Posted on June 2019 By Ben McDonald
Published by: Ben Mcdonald- Director - Supply Chain & Procurement, Singapore & Asia Growth Markets
Tel: +65 9807 3174
One of the great achievements of the 20th century was the establishment of truly massive economies of scale. Improvements in transportation technology and political coordination allowed for a massive revolution in global efficiency, affecting everything from material sourcing to production, logistics, advertising and much more.
Rather than sustaining this trend of efficiency through mass production and distribution, the 21st century is well on its way to reversing it. Precisely targeted, personalised advertisements in the digital age are replacing the mass marketing tactics of yesteryear. Individual, custom purchases are now routinely made online, necessitating complex delivery systems that put products right on customers’ doorsteps.
This move from globalism to multi-localism should not be seen as a regression. Instead, it is an indication that production and tracking technology have both advanced to a stage where the intermediary steps between the manufacturer and the end consumer can be partially bypassed. However, this new status quo puts considerable pressure on the logistics effort, in both the short and the long term.
At the same time, developments in world affairs only add to the challenge. A new wave of political movements is pushing for increased tariffs and shake-ups of international relationships, forcing manufacturers and logistics players to alter their supply chains. Moreover, the rise of developing economies – particularly in Southeast Asia – creates an additional demand for qualified logistics teams in new regions. These teams now face the difficult task of handling increased volume while simultaneously navigating seismic shifts within the industry.
Opportunities and challenges surrounding multi-localism
In Southeast Asia specifically, a decentralisation has occurred regarding supply chain and procurement functions and roles. Companies are beginning to downgrade their presence in Singapore, in favour of more in-country roles that will allow them to work more closely with regional business units.
This new preference for establishing local operations in other countries also allows companies to be present in markets with high growth, while enjoying lower overhead costs. In addition, having a local office enables a more efficient reporting line within the organisational matrix. Perhaps most significantly, companies with local representation can mirror the personalisation, customised service, cultural sensitivity and observance of local customs that the current generation of technology is also making possible within the manufacturing and advertising industries.
These benefits, however, depend on maintaining effective and efficient operations in areas where quality talent is increasingly hard to come by. The very newness of these growing markets in the logistics sector means that experienced team members are few and far between.
To develop the necessary talent over the long term, countries across Southeast Asia will need to offer greater expertise in logistics and other related industries within their higher education institutions. The fastest way to catch up with fully developed countries will be to learn from them directly, by hiring highly experienced educators to train the next generation.
In the short and medium terms, companies can meet immediate needs through aggressive recruitment as well as international transfers involving foreign logistics team leaders. Companies can also send their logistics personnel overseas, to learn from high-functioning organisations abroad and bring back the expertise that is in such high demand across the region.
As demands for both speed and flexibility increase, businesses across Southeast Asia will put a premium on high-quality logistics talent. A considerable effort will be needed to prepare the next generation of logistics managers for success throughout the region – but with such high potential rewards for efficient performance, the investment will be repaid many times over.
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