Trendspotting – The Digital Supply Chain of Tomorrow

Yvonne Chan: Welcome to futurepulse, a podcast series brought to you by IPI, your innovation partner for impact. Together, we will explore how ideas, creativity and collaboration drive impactful innovation.

Welcome to this episode of futurepulse, we're going to spot trends and unscramble signals in the digital supply chain of tomorrow. I'm Yvonne Chan, and I'm joined by Susana Utama, a Partner at EY-Parthenon and Paul Lim, Founder and President of Supply Chain Asia.

Emerging technologies, such as cloud computing and advanced big data analytics, continue to disrupt the supply chain management. That, on top of coping with the challenges that the pandemic has brought about. Companies are also grappling with talent sourcing, while learning to pivot to an innovative culture.

What are some of the top trends in the digital supply chain sector and what best practices should leaders take note of? Well, I'm in very good company today with Susana and Paul, and I'd like to kickstart this discussion with first their definition of a digital supply chain. Susana?

Susana Utama: Broadly, it is the use of electronics or technology solutions to improve your supply chain productivity and agility to create better customer experience while optimising your cost to serve. In two things I'd like to highlight, first, the applicability of these solutions would vary for each company, depending on the level of their maturity and business needs. For some companies, digital supply chain means replacing more of the manual processes with digital data and process support. For others, it means using autonomous mobile robots and other forms of robotics in their supply chain.

Secondly, it's not about technology only. There is no plug and play solution that will solve all your problems purely by installing the latest, best solution in market. To reap the benefits of digital supply chain, businesses need to combine adoption of tech solution with transforming operations, processes and having the right talents with the skill set to execute this.

Yvonne Chan: Yeah, so it totally varies, and a digital supply chain is not a plug and play solution. Thanks Susana. Paul, your definition?

Paul Lim: Hi, thanks for having me onboard. I would describe this as how we embed and integrate new technologies, such as Internet of Things (IoT), robotics, and AI-enabled applications over traditional processes, and then enhancing these processes with higher throughput and effectiveness.

I mean, from where I'm coming from, I look at how the digitalisation of whatever is happening in the world today that can enhance operations, but there must be an outcome to it. So, I see the outcome as throughput and effectiveness in this case to me – reduction of errors (and) improvement of customer service operations.

Yvonne Chan: Reduction of errors (and) improvement of customer service operations. So, how has the digital supply chain though evolved over the years? Sue?

Susana Utama: Yeah, so I would say supply chain is one of the first business function to undergo this technology transformation. But in the beginning, developers created this application to take advantage of the data from Enterprise Resource Planning (ERP) system, but the focus at the time was really more of like streamlining your supply chain activities, to support your major operations like warehouse management, and help the management on doing some data analysis. But as it evolved, and the technology continues to evolve, it's very far reaching like some of the tools and technology that was mentioned earlier, like IoT, blockchain, big data and so forth.

What I really think right now, the latest technology that help businesses is really one that helps create this end-to-end visibility to transform their operations. They are better able to compile (and) link large sets of unstructured data to help them in terms of like, doing better analysis, doing better forecasting and better decisions at the end of day. The second thing that the technology is better now is in terms of integrating with the company’s existing processes and enforcing the kind of collaboration across different business functions. Because supply chain, as the name indicates, is a chain where actually multi business functions’ inputs are required.

Yvonne Chan: It's kind of like what Paul alluded to in his definition, right, where there is really a much better integration of so many processes. It's like a souped-up supply chain. Right, Paul, you're the Founder and President of Supply Chain Asia. You've been in this role for almost 16 years now. So, what key trends do you see adopted in this current environment?

Paul Lim: I divided the understanding of technologies, or at least new technologies to the three core areas. I've termed them as Internet of Things (IoT), AI-enabled applications and autonomous technologies moving towards the use of robotics, or at least autonomous mobile robots in warehouse. I do see that there are lots of interest being gained over the years in how these three core technologies are being adopted.

