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Logistics industry well-placed to overcome disruption challenges

Five business leaders discuss the trends facing the logistics sector as it confronts new technologies and innovation

Delivery logistics continue to flow in new directions led by e-commerce and online innovations. Will small- and medium-sized enterprises (SMEs) be able to survive and thrive? Will new jobs come fast enough as traditional ones disappear? Business leaders share their views on opportunities and challenges in the logistics/supply-chain sector in a round table.

QUESTION: What are the key challenges facing the logistics sector in Singapore and the region?

ROBERT DE SOUZA: The main challenges include those of cost competitiveness and productivity, maintaining excellence in service and quality, gaining visibility across borders and navigating complexity in the region. The overall challenge would be to maintain economies of consolidation from first to the last mile, both fast and cheap.

KEN KOH: If we want to continue as a logistics hub, we have to continually improve productivity, innovate and have a well-trained workforce with relevant skills for the industry. The cost challenges are largely land cost and labour cost, an ageing population and a shortage of skilled and specialised logistics talents.

PANG MEI YEE: We have a region that is diverse in infrastructure, language and culture. As a global logistics player, we put in a lot of effort to ensure consistency and excellence in quality in our operations across markets.

POH CHOON ANN: Singapore is an island with land scarcity and high population density. We need to optimise and lower the costs of freight, warehousing and transportation while offering better quality in services.

HENRY LOW: As the customer continues to get more tech-savvy, it is no surprise that there is a need to continue increasing speed, flexibility and customisability.

Q: How will tech disruption affect industry players?

PANG MEI YEE: The industry will be much more digitalised and connected, which leads to a more visible supply chain. Logistics assets will be much better utilised as companies learn how to share effectively.

KEN KOH:There will be lower barriers of entry due to technology changes in processes and way of doing things, which in turn also affects regulatory laws.

POH CHOON ANN: Automation and robotics will revolutionise the logistics sector by lowering costs. The bigger players, unlike smaller firms, will have the advantage in the application of automation. Disruptive technology will favour the big players.

HENRY LOW: The increase in data availability is also transforming the industry as information flow and visibility enable people to share information more quickly and use that information to better plan, price and reduce waste to improve asset utilisation and increase speed.

Q: What are some new opportunities for logistics players in this age of tech disruption?

KEN KOH: The lower barriers of entry potentially allow more opportunities for start-ups. There will also be a greater drive towards collaboration and consolidation. PANG MEI YEE:The most important trends expected to disrupt the logistics industry include advance analytics, collaborative and autonomous robotics, Internet of Things, sharing economy and omni-channel.

POH CHOON ANN: With the aid of technology, the players can not only provide quality assurance by replacing the processes such as automated retrieval and storage systems - they can also offer services such as real-time parcel tracking through mobile apps and self-service portals.

Q: Will disruption lead to job loss or more jobs? What kind of jobs will there be in future logistics?

ROBERT DE SOUZA: There will be job losses, but the commonly held belief is that this should not be so due to job transitions to meet other requirements. Logistics will always be required.

KEN KOH: Lower value-added jobs will be lost and replaced by technology, but higher value-added jobs will be in areas of IT, data science, business analytics and artificial intelligence.

PANG MEI YEE: I believe in a world where we will work smarter and have much better work-life balance. Robots will take away mundane, repetitive and rule-based activities from humans.

POH CHOON ANN: It can also create opportunities for freelancers, as we can see in transportation firms such as Uber and Grab. A similar process will happen to the logistics sector.

Q: What skills will be needed for logistics players to flourish?

KEN KOH: Soft skills are critical in logistics. Newer technical skills include IT, engineering, and Internet of Things. Soft skills include project management, problem solving, communication, leadership, agility and strategic thinking skills.

POH CHOON ANN: Innovation is the No. 1 skill logistics players need to master in order to flourish.

Q: SMEs have limited budgets and resources. How can they compete with the multinational corporations (MNCs), which have more resources to adopt and use technology?

KEN KOH: I would encourage local SMEs to collaborate across industries, such as partnering and tapping global customers, who can bring them to new markets. They can also work together with foreign players whose market is not Asia. There is also the M&A route. Yang Kee has been growing inorganically via M&As locally and overseas.

PANG MEI YEE: SMEs can be a lot more nimble to pursue interesting innovative opportunities compared to MNCs. Disruptors have shown us that a good idea attracts investments and can attain success very quickly.

POH CHOON ANN: Unlike bigger players, SMEs can target smaller groups of customers with the aid of technology and are more accustomed to their needs.

BUSINESS & FINANCE