Connected supply chain: Singapore at the center

Singapore has long been one of the world’s major logistics hubs, and digital transformation can help it remain so. The connected supply chain is now a reality, and logistics companies are set to enjoy its benefits. What is the state of Singapore’s supply chain business, and where are we going to next?

Traditionally, Singapore has represented a fairly typical industry supply chain, featuring sourcing, production, transport and logistics (inbound and outbound), warehousing and distribution. Our location at the heart of Southeast Asia has meant that we developed a role as a regional hub for shipping and logistics, moving goods around Asia Pacific, but again, using traditional means to do so. Today however, the adoption of digital technologies is dramatically changing the landscape for Singapore.

Singapore’s place in APAC logistics

Singapore has long played a significant role in the global supply chain business, being central to APAC’s logistics and essentially the lead territory in one of the world’s most important trade routes. Research from PwC has forecast that by the year 2030, 16 of the top 20 bilateral trade routes in the world will include APAC markets, comprising $4.7 trillion in trade value, with APAC trading routes making up over 80 percent of the world’s logistics value.

Singapore is committing to the future and wants to reinforce its place in APAC’s logistics industry. With that in mind, the Singapore government has begun transforming logistics as part of its $4.5 billion Industry Transformation Programme. It has goals to drive excellence in logistics operations and to be leaders in innovation, while also building a strong core of local logistics talent and making Singapore attractive to inward investment. This scheme is named the Logistics Industry Transformation Map (ITM) and follows similar plans for Singapore’s food and beverage and precision engineering sectors.

The overhaul of the logistics space is poised to add $8.3 billion in value to the sector and create in excess of 2,000 jobs, too. And digital technology will play a central role in that transformation.

Transforming Singapore’s supply chain with digital

The potential for Singapore is there: according to PwC, “Advanced logistics hubs, such as Singapore, show strong potential for evolving into digital nerve centers managing supply networks in APAC in the coming years. These locations are equipped with quality institutions, infrastructure and support services [that can] maximize the impact of a sophisticated digital supply chain model.”

So, the next logical step forward for Singapore’s supply chain sector is to fully embrace digital. Tools like cloud-based systems, data analytics and artificial intelligence (AI) are already in play, and can help Singapore’s supply industry drive benefits. Further to these tools, Internet of Things (IOT) solutions are helping companies make supply chains more efficient, enabling them to predict when parts need to be repaired or replaced, for example, while sensors and data analytics tools let them keep more accurate inventory, again reducing costs.

Other tools on the way

On top of “simple” IoT and AI solutions, other digital solutions are helping revolutionize supply chain activities and traditional practices. For example, next-generation robotics and automated vehicles (AVs) are already deployed in production lines and warehouses to make operations more efficient.

Singapore is also at the forefront of Blockchain-enabled supply chains, using the decentralized ledger technology to enable the digital tracking of information, including origination data, batch numbers, storage temperatures or processing information within the supply chain. Blockchain offers a valuable opportunity for Singapore’s logistics industry to improve traceability and visibility compared to existing technologies like RFID tagging.

A good example of how digital has been embraced in Singapore exists in Project SAFER (Sense-Making Analytics for Maritime Event Recognition), which was designed and implemented to optimize port operations using predictive analytics and machine learning tools that improve vessel tracking, detect illegal activities and accurately predict vessel arrivals, among other applications. Singapore’s Maritime and Port Authority also invited tenders based on digital technologies like IoT, data analytics and AI, with funding available to companies that pitch interesting ideas. The commitment Singapore has to new technologies for transforming logistics is clear.

A growth opportunity

According to IDC, digital tools in the logistics sector will undergo a marked increase in use throughout APAC between 2016 and 2019, with IoT-enabled asset tracking systems growing by 10 percent, IoT-enabled wearables growing by 16 percent, AI-powered autonomous vehicles growing by 16 percent and supply chain analytics by 14 percent.

PwC found that 67 percent of businesses now “consider digital supply chain disruptive and important” and that 40 percent of APAC companies have already deployed technologies like collaboration tools and supply chain analytics. Singapore’s logistics companies are continuing along the digitization path, and in time it can help them drive a reduction of 3.2 percent in annual costs as well as a 2.7 percent increase in annual revenues.

The shift to digital solutions is central to this, and the traditional supply chain model is now outmoded and, to remain competitive, in need of an overhaul. In the digital supply chain, every stakeholder, be it supplier, production, distribution or consumer, makes up a mutually-beneficial logistics ecosystem. Singapore looks set to be at the vanguard of the supply chain revolution.

To read about how Singapore and Asia Pacific companies can transform supply chains using the latest digital technologies, download the PwC report, Building connected supply chains.

Tuan Le
Tuan Le
Tuan Le is Managing Director for ASEAN, Japan and Korea at Orange Business. He covers a range of leadership roles across Asia Pacific and ensures seamless support for customers. As head of sales and operations for ASEAN, Japan and Korea, Tuan uses a model of supportive and participatory leadership to promote the concepts of team building and empowerment in the region. In his spare time, Tuan likes to stay active and enjoys cycling, jogging and keeping fit.