A recent White House Economic Report painted a grim picture of vulnerable and frail global supply chains (GSC). Over the last couple of years, climate change, the pandemic, international conflict, economic uncertainty, labour shortages, and the evolving financial crisis have all contributed to mountain problems for the industry and consumers as empty shelves became the norm.
The economic environment continues to deliver more challenges. The world is beginning to accept that the risks of a climate disaster are rapidly becoming the biggest threat to the future of humanity. But the impacts have been particularly impacted Asia Pacific, with a recent KPMG study stating it’s time for the region to rethink supply.
As a result, proactive CEOs are looking to get on the front foot by increasing investment in detecting disruption and transforming innovation processes while leveraging emerging technologies to build resilience and sustainability into their supply chains.
How does digitisation and sustainability help solve the multifaceted supply chain challenges?
Although Industry 4.0 has achieved buzzword status, it's important to remember that digital transformation of the industry is much bigger than rethinking manufacturing from the factory floor to the logistics of delivering them to the shelves many of us take for granted. Instead, it actually represents an opportunity to remove the overreliance on third parties and friction points while changing the world for the better.
This new way of thinking comes at a time when SYSPRO APAC CEO advised that technology and innovation will play a critical role in reshoring Australian manufacturing. Elsewhere, FourKites recently unveiled $10M strategic investments to transform supply chains in Asia-Pacific while also easing ongoing challenges in the region, further highlighting how the region is leading the way.
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Technology advancements play a critical role in aiding sustainability efforts across the industry. For example, manufacturers can invest in green technology when reducing their carbon footprint or restoring machines. Elsewhere, emerging technologies, such as AI and machine learning, show the potential to automate manual and repetitive tasks.
Smart manufacturing also empowers leaders to create accurate and detailed production plans that enable manufacturers to predict failures and monitor product defects. However, it is not a one-way street. When shifting to technology, manufacturers must ensure that both their suppliers and business partners have the same commitment to sustainability required to support them in their green mission.
Trust and transparency
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Singapore is currently leading the way in decarbonising its power sector, but there is also an increasing demand for greater, trust and transparency in supply chain data with the rise of artificial intelligence (AI) in the industry. According to recent UnivDatos insights, AI in the supply chain market is predicted to grow at a CAGR of 46%, reaching USD 35 billion by 2028.
eProcurement solutions are unlocking the ability to have greater control over procurement and purchasing processes. But they also provide complete visibility into their spending and real-time access to accurate purchasing data. These small changes ensure minimal errors and increase procurement efficiency while reducing costs and wastage.
Predictive maintenance technology is also crucial in the global push toward further transparency and sustainability. As manufacturers increasingly embrace the digitisation of everything, they are unlocking the ability to obtain greater visibility into energy consumption across their operations to identify equipment reliability and maintenance to ensure energy is efficiently utilised.
Solving the biggest problems faced not just by the industry but the entire world, requires everyone to step outside of their silos. As a result, we are seeing a real appetite for greater collaboration. At RS, we have further strengthened this approach with DesignSpark, which helps engineers access powerful free design tools and resources to collaborate with engineers from all corners of the globe. Together, they can exchange ideas and tackle the industry's most significant challenges.
Overcoming supply chain challenges in a digital world and ESG future
If we have learned anything from the events of the last three years, it's an urgent need to increase resiliency across the fragile and vulnerable GSC. The challenge is collectively improving how the industry can better anticipate, plan, and react to the unexpected and what some would call inevitable surprises on the horizon.
Every touch point across the manufacturing and supply chain industry is being reimagined to increase resilience to make it fit for a digital world where social responsibility is the new currency. For example, governments are increasingly forcing companies to tackle concerns around environmental, social, and governance (ESG) which will pressure many leaders into questioning the relationships and ESG credentials of their suppliers if their values don't align.
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Singapore, Thailand and Malaysia are the leading ASEAN countries in the race to decarbonise their power sectors. But this vision will require cross-functional integration and collaboration across an entire ecosystem of vendors. For these reasons alone, we can expect companies to start mapping out their supply chains to obtain a holistic view to help them mitigate risk and increase flexibility by implementing digital technologies into their operations.
It's also important to highlight that we live in an age where machines should be leveraged to complement humans rather than replace them. Digital twin technology is a perfect example of how humans can create virtual replicas of potentially thousands of warehouses and interconnected supply chains to model, simulate, test, and experiment with different scenarios to assess the impact of every data-driven decision before even thinking of implementing it in a live environment.
The European Commission is already beginning to explore the art of the possible with Destination Earth, which is on a mission to create a digital replica of the entire planet. In addition, Industry 4.0 is paving the way for a dream collaboration between humans and technology to help reduce waste, and hazards to human life, minimise energy consumption, streamline operations and increase efficiencies across every supply chain.
However, it’s South East Asia and India that are widely considered to be the rising stars in the industry powering growth across global supply chain networks. For example, Asia is predicted to account for more than 40% of global economic output by 2030. As a result, there is an opportunity to design and configure supply chains that will meet both changing consumer demands while also overcoming the current supply chain challenges.
The worlds of technology and sustainability are destined to collide and change the world for the better. When we arrive at this destination, we can finally put the global supply chain disruptions of the past three years behind us and begin unlocking new opportunities. The only question that remains is, what are you waiting for?
Syed Suroor Anwar is the VP for APAC of Strategy & Commercial at RS
