helping businesses to cope with the challenges of the COVID-19 pandemic.”

Link to Article: https://digiconasia.net/news/how-the-red-man-heeded-the-green-light-to-dish-out-better-cx

Phoon Huat wants to fill the digital vacancy by training employees

ZaoBao | 9 Jul 2021

Bakery speciality Phoon Huat is striving to undergo digital transformation. The company will assess the skills of employees, gradually encourage them to receive appropriate training, strengthen their capabilities, and meet the needs of the company.

At the forum yesterday, Ms Gan discussed how to promote skills training with industry representatives such as Microsoft, Grab, and Phoon Huat.

Among them, James Wong, executive director of Phoon Huat, said that the pandemic has promoted the company’s acceleration of digitalization. The company is exploring how to fill the vacancies in the digitalization process by training the skills of employees, such as talents who are familiar with the company’s products and online marketing.

He believes that it is important to encourage older employees to receive training and communicate with them. It is necessary to understand the views of older employees so that they can embrace the training with a positive attitude and be willing to participate.

As for whether the employer is worried about employees leaving after training, James Wong said: “Although there will be concerns, we cannot be affected by these concerns and provide no training for our staff.  Training can increase productivity and allow them to do more, and the company should also give rewards and promotion opportunities.  When employees see opportunities to receive training and have a clear career plan, I believe they will be more inclined to stay with the company.”

Link to Article: Original Text in Mandarin

Phoon Huat and Le Petit Depot form a strategic partnership

7 June 2021, Singapore

Offering more varieties via online & more quality European food products to customers

7 June 2021 — Phoon Huat Group Pte. Ltd. and Le Petit Depot Pte. Ltd., Singapore’s leading online retail platform specialized in the sale of European food products, are proud to announce the formation of a strategic partnership.

Driven by their passion for quality food and cooking & baking products, Phoon Huat and Le Petit Depot join forces to offer a better value proposition to their customers. This alliance will enable both businesses to leverage on each other’s strengths to grow their online businesses and to extend product range in the retail stores under Phoon Huat.

Looking forward to doubling both business’ sales volume in three years’ time, this strategic alliance enables Phoon Huat to enrich its current product range to include the slew of European products for their customers in the F&B industry, their 19 retail stores and online shopping website. Le Petit Depot will be able to leverage on Phoon Huat’s specialty products and global sourcing to offer their online customers baking ingredients and tools, more products from different parts of the world.

More importantly, both companies are working towards achieving fulfillment excellence through the reduction of supply chain costs, from importation logistics to the last-mile delivery. IT infrastructure optimization is another advantage for the two businesses. To achieve efficiency is critical especially in the current environment where all costs are on an increasing trend.

Sato Shuichi, CEO of Phoon Huat, said: “With the outstanding e-commerce and technology platform of Le Petit Depot and Phoon Huat’s strong foundation as a leading food products supplier, we will be in a unique position to capture strong growth in the market and better our service to our customers in F&B industry and baking enthusiasts.”

Yannick Guédon, Co-Founder of Le Petit Depot, said: “Le Petit Depot has developed a strong expertise as an online retailer of European products, and we are very excited that our products can reach a larger population through Phoon Huat’s complementary sales channels.

Having access to the large and competitive product offering built by Phoon Huat over the years will also enable Le Petit Depot to propose an unmatched product range for home cooking & baking.”

Frederic Douvillé, Co-Founder of Le Petit Depot, said: “Our vision since 2012 has always been to help make the life of our customers a little better and easier; we are proud and happy, as a young pure online player, to join our passion to the experience of Phoon Huat, who has been delighting customers since 1947.

This strategic alliance will help us to be even more dedicated to offering the best to our customers, by improving our overall logistics efficiency and service quality. We are more impatient than ever to continue bringing the best to our beloved customers!”

– END –

Link to Press Release: https://www.phoonhuat.com/wp-content/uploads/2021/06/2021-Jun-7-Press-release-Phoon-Huat-x-Le-Petit-Depot-Strategic-Partnership.pdf

Phoon Huat buys majority stake in French foods retailer (updated)

Business Times | 8 Jun 2021 | Lynette Tan

BAKING supplies retailer Phoon Huat has acquired a majority stake in Le Petit Depot, a Singapore-based online retailer that specialises in French food products.

