Digitize ASEAN 2019: Digitisation of supply chains key to region’s integration efforts

Supply chains will play a big part in helping connect ASEAN’s digital economy in the coming years

Supply chains were viewed as support functions in the past, but today they have become a key part of companies’ strategies to transform themselves for the digital age. While many new technologies are emerging in the supply chain space in ASEAN, a strong digital infrastructure has yet to be established to let businesses fully benefit from digitalisation.

These and other issues related to the integration of ASEAN’s digital economy were discussed at the Digitize ASEAN 2019 conference organised by the Singapore Business Federation and ASEAN Business Advisory Council (ASEAN-BAC) on September 30.

Professor Andrew Lim, Head of Department of Industrial Systems Engineering and Management at the National University of Singapore, said that with countries in ASEAN at different levels of development, rolling out technology that can better connect the region to harness the power of supply chains will be challenging.

“The beauty of ASEAN is that it is very diverse; we have very advanced cities and some that are not so advanced. So that is very attractive and at the same time very challenging,” said Prof Lim.

However, Dr Robert Yap, Chairman, ASEAN-BAC Singapore, argued that trying to link ASEAN’s supply chains through technologies might be an easier prospect than doing so through physical infrastructure. He said that with a strong digital infrastructure, companies in the region can better capitalise on the trend of more manufacturing activities moving into ASEAN as a result of the US-China trade war.

Mr Arne Jeroschewski, Founder & CEO, Parcel Perform, agreed that there was a need to digitalise supply chains in the region in order to reap the benefits of an optimised network. The company offers a parcel tracking service for merchants worldwide. “As long as every element of the supply chain is not digitalised, you won’t get very far because you can’t be optimised; you can’t use AI because you don’t know what’s going on,” he said. He added that a digitised supply chain will allow businesses to have real-time visibility on what’s happening in their specific networks.

To spur digitalisation, ASEAN will also need to do a better job of attracting funding. While the region’s dynamism, coupled with its rapid adoption of digital technologies, is attracting a lot of investment in the consumer space, it still lags when it comes to the business-to-business segment compared to China and India, said Michael Sugirin, Global Head, Open Account, Ecosystem and Trade Implementation at Standard Chartered Bank.

Slowing growth a risk

Earlier in the conference, Minister of Trade and Industry Chan Chun Sing spoke of the need for greater integration to spur growth globally. “We now have to decide whether in the next 10 to 15 years, we will go on a higher growth trajectory with greater integration or we end up in a slower growth trajectory because the world will be much more fragmented than what it is today,” he said in a speech.

He noted that if the world opts to be more integrated digitally and financially to achieve higher growth, data will be of utmost important. “On the other hand, if we are unable to integrate digitally but instead if we are fragmented digitally, then we will certainly be fragmented financially and as a global economy.”

ASEAN-BAC 2019 chairman Mr Arin Jira said that investing in workers’ skills was a pre-requisite for competing in a digital economy. To this end, the ASEAN Research Centre to develop solutions for challenges that businesses in the region face was launched at the event.

In its third year, Digitize ASEAN brings together key industry players from both the public and private sectors to share insights on current digitalisation trends and their impact on businesses in the region.

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