Opportunities for Supply Chain Industry in Southeast Asia

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The ongoing global pandemic has hastened the digital transformation of small and medium-sized business as well as large enterprises. However, a survey by AIBP and Oracle noted that almost half of manufacturing and supply chain professionals in Southeast Asia seem to be lagging behind in keeping up with the latest technology. At the same time, there is an emerging opportunity to address this issue, in the form of increasing digitization initiatives, particularly in e-commerce and the digital economy.


Keeping up with the advancement of technology

AI-powered technologies have transformed business conduct in multiple sectors. The advancement has resulted in increased technology adoption, with more processes being automated in the majority of sectors and businesses, such in manufacturing, banking, or healthcare, technology development. In countries like Singapore, Malaysia, Indonesia, and Thailand, the manufacturing industry contributes more than 20 percent to the GDP. However, many IT professionals in the region believe their companies are still falling behind in terms of technology adoption. As much as 46.6% of respondents in the AIBP and Oracle survey say the primary goal of integrating digital solutions should be to improve operational efficiency in order to decrease costs, while 16.6 % believe it should be utilized to grow or generate income streams. 

Although the survey finds limited technology adoption, companies in Southeast Asia indeed are actively investing in new technologies, especially in automating the majority of their activities. Warehouse management software and the utilization of robotics in logistics are just a few of the new technologies being used to maximize productivity. Since technology is becoming more affordable, it is expected that more firms in the manufacturing industry would extend their use of technology in the future.


Tech-powered startups as a promising opportunity

The convenience of purchase, the affordability and availability of items, the ease of refund policies, the diversity of shipping options, the possibilities for real-time tracking, and low-cost (or free) delivery are all factors that contribute to the growth of e-commerce. It is revealed in a research by Google, Temasek, Bain and Company that the digital economy’s GMV of Southeast Asia is expected to reach around US$ 300 billion by 2025. With such a promising prospect of e-Commerce in Southeast Asia, consumers are increasingly demanding speed and convenience, which can be both a challenge and an opportunity. 

Supply chain and logistics sectors have generally been significant growth catalysts for countries, particularly those in emerging markets. Freight forwarding companies in these countries are also racing to keep up with the rise of digital consumption and e-commerce. ISEAS in one of their reports suggested there are several key factors to ensure healthy competition among logistics and supply chain companies. These key factors are availability, reliability, and cost-effectiveness of transportation, distribution, financial intermediation, information, and communication technology (ICT) and other services.


Having understood both the challenge and the opportunity, it is essential to transform supply chain processes and logistics operations with the technical solution and strategies. To meet this emerging demand, digital technologies must be maintained on a large scale, which involves adopting capacity to transform, investing in long-term solutions, and automating processes to enhance efficiency.


Read Also: A Guide to Building Warehouse Management System for Retail Businesses

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