Phoon Huat now holds 91.5 per cent interest – made up of ordinary and preference shares – in Le Petit Depot, according to corporate records. The remaining shares are held by Le Petit Depot’s founders, Frenchmen Yannick Guédon and Frédéric Douvillé, and a holding firm, Oper8.

However, Phoon Huat told The Business Times (BT) that the preference shares will be considered “quasi debt”, so its stake in Le Petit Depot is essentially 70 per cent.

“The idea is not to give the money to the founders, but to put it into growing the company,” said Phoon Huat chief executive Shuichi Sato. He added that Le Petit Depot’s management will stay unchanged, and that its founders remain “meaningful shareholders in the business”.

Le Petit Depot has paid-up capital totalling S$3.5 million, the records show. The company was started in 2012 and now retails more than 8,000 products, from meats to wine.

In a joint statement on Monday, both businesses said the deal will allow them to “leverage each other’s strengths to grow their online businesses and extend the product range in retail stores under Phoon Huat”. This is as Phoon Huat and Le Petit Depot aim to double their sales volumes in three years.

Both companies will also work on reducing supply chain costs and optimising IT infrastructure. “To achieve efficiency is critical especially in the current environment where all costs are on an increasing trend,” they said.

For instance, a “significant” portion of Phoon Huat’s goods come from France, Mr Sato noted. Consolidating logistics with Le Petit Depot will therefore lead to greater economies of scale.

Phoon Huat hit S$100 million in revenue last year, propped up by a home-baking frenzy amid the Covid-19 pandemic.

But the company had little idea how the year would turn out, as the pandemic situation was fluid, Mr Sato told BT in February.

“It was difficult to have any expectation or prediction (during this period). We worked to handle the changing needs of our customers that were affected by the evolving Covid-19 situation,” he had said.

Phoon Huat currently has 19 retail stores in Singapore and an online shopping site.

Link to article (for BT Subscribers): https://www.businesstimes.com.sg/sme/phoon-huat-buys-majority-stake-in-french-foods-retailer

Phoon Huat to open more stores this year; on the lookout for deals

Business Times | 8 Jun 2021 | Lynette Tan

PHOON Huat plans to open three more stores in Singapore this year, taking the tally to 22 stores, from 19 currently.

It is also on the lookout for opportunities to acquire, said Shuichi Sato, chief executive of the home-grown baking supplies retailer, in an interview with The Business Times on the back of Phoon Huat’s acquisition of a majority stake in French goods retailer Le Petit Depot.

But Mr Sato added that Phoon Huat remains a “small and humble” company: “We do not jump into big, fancy deals.”

“Regarding Le Petit Depot, it is a humble and stable, yet ambitious, company with whom we share chemistry,” he said.

Phoon Huat also intends to remain a speciality retailer. “We specialise in baking products, just like how Le Petit Depot specialises in French products. We will not try to become a big supermarket,” Mr Sato said.

The company has plans to expand overseas as well. This year, Phoon Huat resumed talks with potential partners about expanding into South-east Asian countries. The discussions had been put on hold due to the Covid-19 pandemic.

However, discussions are taking more time than expected, due to travel restrictions and some of the potential partners being focused on navigating the Covid-19 situation, Mr Sato said.

Overall, Phoon Huat is on track to hit US$100 million in revenue for its current financial year ending June. It crossed S$100 million in revenue in 2017.

Corporate records show Phoon Huat Pte Ltd has S$87.1 million in paid-up capital.

The 74-year-old company has come a long way since its beginnings as a shop along Middle Road by Hainanese entrepreneur Wong Tai Fuang. Its website states that the founder made deliveries himself on his bicycle in the early days.

Phoon Huat started out as a wholesale supplier of baking ingredients, but has also grown into a retail chain over the years.

In 2002, it started retailing in supermarkets, invited by NTUC FairPrice, according to its website. That year, the company also set up its headquarters at Pandan Loop.

Phoon Huat’s success later caught the attention of Standard Chartered Private Equity, which took a “significant stake” in the company in 2016, reportedly for US$112 million to US$150 million. Then, Phoon Huat had about a dozen retail outlets in Singapore.

Wong Chen Liong, a descendant of the founder and the then-managing director of Phoon Huat, had welcomed the investment, saying it boded well for the firm’s succession planning which had been in the works for the last five years.

