Supply Chain Reboot is Here

Are You Ready for the Supply Chain Reboot?

CHONG KOK KEONG

Member, SCS Digital Achiever (Individual), Tech Leader Awards 2022 Chief Executive Officer, Global eTrade Services

Global supply chains today are incredibly complex. When this highly intricate and interconnected system is disrupted, the ripple effects – from shortages to price hikes – are quickly felt by everyone. Digitalisation offers a solution at the heart of this crisis.

This year, we witnessed how the intensifying war between Russia and Ukraine added to the global supply chain chaos triggered by the pandemic. Energy prices soared to record highs of almost US$140 a barrel1 while trading sanctions imposed on Russia restricted the flow of critical resources worldwide. There is no telling when the war will end but three key secular trends are transforming supply chains and shaping how supply chains of the future will look like.

RIDE ON OPPORTUNITIES E-COMMERCE BOOM OFFERS

The first key trend is e-commerce. Growing steadily over the past decade, e-commerce surged during the pandemic – from shopping for grocery and fashion to food delivery. Online shopping had been on the rise before the pandemic, but COVID-19 accelerated the growth by two to five times.2 In the US alone, Americans spent US$1.7 trillion online during the past two years, a jump of about 55% from the US$609 billion spent in the two years prior to COVID-19.3

The trend is here to stay even as brick and mortar shops reopen to walk-in customers. Physical stores and face-toface touchpoints may reclaim part of online retail sales but more consumers are now sold on the convenience and price competitiveness of shopping online.4 Retailers likewise look set to explore new omnichannel models as they recalibrate their business models to meet evolving consumer expectations.5

It is my vision to empower these small and medium-sized enterprises (SMEs) with solutions that allow them to navigate and meet compliance, financial, and other requirements for cross-border e-commerce fulfilment seamlessly. Notably, my team and I have recently developed an import/ export concierge to help manage such complexities for SME traders and logistics service providers. Besides providing them with end-to-end supply chain facilitation solutions, we offer in-built advisory capabilities to enhance their competitiveness against bigger players.

TAP ON TECHNOLOGY TO IMPROVE RESILIENCE

The second key trend shaping supply chains is technology. Even before COVID-19, many countries and companies were already ramping up digitalisation and leveraging Industry 4.0 initiatives such as Artificial Intelligence (AI), quantum computing, the Internet of Things (IoT) and other future-ready technologies.

According to an Economist Intelligence Unit study, 96% of respondents increased their investments in digital tools or processes to manage supply chains during the pandemic.6 Asian companies, in particular, adopted solutions which enhance customer service and facilitate inventory management. Technologies like AI and machine learning provide supply chain managers with deeper insights and control. These technologies also empower them to make better decisions by predicting future demand, identifying bottlenecks and improving efficiencies through automation.

In this vein, my team and I have been working relentlessly to reimagine the future of trade and supply chains in an increasingly digitalised world. With better integration and orchestration across physical, regulatory and financial activities, companies enjoy improved productivity and bottom lines from simplified trading systems, as well as more accessible and predictable crossborder trades.

At the global level, countries are strengthening regional value chains through trade pacts and other policies promoting free and preferential trade. As more parties work together to make cross-border trade more seamless, predictable and efficient, we can expect tech adoption to grow – eventually enabling full end-to-end digitalisation of the entire supply chain.

EMBRACE THE RENEWED FOCUS IN SUSTAINABILITY

The third key trend is sustainability. The pandemic has led to a paradigm shift in how companies approach supply chain issues – many now view sustainability as a necessity. While fundamentals such as diversification to reduce dependence still apply, digitalisation is increasingly seen as the way to improve supply chain performance and mitigate effects of a supply chain crisis. Hence, it is no coincidence that sustainable supply chains also call for technology adoption.

The implication is that we need futureready digital solutions to overcome disruptions, reduce inefficiencies and facilitate the ease of trade in the new normal. In addition, better integration and stronger orchestration across the supply chain will enable players to share and coordinate resources globally. This helps to optimise the overall performance of the chain while meeting trade compliance and crossborder requirements.

That is why my team and I are constantly pushing the boundaries of simplifying the complexities of logistics and compliance requirements through our software-as-a-service (SaaS) platforms. Although the pandemic has created many new challenges in global markets and supply chains, we are here to help local businesses bounce back stronger with our suite of innovative services and expansive network of customs nodes that interconnect governments and businesses.

By enabling better integration, we hope to not only make cross-border trade more accessible, predictable and easier, but also more ready to weather turbulent times with stronger and more resilient global supply chains.

2 https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-normal/all-chips-are-on-the-table 3 https://business.adobe.com/sg/resources/digital-economy-index.html 4 https://www.ubs.com/global/en/wealth-management/our-approach/marketnews/article.1548128.html 5 https://www.mckinsey.com/industries/retail/our-insights/adapting-to-the-next-normal-in-retail-the-customer-experience-imperative 6 https://impact.economist.com/perspectives/sites/default/files/eco128_citi_supply_and_disruption_9.pdf