supply chain

Amidst the COVID19 pandemic, enterprises in the manufacturing sector across the world are searching for geographies that can be reliable partners in transforming their supply chains.

Southeast Asia (SEA) with its strong technology startup ecosystem and laser focus on research and development in high-end digital technologies certainly emerges among the frontrunners. The Bloomberg Innovation Index includes three countries from the region among the top 50 destinations in the world: Singapore, Malaysia, and Thailand.

Furthermore, the region has collectively attracted investments worth US$13 billion since 2015 of which 75 per cent has been in logistics and e-commerce. With opportunities in manufacturing, logistics, and trade for enterprises and a thriving startup ecosystem, SEA has the potential to be the supply chain partner of the world.

However, achieving this calls for addressing the challenges of geographical, linguistic, and economic diversity in the region in addition to providing convincing answers to the questions that manufacturing enterprises now face in the midst of the COVID19 pandemic.

The ability of startups in SEA to leverage intelligent automation may just be the answer that the global manufacturing community is looking for.

Intelligent automation for supply chain transformation

Intelligent automation integrates traditional automation with artificial intelligence to produce synergies of scale and differentiation at the same time.

Also Read: Why e-commerce startups will revolutionise the supply chain in Southeast Asia

While traditional automation of business processes such as invoicing, payment processing, inventory management, warehousing, and order tracking have been in use for some time now; artificial intelligence leverages data of record and past behaviour regression analysis to provide insights for detecting anomalies and risks, customisation and scenario-planning.

Scalability enables cost reduction, faster turnaround time (TAT), and time to recover (TTR), differentiation allows for predictability, visibility, and de-risking of business processes. The coming together of these two technologies can lend mass customisation properties to manufacturing.

Major applications of intelligent automation in the supply chain that are of particular relevance to manufacturing enterprises in SEA include enterprise supply chain decision support systems, collaboration with stakeholders for physical tasks, and logistics automation.

Given the lessons from the COVID-19 pandemic, it is important that enterprises invest in building location-agnostic supply chain decision support systems that can provide all necessary information to the nerve centre of the supply chain team and enable them to hit the ground running as incremental information begins to emerge.

Doing so will enable the supply chain nerve centre team to differentiate and delegate the necessary action points for physical tasks within the enterprise and beyond by facilitating multi-tenant collaboration from diverse locations during contingencies.

Also Read: Why machine learning is the key to marketing automation

Finally, there is a pressing need for enterprises to explore new ways to make their logistics more technically and economically efficient to conquer the challenges posed by the high costs of operating in diverse geographical terrain.

There is also an urgent need to make logistics more visible in the face of sudden labour shortages and keep cargo moving. The following points in the supply chain digitisation agenda should be accorded top priority:

Any restructuring of the supply chain by enterprises in the manufacturing sector will require not just the shifting of product lines, but the shifting of the complete supply chain ecosystem to SEA. This calls for enterprises to connect the dots among diverse supply chain processes by pivoting these on intelligent automation to collaborate with stakeholders for physical tasks.
Linguistic diversity in SEA may create a barrier to stakeholder collaboration. It also creates a pressing need for customisation and differentiation. Startups in the region can partner with OEMs and large enterprises to crack the code of the “local paradox” with their intelligent automation solutions.
The diverse geographical terrain in SEA can present logistical challenges to the manufacturing sector. This can significantly push up the costs of logistics operations, inventory management, and warehousing. Intelligent automation can provide solutions for logistics automation, full truckload (FTL) cargo optimisation, optimisation of warehousing and inventory, and bring greater visibility to cargo through track and trace of the supply chain.
Finally, enterprises looking to set shop in SEA will have to make sure that the lessons on supplier capability mapping, visibility into risks affecting supplier contracts, and honouring contractual obligations learned from the COVID-19 pandemic are not lost. Supply chains in manufacturing involve making decisions for the long run, and a stable supplier relationship management framework holds the key to realising and sustaining returns from investments. For enterprises to scale success with their supply chains in SEA, they must future-proof their systems and build a compliance-cost-risk framework to secure their investments in supplier partnerships.

Role of startups in supporting intelligent automation

Distances can cost enterprises as shown by the COVID-19 pandemic. Intelligent automation can enable manufacturers to zero down the gaps in the supply chain by enabling all stakeholders to stay connected. Tech startups in SEA with their cutting edge research and development in intelligent automation can allow enterprises to create connected supply chains of the future that allows all stakeholders including OEMs, suppliers, ancillary industries, hyperlocal logistics partners, and warehouse operators to conquer distances.

Connected supply chains can bring all stakeholders on board a digital ecosystem to ensure that gaps in agreements and contracts are identified proactively, and any noticeable deviation from the established trajectory of supplier-manufacturer collaboration is responded to, at the earliest and thus keep the edifice of trust-building and status quo among stakeholders from collapsing.

The pivoting of contracting lifecycle management platforms on artificial intelligence and machine learning can be strong enablers of the creation of such connected supply chains.

Such initiatives for the inclusion and enrolment of diverse stakeholders into an automated supply chain ecosystem can by new-age startups extend to emerging technologies such as robotics, 3D printing, smart packaging, digital commerce, and enterprise payments and invoicing.

Tech startup partnerships in SEA

As enterprises across the world stare at the emerging contours of a new normal beyond the COVID-19 pandemic, there is a broad-based consensus on the need to make the manufacturing sector more technology-enabled and supply chains more agile, flexible, efficient and de-risked.

Tech startups with intelligent automation capabilities can make this supply chain transformation happen in SEA. Thirty-seven per cent of the volume of global trade is looking for a new address to shift base due to the downtime in production, breakdown of supplier relationships, and trust erosion due to the COVID-19 contagion.

Furthermore, enterprises want to get out of the ensuing tariff wars that render efforts for economic efficiency, futile. SEA with its skilled workforce, capital market reforms, maturity in fintech and banking, high penetration of the internet, and smartphones has most of the components required to create a supply chain ecosystem.

With intelligent automation by tech startups, all of these competencies can be connected to make SEA the workshop of the world.

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