Okay while I do see this, you’re asking me for key trends, I also see, at the same time, that the adoption is not as fast as I think it should be. And this is something that strikes some form of curiosity in me as a guy who runs a platform to link the industry or bring the industry together. I essentially narrowed this down to two factors, that there's a lack of understanding of how these technologies work in an actual operating environment. But at the same time, there's also a lack of insufficient case studies and success stories being shared on how (and what) the adoption of these technologies can lead to.

Susana Utama: Let's first address the reasons behind why some companies are not adopting this fast enough. I mean, first, like costs, right? Every time we do a survey with all the companies that we'll be working with, cost is always the first (reason), which is rightfully so. Because all of these technologies are still evolving and a lot of the questions in their mind is that, is it worthwhile for me to invest in it now or wait until it's mature enough, right. And second thing is the talent, the strength of your internal organisation to actually take on this transformation, because it is going to be complex and it's not only revamping your data structure, it's not really the revamping your software hardware, but is actually about transforming your operations and way of working.

So, I just want to recognise all of that, yes, but then it does not mean that you should stop there, because digital supply chain is happening, the technology is here. It's a question about how you want to leverage the strengths, right? And I think the first step that you need to do is really understanding what is your vision, and it's very much tied to your business. What are your company's strategic goals? Whether it's basically you want to be the lowest cost provider out there? Or if you want to be providing the best omni-channel experience? So it is something that you need to decide internally and in alignment with your strategy’s goals.

And second thing is like really understanding what is your current capability? What are your gaps? And really start looking out and finding the right partners to work with you. And the third is really recognising that no one gets it right the first time. Everything is an iterative process, which is fine. It's really just taking that first step in starting to make that necessary investment, whether it's internal, you know, capabilities, or whether investing in new technology, new hardware, new software, but of course, making sure it's in-line with your investment appetite. And a lot of times if you classify it into like, the no-regret kind of investment and investment that probably you need a bit more time to see what are the proof-of-concept out there.

And there are actually many things for under no-regret moves, at least in my opinion, for example, like looking into inventory tracking, which is surprising that many companies are not doing that yet. And by doing this, by adopting inventory tracking, would really help you to have that much better visibility of your inventory levels across the value chain. So, go ahead and start investing in that. As you progress and as you start going along with the different solutions that you've adopted, and then, you know, take a step back and see what else can I do. Right, so it's very much an iterative process.

Paul Lim: Folks like EY and also like our agencies who are supporting digital supply chain projects, are constantly looking for successful case studies to share. And I think that that could be one avenue whereby more and more of these success stories can be broadcasted and showcased in some form or in some manner, and through various media. I mean, this is one of the kinds of media that I see. But to me, that is a macro aspect of it. In fact, I actually think that the macro aspect of it is very well done because if you google emerging supply chain or emerging technologies in supply chain, you'll get all kinds of answers and all kinds of news from all over the world and including Singapore, right?

So but going to the macro side, how do we then create opportunities for companies to at least get to experience first-hand on how these technologies can be adopted, the kind of benefits they can derive from it, and more importantly, to understand the gaps and issues that needs to be mitigated.

In order to get this thing done, I actually think that on a macro aspect, we need to create more platforms. I know there are existing platforms – I host one of them, called the Smart Technologies Lab. There is a supply chain lab that used to be called the Centre of Innovation for Supply Chain Management (COI-SCM) at Republic Polytechnic. I essentially believe that there should be more and instead of trying to be the one and only platform that exists in Singapore, that we should find more of such opportunities, so that companies and individuals, and I say individuals because individuals drive essentially the adoption of technologies, should get their hands on.

Paul Lim: It's always cost. And then the cost comes in with an additional question and says, how does it really work? Are the benefits real? And this is going to the part that says that they hear about it, they read about it, but they're not so sure that it is really true. So how real are the benefits?

So when I go into articulating how these technologies actually work, I also talk about the mitigating factor. When we go into the total cost of ownership, we add on the qualitative part of it, that the intangibles are much more valuable than the quantitative aspects. So in having them on our platform, it's a lot easier to answer their questions, work with them on their concerns, and like what I have said, mitigating the gaps and the issues.

