How do you think the Singapore business and supply chain landscape has developed in recent years?

The recent years have been challenging, yet promising, for Singapore. The pandemic and global geopolitical tensions have put pressure on the business landscape, in particular the supply chain. For example, the pandemic saw major disruptions to global supply chains where port congestions, manpower constraints, and container imbalances disrupted the delivery of food supplies. Singapore had to diversify its food sources.

Today, while the supply chain crunch has eased, companies in Singapore, including those in the chemical and materials sector, now recognize the importance of managing trade and supply chain issues against disruptions. The supply chain of the past, where companies sold products and services through linear value chains, is no longer viable. Innovation and various disruptions have pushed companies into a new supply chain model leveraging digital ecosystems and market networks allowing hybrid forms of cooperation and competition. However, developing such end-to-end supply chains and operations strategies can be challenging. What are some of the key focus points for supply chain transformation in the region?

There are three key areas that companies can focus on to drive transformation for their supply chain. The first is end-to-end visibility. We will see linear supply chains evolving into fully networked ecosystems of suppliers, carriers, and companies working together.

The second is improving execution efficiency. With rising inflation impacting borrowing, companies are looking at strategies to optimize their investments. These include whether to invest in an advanced planning capability, optimize supply in terms of sourcing, convert existing factories into smart factories, or embark on automation and digitalization for fulfillment.

The third key is an enterprise-wide technology refresh, where companies harness technology to enhance their operational processes, including their supply chains. A key component to this is a skilled workforce to implement sophisticated automation and analyze the data.

For this, the workforce needs to reskill or upskill. Singapore is a frontrunner in this – actively driving national productivity, offering incentives for companies to tap on to participate in workforce upskilling and reskilling, so workers and corporates can reap the economic gains together.

Additionally, with sustainability becoming a key boardroom topic and regulatory concern, companies should consider their supply chains from a sustainability and environmental, social, and governance (ESG) perspective. Do you see AI having an impact on supply chain management?

AI is increasingly being used in redefining and managing supply chains. During the pandemic, some companies could not go into production as their raw materials were stuck at various distribution points. They realized then that they lacked contingency plans, overlooked market variation, and did not make timely decisions. Companies started questioning how much of these risks can humans constantly monitor. Embedding AI into supply chain is often referred to as a self-healing supply chain, where AI effectively identifies a problem and fixes it. With more success stories about self-healing supply chains, AI is increasingly being built and adopted at an enterprise-wide level.

Large enterprises today are pushing for 50-60% of their key decisions to be AI-assisted or fully automated. The success of AI is driven by technological advancement and by demand. For example, the number of AI-driven tools that emerged for the supply chain market over the last three years eclipses those from the decade before. The surge in demand for AI is leading to better outputs and outcomes. Can you comment more on the ESG regulatory framework in Singapore? And how does sustainability play in supply chains?

The Singapore government has been implementing regulatory frameworks progressively by offering businesses the opportunities to enhance their ESG capabilities while supporting them in cost-effectiveness. The challenge for companies revolves around strategizing, embedding, and implementing ESG considerations into their processes.

Supply chains are sustainability’s new frontier. They are core activators for organization-wide sustainability goals and commitments. An EY survey found that while many executives have long-term sustainability goals for their supply chains, few have the visibility, technology, and comprehensive programs in place to measure progress. Challenges include upfront costs and a lack of a clear business case to support the expenditures.

Focusing on supply chains is key to overall ESG efforts – over 90% of an organization's greenhouse gas emissions and 50-70% of its operating costs are attributable to supply chains. Hence, organizations need to embed sustainability into supply chain operations.