In AIBP Insights Thailand’s penultimate session on supply chain optimisation, our discussion broached the topic of overcoming supply chain disruption with speakers from C.I.T Corporation, CP Foods (CPF), Indorama Ventures, Kerry Logistics, Sime Darby Plantation and Thailand Post sharing their experience and considerations for technology investments in supply chain optimisation. Qualcomm was also present to give inputs from a solution provider’s point of view.
AIBP Insights is a series of country-focused sessions held online which brings together a focus group of ASEAN stakeholders to discuss topics related to enterprise technology adoption in the region. AIBP Insights is held across Malaysia, Philippines, Indonesia, Thailand and Vietnam over a course of 5 weeks. The agenda is available here.
The Role of Technology in Supply Chain Optimisation and Responses to Developments in 2020
2020 has been a period of rapid adoption of digital solutions for enterprises and their supply chains due to social distancing regulations during the COVID-19 pandemic. As Goh Thih Liang, Country Director of Malaysia, Thailand and Philippines, Qualcomm shared, solution providers like Qualcomm are engaging in discussion with telcos in the region to evaluate what can be done with existing 4G technologies and how it will advance to 5G technologies. The low-latency provided by 5G will greatly improve supply chain operations by providing real-time and immediate asset-tracking and monitoring.
Digital adoption is now a necessity for supply chain optimisation and for enterprises to survive. Key objectives in supply chain optimisation include speed, productivity, smoother processes and data accessibility.
Meeting Changing Demands
Both Sangkom Kositwiwat, Regional IT Director, Kerry Logistics, and Ariya Thongbai, Senior Executive Vice President, International Business, Thailand Post, observed the spike in fulfilling deliveries for online shopping and the importance of remaining competitive in the saturated logistics business.
Sangkom also observed that corporate clients also wish to employ technology for smoother business processes and obtain real-time information. Thailand Post has enabled visibility and tracking services in real time and automating internal processes. However, Ariya mentioned that cross-country postage has been impacted by international network difficulties due to a decrease in flight frequency around the world.
For Sime Darby Plantation and CPF, supply chain processes have shifted to reduce dependence on manual labour on-site by incorporating automation and IoT prior to the pandemic and were thus prepared for Covid-19 worker restrictions. Preparedness and foresight is key.
Their digital adoption and usage does not stop there.
Azli Razali, Head of Sime Darby Oils, Philippines, Sime Darby Plantation, was surprised by the increase in demand for oil and shared that the business will be accelerating digital initiatives for B2C to reduce distance to the market and manage spikes in demand.
Thossaporn Petporee, Senior Vice President, Business Development, CPF, shared that CPF is constantly developing technologies, for example they are currently in the midst of upgrading their robots used in factory operations to respond to different patterns with AI. He also highlighted the importance of supporting and working with their customers and vendors involved in the long and complex supply chain. The company is helping small independent restaurants and ingredient vendors to keep up with more advanced companies by providing technology like GIS.
The critical role of integrated, accessible data in managing supply chains was highlighted by Shiv Kumar Srivastava, SVP-IVL Corporate IT, Indorama Ventures who shared how an integrated digital core platform for IVL allowed for better accessibility to real-time data to support business processes and reporting across various plants in different countries.
For family-owned C.I.T Corporation, Santi Srivicharnkul, its Chief Executive Officer sees many opportunities in working with startups across different countries to create revenue streams from new value propositions.
Considerations for Technology Investments
As usual, ROI is a key consideration – what is expected of technology investments? The focus of our panelists today also broached considerations for the business value, time horizon and employee receptiveness of technology. Azli also mentions that the pandemic is unexpected, and companies will benefit from setting funds aside for investments in technology to keep up with competition.
The panel agreed that considerations for technology investment varies for businesses of different sizes and in different industries. Thih Liang mentioned that for Southeast Asia, a lot of technology investments come from SMEs looking to cut costs and labour with technology like remote monitoring and video analytics.
Large Businesses vs SMEs
For SMEs like C.I.T Corporation, their smaller size is a double-edged sword. While they may lack funds, manpower and technology, they are more nimble, have a clearer view of what their business requires and are more responsive to change. Unlike C.I.T, Thailand Post is both large and state-owned. While business processes have evolved, Ariya notes that as an SOE, budgets and projects must be proposed years in advance, which, by the time of approval, may become obsolete. To address this challenge, Thailand Post invests in areas of urgency and is open to business alliances.
The Time Factor
Our panelists also agree that now is a prime time for technology investments considering that new regulations in Thailand are in support of technology adoption. There is a clear need for change. However, they also agree that in these trying times, the condition of the company must be considered – is it a matter of survival? What business value will it bring? Is the company capable of adopting technology? Santi believes that a good business case will support technology investment pitches.
Time horizon was also mentioned a lot by our panelists. The general consensus is that ROI will not be immediate – technology adoption is a long journey that affects core business processes. As mentioned by Santi and Shiv, initial investments in laying the foundation for technology adoption will not see returns. The key lies in adopting a long-term view of technology investments.
Thossaporn shares how technology adoption is done in phases at CPF where global rollouts of projects involve significant investments – idea generation and business considerations for the true benefits. In a similar vein, Sangkom brings up an important point – the problem now is to use technology to achieve a competitive edge and make it meaningful for the company, both of which goes beyond simply adopting technology.
An Enterprise’s Most Important Asset: the People
The people are as important, if not more, than technology itself. Azli observes that technology adoption will be affected by a younger employee base. Likewise, Thossaporn shares how CPF provides employees with opportunities for project ownership and for proposing ideas. Shiv highlights the importance that Indorama Ventures places on investing in their biggest asset, the people. For Indorama Ventures, a key success factor for digitalisation lies in providing learning and development opportunities for employees, connecting and listening to establish a mutual understanding and fine tune digitalisation processes with their feedback.
In sum, the role of technology in supply chain optimisation lies in enabling adaptability and quicker responses to supply chain disruptions, and this role will only become increasingly important. In difficult times like today, being open to technological changes that add value and fit into their business models and processes will benefit enterprises in the long run even as ROI may not be immediate or quantified.
We will be hosting AIBP Insights sessions for Vietnam next week. Feel free to drop us a note at email@example.com if you are interested to attend the sessions.