Susana Utama: So, I think one of the really, really core thing that I see right now is how do you establish your data quality, right? That is the first step, that is your data quality, is your data comprehensive enough because this is what you would need, the fundamentals for you to create more of an end-to-end visibility across your value chain, right?

After that, you can basically leverage it to do better collaborations across your functions, across other players in the ecosystem, because all those like technologies at the end of the day, what we will really benefit from it is if we all no longer operate in silos. You can actually work together and leverage from this real time end-to-end data to help you in terms of decision making. So, one key takeaway is having that data quality fixed in order for you to create that end-to-end visibility and collaboration.

I think the other key takeaway, especially for those who are, you know, still very much in probably an earlier stage of adopting this decision is like what I said earlier, knowing what you need. And secondly, those who are probably still debating on how much investment you make, start looking into more of like technology architecture that is probably more on I would say, asset-light. If you are looking into moving from your current core platform, for example, to more of like a cloud-based capability. So, in a way you are like leap frogging the process, because when you're taking more of like cloud-based capabilities, you could potentially at the end, leverage and optimise on more of a collaborative supply chain efforts across your customers, yourself, the suppliers, at one go.

Yvonne Chan: So, establish your data quality, and then also identify exactly what it is that the company needs and the final outcomes. Seems very simple on paper (and) on conversation, but I think it requires a lot of good judgment to narrow it down to, you know, that one key selling point or that one key need. Thanks, Susana.

Paul, you want to weigh in on this? I mean, how important is it to have an embedded digital mindset, you know, for these companies in the sector nowadays?

Paul Lim: Okay, so in the Smart Technologies Lab, I've been working on a project called Smart Warehouse. For Smart Warehouse, the entire idea is that the warehouse must know what is going on. So, if you understand the warehouse as an entity, as a thing. A thing does not think. A thing just works. But I want a thing to think, so how do I make a thing, think? Am I going somewhere that's not supposed to go? But the idea behind that, if a Smart Warehouse can think on its own, then maybe that Smart Warehouse can direct actions without having a human to intervene. So, it was in this context that I was driving a project in the Smart Warehouse, that I looked for solutions.

And like what I said, some of the solutions are not found in Singapore. So, I found a particular vendor who provides the indoor location management system or indoor location system to identify where the operators are. And in understanding that technology, actually it's a sensor, it's Internet of Things (IoT) that the operator carries with him and I can watch an operator’s movement. And by understanding or at least by knowing where my resources are, I could align my resources to the tasks to be performed and perform tasks more effectively. So essentially, this minimise movement, maximise proximity to where the tasks are supposed to perform. When a task is performed, align the operator to the next task that's nearest to the operator rather than let operators continue to walk a long way, along each point to get things done. And we could also embed further by bringing it in say autonomous mobile robots, that can then help them move things or especially the conveying of goods and cargo in a warehouse, which is actually a big component of what a warehouse is all about.

And that aspect, those two vendors that is helping in this project are not from Singapore. They are actually from outside Singapore. So, in our platform, we are able to find them (and) bring them in. One of them is from France for the Internet of Things (IoT). The robot is actually from China.

Susana Utama: I think any company needs to address both. There is no one size fits all approach as well. I think first things first is like, recognising what is your current talent right now. What are the necessary, you know, learning that is required for your internal organisation to ramp up? And second is finding the right partners, like what Paul mentioned earlier.

But before you go out into the market, I think it's just necessary to do that self-assessment check first. Whether you have the right data sets? Are you capturing the right data? What kind of processes do you have? Can you upgrade these processes, you know, and how long does it take? And these are like some of the things that really just more of a self-diagnosis that is necessary for them.

Paul Lim: This industry traditionally is perceived to be a laborious, low-end, I mean, if you're looking at trucking and warehousing. But taking those two operations into perspective, today, we are seeing that the future of trucking could be autonomous. The use of advanced technologies, the future of warehouses is definitely more robotics, or more collaborative robotics, and less human. And it's natural in this aspect that I actually see that the future of supply chain, at least in this industry of logistics supply chain, are beginning to attract new tech.