Standard Chartered’s private equity unit has since been wound up.

Members of the Wong family that are involved in the business include James Wong, the founder’s grandson and an executive director at Phoon Huat, and Jean Wong, a business development director at the firm.

Mr Sato, who has worked at commodities firms Wilmar and Bunge, joined Phoon Huat in 2018 as chief executive.

Link to Article (for BT subscribers): https://www.businesstimes.com.sg/sme/phoon-huat-to-open-more-stores-this-year-on-the-lookout-for-deals

Phoon Huat buys majority stake in French foods retailer

Business Times | 8 Jun 2021 | Lynette Tan

BAKING suppliers retailer Phoon Huat has acquired a majority stake in Le Petit Depot, a Singapore-based online retailer that specialises in French food products.

Phoon Huat now holds 91.5 per cent interest in Le Petit Deport, according to corporate records The remaining shares are help by Le Petit Depot’s founders, Frenchmen Yannick Guédon and Frédéric Douvillé and a holding firm, Oper8. Phoon Huat declined to comment on details of the deal.

Let Petit Depot has paid-up capital totalling S$3.5 million, the records show. The company was started in 2021 and now retails more than 8,000 products, from meats to wine.

In a join statement on Monday, both businesses said the deal will allow them to “leverage each other’s strengths to grow their online businesses and extend the product range in retail stores under Phoon Huat”. This is as Phoon Huat and Le Petit Depot aim to double their sales volumes in three years.

Both companies will also work on reducing supply chain costs and optimising IT infrastructure. “To achieve efficiency is critical especially in the current environment where al costs are on an increasing trend,” they said.

Added Phoon Huat chief executive Shuichi Sato: “With the outstanding e-commerce and technology of Le Petit Depot and Phoon Huat’s strong foundation as a leading food products supplier, we will be in a unique position to capture strong growth in the market and better our service to our customers in the F&B (food and beverage) industry and baking enthusiasts.”

Phoon Huat hit S$100 million in revenue last year, popped up by a home-baking frenzy amid the Covid-19 pandemic.

But the company had little idea how the year would turn out, as the pandemic situation was fluid, Mr Sato told The Business Times in February.

“It was difficult to have any expectation or prediction (during this period). We worked to handle the changing needs of our customers that were affected by the evolving Covid-19 situation,” he had said.

Phoon Huat currently has 19 retail stores in Singapore and an online shopping site.

Link to article: https://www.phoonhuat.com/wp-content/uploads/2021/06/BT-8-Jun-2021.jpg

Phoon Huat: Riding a pandemic-fuelled baking frenzy

Business Times | 11 Feb 2021 | Lelia Lai

“LOCKDOWN baking” took the world by storm in 2020, and Singapore was no exception. “Circuit bakers” snapped up ingredients such as flour, sugar and vanilla from grocery stores and Phoon Huat outlets.

Because the baking supplier normally transacts in the B2B space, Phoon Huat came up against a shortage of retail-sized products for its new customers – even though it had the ingredients on hand, and available from its direct suppliers in larger quantities.

“We tried our best to produce the retail packs at our factory. Our suppliers cooperated, converted their packing size and supplied those to us,” said chief executive Shuichi Sato. “When our customers returned to our shops after a few days, they managed to get the items in most instances.”

Some of the measures Phoon Huat implemented to ensure safety at its stores included shorter operating hours, no cross-deploying of staff, limited shopping time and queue management systems. In addition, it set up an online store and started offering online baking classes.

Phoon Huat successfully kept its doors open and achieved its target of about S$100 million in revenue in 2020, but Mr Sato said the company had little idea how the year would turn out, as the pandemic situation was fluid.

“It was difficult to have any expectation or prediction (during this period). We worked to handle the changing needs of our customers that were affected by the evolving Covid-19 situation.”

The pandemic gave Phoon Huat the push it needed to transform digitally. It is now seeking external support to further improve its digital capabilities.

Mr Sato said he hopes to continue working closely with the food-and-beverage firms that have been its long-time customers, while leveraging the economies of scale they provide to bring more competitively priced products to its retail customers.

Link to article: https://www.phoonhuat.com/wp-content/uploads/2021/02/210211-Business-Times-Phoon-Huat_Riding-a-pandemic-fuelled-baking-frenzy.pdf

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