Firms tapping tech to boost logistics amid uncertainties

They can raise productivity, save money and react quickly to supply chain disruptions

Companies are embracing technology to save money, boost productivity and react quickly to severe disruptions to global supply chains, including a damaging trade war.

Multinationals such as manufacturing services firm Jabil have come up with tools to crunch data and map out alternative supply lines in the event of natural disasters or tariff measures.

In recent years, Singapore start-ups have joined the fray, looking to make logistics industries more modern and efficient.

Mr Paul Lim, president of Supply Chain Asia, said uncertainties triggered by United States President Donald Trump's trade war have made resilience an even bigger priority for businesses.

At the same time, technology is playing a key role in helping them, he told The Straits Times ahead of a two-day forum on the digitalisation of supply chains, which starts today at Resorts World Sentosa.

Mr Ng Kee Wee, vice-president of global supply chain management at Jabil, said embracing technology is the way to counter disruptions, ranging from geopolitics to component constraints, which are happening at a faster pace. Technology can provide timely information in unexpected events, he added.

When Japan was struck by a 9.0-magnitude earthquake in 2011, the company took three to four weeks to map out the impact to its supply chains, noted Mr Ng.

But it has since developed a system that analyses data ranging from global seismic events to internal information on the sources of different components, to determine within 24 hours which products will be hit by a major disaster or similar event.

Mr Ng Kee Wee, vice-president of global supply chain management at Jabil, said embracing technology is the way to counter disruptions, ranging from geopolitics to component constraints, which are happening at a faster pace. Technology can provide timely information in unexpected events, he added.

It can come up with mitigation plans within 48 hours, Mr Ng said.

The trade war and tit-for-tat tariffs are among many challenges faced by Jabil, which serves 300 brands around the world. With such challenges come opportunities for Singapore start-ups such as logistics tech firm Haulio and transport management firm VersaFleet.

VersaFleet chief executive Shamir Rahim noted that more than half of supply chain costs lie in the "last mile" of delivering goods to consumers. Making this process more efficient brings savings at a time when trade disruption between the US and China stands to raise the cost of port-to-port movement as companies find other routes to avoid tariffs, he added.

His company, which automates logistics operations and allocates drivers' route plans more efficiently, estimates that improvements to last-mile delivery bring cost savings and productivity improvements of 15 to 30 per cent.

The firm has added a further 20 or so customers to its base of 100 this year, with particular interest coming from the manufacturing sector and those in the fast-moving goods segment.

Haulio chief executive Alvin Ea noted that in spite of disruptions, intra-Asia trade has risen and Singapore companies can do more to provide services in this region.