By Karmjit Singh, Chairman of CILT Singapore
Before the first industrial revolution, supply chain management (SCM) were mostly local and restricted to regions. Global supply chain management started to take shape when bilateral and multilateral free trade agreements were formed, leading to the growth of world trade and cross-border manufacturing and the globalisation of production.
Supply chains have since then become inordinately more complex. This means that sources of manufacturing and production will shift between different geographies. Sources of supply of raw materials and the distribution of finished products and supply chains will also shift. Just-In-Case and attendant supply chain resilience will be the prevailing mode of thinking that will drive growth in the new normal in the post-pandemic phase.
Global geopolitical tensions have also led to reshoring or onshoring of manufacturing in major industrialised and developed countries, many of which in the past had depended on cheap factories in China.
Advancement of Technology in Supply Chain Management
The emergence of new technology has spawned innovative solutions that are beneficial to the digitalisation of supply chains, such as Internet of Things (IoT), machine learning (ML), data analytics, artificial intelligence (AI), robotics, blockchain, predictive and prescriptive maintenance. All these solutions are helping to break down organisational silos and improve efficiency, productivity, service quality, reliability and cost-effectiveness, and enabling closer collaboration between supply chain networks.
Warehouses today, for example, have sophisticated Warehouse Management Systems (WMS) and Inventory Management Systems (IMS). At the same time, multi-modal transportation modes have benefitted from multiple types of Transportation and Fleet Management Systems (TMS and FMS). Even requisitioning/purchasing has benefitted from Order Management Systems (OMS). Those were traditionally technological functions to help improve efficiency, reliability and accuracy of the supply chains.
Supply chains have become far better integrated, and network orchestration between suppliers and customers on a real-time basis is now achievable. In the past, technology and related software applications were costly and not justifiable based on returns on investment (ROI) or hurdle rates. But today, with cloud-based solutions and software-as-a-service (SaaS), companies do not need to make major upfront technological investments anymore. ‘Pay-per-use’ is now the default for businesses looking to digitalise their operations and supply chains.
How Can You Adapt to the Fast-Growing Industry?
Reports have shown that the SCM is expected to grow further, closely following the inevitable shifts in global trade flows. Leaders must recognise the ‘Industry 4.0’ revolution, the major ‘SMART’ technological trends and the accelerating pace of digitalisation and adapt their supply chains accordingly. As robots replace repetitive work, many traditional jobs will be at risk. Employees will need to be retrained and reskilled for new jobs, making talent management a major challenge for the supply chain industry. Massive upgrading and reskilling of the workforce is needed in order to support future economic growth. The pandemic has demonstrated to the world the importance of supply chain resilience not only to save lives and ensure safety and food security, but also to sustain jobs and livelihoods.
There is also an increasing need to integrate sustainable choices into SCM, and think about how a company’s supply chain can help promote sustainability and environmental progress. For instance, do you want to make greater use of cleaner, zero-emission fuels and electric vehicles in your supply chains, which is the trend for the future? This is because in order to minimise the adverse effects of climate change, countries worldwide are seriously committing themselves to achieve net-zero emissions by 2050. The growth of renewable fuels will be relentless. The shipping industry is transitioning to using hybrid fuels, such as bunker fuels and LNG gases, while the airlines industry is gradually switching to cleaner and sustainable aviation fuel blended with traditional fossil-based jet fuel.
Equip yourself with concepts and practical knowledge of the world of logistics and supply chain management with the Diploma in Global Supply Chain Management, a course that is partially co-developed with the Chartered Institute of Logistics and Transport, Singapore (CILTS).
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