Global businesses commonly centralise and consolidate logistics and supply chain management functions in a secure location that can access a broad region. Singapore is one such location, given its extensive connectivity, innovation ecosystem, and the availability of an experienced workforce, consultancies and other supply chain support services.
While there is a need to tailor supply chains to individual Asian markets, it is necessary to build competitive advantages and generate efficiencies from coordinating regional operations from established operational and technical hubs overseeing supply chain networks in Asia. At the same time, logistics firms need to prepare for the impending disruption posed by 3d printing technologies.
Centralising supply chain management into a hub is popular and a necessity for technology and industrial businesses. Iconic consumer companies, such as Nike and Unilever, have establishes a presence in the city-state to reach their global markets, as well as leverage on the strong connectivity and logistics that the city-state offers.
According to the Singapore Economic Development Board (EDB), Nike established its global trading hub in Singapore to leverage on the financial, legal and logistics strengths. From their base here, they undertake centralised global product sourcing, logistics and brand protection. Unilever centralised its logistics leadership for the Asia Pacific (APAC) in Singapore, managing end-to-end supply chain functions and reducing the overall costs involved.
But with the disruption that 3d printing will also cause to manufacturing and the associated infrastructure (i.e. supply chains) and networks that sustain it, the changes that occur will require strong ecosystems of supply chain management experts, consultants, technologists and resources. Logistics solutions must be tailored and adapted for specific industry verticals, especially for growth sectors like robotics, drones, 3d printing materials and more.
Government commitment and careful planning, as well as additional investments, will be required to create infrastructure and industry ecosystems resilient and robust enough to adapt to the disruptions that new technologies brings.
Among the most significant investments in the region – though nowhere near as massive as Indonesia’s upgrades to its port infrastructure – is the consolidation of Singapore’s port facilities into a single mega-port in the Tuas industrial zone. This is a long-term investment aimed at hosting and supporting large-scale supply chain management operations, expected to begin operatiion by 2024.
With the growing middle class of the region and corresponding increase in business activity, increasingly complex logistics will be required to negotiate the vagaries of ASEAN emerging markets. The potential for business growth is tempered by the challenges that dynamic markets like Indonesia and the Philippines inherently pose.