New tech equals younger talents. I was saying that the younger professionals who are looking at our industry today, saying that this industry is changing. And like any change, it's good to be in the forefront of it. It's good to be a pioneer of it. And to me, all this augurs well for this industry that I lived in for the last 30 years, that more and more younger and exciting talents are coming into our setup. And I really find it exciting because I work with start-ups. Most of the start-ups I work with are less than 30 years old. I feel very old when I'm with them.

Yvonne Chan: But you've been in this industry for 30 years and counting. And it's very refreshing that you know, you also wanted to be there at the forefront of change so that you can also give advice to the younger start-ups right, who will look to you for advice on this front.

So, Susana and Paul, we've talked about how the digital supply chain is going to evolve, the elements that companies need in order to leverage some of these latest technologies and ride this wave of the ever-changing supply chain. What continues to keep you excited about a digital supply chain of tomorrow and if you could give one word of advice or one piece of advice to enterprises who are still considering whether or not this is the thing for them, what would you say? So, two elements to this question – what are you excited about and one piece of advice. Susana?

Susana Utama: What keeps me excited is because it continues to evolve so there is no, I think back then in manufacturing, like we always think oh the Toyota model, you know? Like everybody like goes towards the Toyota model. Right now, with the digital era, there is no such model and probably there will not be because the technology is evolving so fast and most likely is going to be in hybrid models anyway. And I would also recognise that probably what keeps me excited is also probably what going to you know, get some companies you know, feeling a bit daunted, right, because they don't know, given how fast paced these technologies are working right now.

So, what I can tell them is that you know what, the technologies will be here and they'll continue to move on. It's the question whether, you know, how do you want to actually leverage it? How do you want to optimise it? It's not going anywhere. You need to do it anyway at some point in time.

Also, the other thing is that I think a lot of times we focus so much on the technology itself, kind of like slightly forgetting the fact that this technology will only work because of the humans that are basically still very much like involved in every part of the process. So even when you're implementing these technologies, keep in mind how do you actually work with the different parts of your business functions, because they will come with their own apprehension and own concerns about these technologies. How can you work with them and get them to adopt this together with you?

Yvonne Chan: Thank you, Susana. Paul?

Paul Lim: Actually, I'm very excited with this industry today, because I see that the new technologies, are not just accelerating the change, it's actually enhancing the way it is operating. And it's becoming better and better, not much like Tony Stark in Ironman suit kind of thing. So, I truly believe in that, you know I actually believe that the use of technologies will enhance supply chains and then supply chain as generic. And as we start cascading down, supply chain as supply chain forecasting, supply chain as supply chain procurement, supply chain as supply chain warehousing, and just become much better than before.

If I have one word to describe, or to give advice to the industry is that this industry should be going away from being competitive driven. In competitive driven, that's why they don't share. That this industry needs to be collaboratively driven, because (as a) collaborative driven (industry), it is actually better for everyone. And my only thing to everyone is that because information is being shared, whether they like it or not, that it is better to be collaborative than competitive.

Yvonne Chan: Better to collaborate than compete. Thank you so much Paul and Susana, for this very illuminating discussion. I can feel both your passion for the supply chain industry. Paul, 30 years and counting, but I don't see you slowing down. In fact, I think you're a great role model for many, you know, who would say that who might feel very tired after being in this industry and seeing the changes, you're the complete opposite.

And I think you've also both highlighted some best practices that leaders must be aware of in order to realise some of the full results and outcomes. And we're also looking at a rapid involvement and a transformation in this sector with exponential benefits, both tangible and intangible. And like what you said, Paul too, technology is here to enhance and uplift the sector. And we definitely need a more collaborative industry with a generous sharing of information. So, thank you both very much. I'm Yvonne Chan. Thank you so much for joining us today. We will see you next time for another exciting and insightful episode.