23 November 17 The Business Times
(winners of the 2017 Supply Chain Awards):
- Ms Pang Mei Yee, vice-president, head of innovation, Asia-Pacific DHL Customer Solutions & Innovation
- Mr Poh Choon Ann, chairman & CEO of Poh Tiong Choon Logistics Limited
- Mr Ken Koh, Group CEO of Yang Kee Logistics Pte Ltd
- Mr Henry Low, Asia-Pacific director of Amazon Prime Now
- Dr Robert de Souza, executive director of The Logistics Institute-Asia-Pacific, NUS
Moderator: Paul Lim, founder and president of Supply Chain Asia
DELIVERY logistics continues to flow in new directions led by e-commerce and online innovations. Will SMEs be able to outsmart the giants to survive and thrive? Will new jobs come fast enough as traditional ones disappear?
Business leaders share their views on the opportunities and challenges in the logistics/ supply-chain sector in a roundtable.
The Business Times: What are the key challenges facing the logistics sector in Singapore and the region now?
Robert De Souza: The main challenges facing the logistics industry include those of cost competitiveness and productivity, maintaining excellence in service and quality, gaining visibility across borders and navigating complexity in the region. The overall challenge would be to maintain economies of consolidation from first to the last mile, both fast and cheap.
Ken Koh: If we want to continue as a logistics hub, we have to continually improve productivity, innovate and have a well-trained workforce with relevant skills for the industry. The cost challenges are largely attributed to land cost and labour cost, an ageing population and a shortage of skilled and specialised logistics talents such as in solution designs.
Pang Mei Yee: We have a region that is very diverse in infrastructure, language and culture. As a global logistics player, we put in a lot of effort to ensure consistency and excellence in quality in our operations across markets.
Poh Choon Ann: Singapore is an island with land scarcity and high population density. To attain exponential growth in demand, we need to optimise and lower the costs of freight, warehousing and transportation while offering better quality in services.
Henry Low: As the customer continues to get more tech-savvy, it is no surprise that there is a need to continue increasing speed, flexibility and customisability. As businesses evolve to create new models, it is crucial that logistical innovations elevate those inventions for a seamless customer experience. Innovation in the logistics space will also help combat some of the industry's biggest challenges.
BT: How will tech disruption in the logistics sector affect industry players?
Pang Mei Yee: The industry will be getting much more digitalised and connected, which leads to a more visible supply chain. Logistics assets will be much better utilised as companies learn how to share effectively.
Ken Koh: There will be even more consolidation. It will also affect manufacturers upstream and downstream, in the way the logistics is handled. A shared model would be an enabler for more startups. There will be lower barriers of entry for new players due to technology changes in processes and way of doing things, which in turn also affects regulatory laws.
Poh Choon Ann: Automation and robotics will revolutionise the logistics sector by lowering costs. The bigger players, unlike smaller firms, will have the advantage in the application of automation. Disruptive technology, such as interactive mobile connectivity (real-time booking, status update, feedback), machine learning for route and storage space optimisations, will favour the big players.
Henry Low: The increase in data availability is also transforming the industry as information flow and visibility enable people to share information more quickly and use that information to better plan, price and reduce waste to improve asset utilisation and increase speed.
BT: What are some new opportunities for logistics players in this age of tech disruption?
Ken Koh: The lower barriers of entry potentially allow more opportunities for startups. There will also be a greater drive towards collaboration and consolidation. We need to do more with less.
Pang Mei Yee: Some of the most important trends that are expected to disrupt the logistics industry include advance analytics, collaborative and autonomous robotics, IOT, sharing economy and omni-channel.
Poh Choon Ann: With the aid of the technology, the logistics players can not only provide quality assurance by replacing the processes such as automated retrieval and storage systems. They can also offer wider spectrum of services to provide better customer experiences such as real-time parcel tracking through mobile apps and self-service portals.
Henry Low: Emerging technologies will be crucial to new logistics concepts that were never possible before, such as robotics, sensor technologies, artificial intelligence and machine learning.
BT: Will disruption lead to job loss or more jobs created? What kind of jobs will there be in future logistics?
Robert De Souza: There will be job losses, but the commonly held belief is that this should not be so due to job transitions to meet other requirements. Logistics will always be required.
Ken Koh: Lower value-added jobs will be lost and replaced by technology, but higher value-added jobs will be in areas of IT, data science, business analytics and artificial intelligence. More maintenance would mean that more engineering jobs will be created and jobs will also be redesigned to meet new demands.
Pang Mei Yee: I believe in a world where we will work smarter and have much better work-life balance. Robots will take away mundane, repetitive, rule-based activities from humans. We will need to be reskilled to manage and operate robots as well as lead people who do those activities.
Poh Choon Ann: Tech disruption will lead to higher productivity to cater to higher demand, so I think that it will lead to some job losses, but new jobs will always be created to fill the blind spot of the technology or drive the technology itself. It can also create opportunities for freelancers as we can see in transportation firms such as Uber and Grab. A similar process will happen to the logistics sector.
BT: What skills will be needed for logistics players to flourish?
Ken Koh: Other than the operational know-hows, which often times can be learnt on the job, soft skills are very critical in logistics. The newer technical know-how includes skills in IT, engineering, and Internet of Things.
Soft skills include project management, problem solving, communication, leadership, agility and strategic thinking skills.
Pang Mei Yee: DHL has a global corporate certification programme where our people are trained to be specialist in any role. Starting with core logistics skills, we complement specific roles with competencies in analytics, leadership and others.
Poh Choon Ann: I think the competition nowadays is the competition of innovation. Innovation is the No 1 skill or capability that logistics players need to master in order to flourish.
BT: SMEs have limited budgets and resources. What can they do to survive and thrive? How can they compete with the MNCs who have more resources to adopt and use technology?
Ken Koh: I would encourage local SMEs to collaborate across industries, such as partnering and tapping global customers, who can bring them to new markets. They can also work together with foreign logistics players whose market is not Asia.
There is also the M&A route. Yang Kee has been growing inorganically via M&As locally as well as overseas.
Pang Mei Yee: SMEs can be a lot more nimble to pursue interesting innovative opportunities compared to MNCs. Disruptors, such as Facebook and Uber, have shown us that a good idea attracts investments and can attain success very quickly.
Poh Choon Ann: Unlike bigger players, SMEs can target smaller groups of customers with the aid of technology and are more accustomed to their needs.
BT: What is the growth outlook for our supply- chain industry?
Pang Mei Yee: We are very positive about growth in the supply-chain industry which will continue to do well, driven by e-commerce and emerging market growth. Many of these emerging markets are in Asia.
Poh Choon Ann: With the big e-commerce players, such as Alibaba and Amazon, in the picture, the main focus will be on providing total customer experience. The industry should also be prepared for the surge in demand - regional and even global.
Henry Low: With Singapore's decision to prioritise e-commerce and other initiatives relating to the digital economy during its chairmanship of Asean in 2018, Asean can play a critical role in enhancing cross-border movement of goods and logistics services, which will encourage continued innovation in this space and position our country and Asean as leaders in supply chain and logistics.