Singapore: How to transform supply chains and get logistics fit for the future

Companies face great challenges to adapt supply chains to meet latest customer expectations. What can governments do to support? Singapore leads by example.

20December 2017

Have you tried Amazon’s Prime service? Order now and your purchases will be delivered to your door within 2 hours, free-of-charge. In Singapore, this service was launched in July and by now, most of the initial start-up issues have been ironed out.

I ordered an electrical toothbrush last month and 1.5 hours later, there was somebody on my doorstep holding an (Amazon-branded) recycle bag with my brand-new device in it. Wow. What an excellent job – and definitely an all-time record in my personal online shopping experience.

Services like these are a direct result of continuously increasing customer expectations that push logistics service providers to improve their lead times. Singapore has built a strong reputation in this area and has been the number one logistics hub in South East Asia for many years now. And the government is not planning on letting go of this top rank position any time soon.


Innovation centers for next generation logistics

Last August, I visited “Supply Chain City”, a S$200 million logistics facility in Singapore. It features the latest automation systems and technologies including RFID, and an automated storage and retrieval system. The center is also a test playground for autonomous vehicles and drones, as well as for augmented and virtual reality systems.

Supply Chain City also houses the community platform Supply Chain Asia (SCA) as well as their recently opened Supply Chain & Logistics Innovation Playground (SCLIP). Visitors of this innovation center get to experience real-life demos and can explore latest logistics and supply chain technologies and solutions.

These projects came to life with the support of government programs that aim to strengthen the regional logistics hub position over the next decade. In a country surrounded by highly competitive high-growth regions including Indonesia, Malaysia, Thailand, etc., it is key to invest in modernizing the logistics sector now to avoid losing ground to markets that benefit from low-cost labor and lots of space to build logistics hubs and other facilities.


How the Little Red Dot manages its challenges

Globally, Singapore is the 4th most expensive country for logistics. The island state is faced with challenges that other countries don’t have to deal with. Through innovation, Singapore has found new ways to master local challenges such as land constraints and costly labor.

You won’t find many other places with multi-story warehouses and distribution centers that efficiently move tons and tons of goods, people, and equipment over 4 or 5 levels connected by ramps. But even though these warehouses are often located near border areas where more land is available for lease or sale, land prices are still sky-high. As a result, warehouses and distribution centers are built vertically instead of horizontally to save space.

Technology – robots and storage automation systems and the likes – is also a key aspect to beating costly manual labor and staying competitive. Technology adoption rates are therefore much higher in Singapore than in other South East Asian countries.


The roadmap to excellence: Latest initiatives

The Singapore government has launched many new supply chain and logistics programs this year. All these initiatives have a common goal: advancing the supply chains of local small and medium-sized enterprises (SMEs). Each of these programs also forms part of Singapore’s industry transformation map for the logistics sector. The most recent programs announced include the following:

  • Logistics Alliance: This alliance brings together 6 logistics associations to work on initiatives such as the adoption of emerging technologies and a common transport platform. This includes an integrated container truck tracking system and container truck route coordination based on depot processing schedules. Another focus is on the development of training programs to improve knowledge in the logistics workforce and grow the talent pool.
  • Next generation start-ups in supply chain and logistics program: This program is linked to the Supply Chain & Logistics Innovations Playground and will groom 12 start-ups over a period of 18 months by supporting them in piloting solutions for the logistics industry.
  • National skills framework: This initiative aims to accelerate the transformation of the logistics sector by identifying job roles, career pathways, and upgrading existing and emerging skills required in logistics (such as statistical analysis, automation design, and cloud computing) that can help the sector grow.


It’s your turn now: Making the most of frameworks

It is great to see such a strong government support for Singapore’s logistics industry. For businesses that have not yet started to engage and get involved, it’s high time now. I believe that in today’s fast and dynamic global markets, it’s crucial for governments to get involved to support its key industries advance, develop, and keep their competitive edge in the global race.

In my view, Singapore is truly leading by example in this area – especially in logistics and supply chain management. I will follow these developments and hope to see many companies taking advantage of the benefits these programs entail.

Is your company already reaping the fruits of these government initiatives? It would be great to learn more about how these programs have improved your logistics processes and supply chain performance. Feel free to post a comment here or get in touch with me through LinkedIn.


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