Supply Chain Trends to Watch Out for in 2023

A Forrester study found that customer sentiment in Singapore is one of the lowest among Asia-Pacific countries. However, despite inflationary pressures and supply chain disruptions, e-commerce sales in the country are expected to reach US$14 billion by 2027 — indicating a strong and growing industry. Thus, it is important to stay ahead of the latest supply chain and logistical trends.

In addition to the growth of e-commerce in Singapore, several factors shape its supply chain and logistics environment, including persistent bottlenecks, evolving needs, and government policies. To get a better idea of what’s to come, let’s examine the country’s top six supply chain and technology trends for this year.

1. More Focus on Improving the End-customer Experience
Customers have always been the driver of competition. Whether the business is a retailer, delivery service, or e-commerce provider, investing in technologies that enhance the end-user experience is now a must. Doing this may involve scaling on-time deliveries, enabling delivery visibility, or shortening delivery turnaround time. This is also critical from a business perspective.

Timely deliveries with regular updates on delivery progress through advanced ETAs increase successful first-attempt deliveries but also allow the end customer to reschedule and lower the return-to-origin instances. This allows all delivery stakeholders to pivot in a timely manner and avoid wasteful spending on reattempts.

2. Use of Platformisation to Eliminate Fragmentation
Platformisation is the process of converting a traditional business into a digital platform that brings together different parties to interact and transact with each other more efficiently. It will be a game changer for the supply chain industry, which legacy processes and siloed systems have largely weighed down. By bringing different parties together on a centralised platform, platformisation has the potential to overcome the challenges posed by legacy processes and siloed systems, improving collaboration and visibility across the entire supply chain, from first to middle to last-mile logistics.”

A platform-based approach ensures seamless collaboration between logistics partners and internal stakeholders. It enables a business to consolidate all logistics movements and monitor real-time updates and incidental charges on a single dashboard. More logistics-powered businesses will embrace smart logistics management platforms to simplify their operational management.

3. Greater Implementation of Blockchain
The use of blockchain in the supply chain to mitigate risks in cross-border trade has been steadily rising in Southeast Asia. A report by EY found that regional governments are continuing to reform legal and trade frameworks to simplify the business process. This is why transparency and collaboration must be at the heart of continued investments in infrastructure.

As an immutable ledger, blockchains instil trust, transparency, and auditability in the supply chain. It also enables easier cross-border financing and smart-contract-based payment capabilities. This results in greater efficiency and better logistical visibility. The technology will see greater adoption in times to come.

4. Increased Focus on Predictive Intelligence, AI, ML, and Process Efficiencies
A supply chain’s resilience will depend on capabilities that provide adaptability and greater agility in the face of disruption. According to a report by Gartner, by 2026, 75% of commercial supply chain management applications will embed advanced analytics, AI, and data science. Moreover, 28% of the survey respondents said they are on the verge of leveraging AI in logistics to improve process efficiencies.

Businesses can deploy AI and ML to close productivity gaps and optimise internal processes for timely delivery handovers. AI and ML technologies will help bring about self-governing supply chains and cut unnecessary costs in logistics.

5. More Reliance on Multiple Logistics Providers
Partnering with several logistics service providers ensures delivery reliability, expands serviceability, enables faster delivery times, and helps businesses scale and cost-effectively manage elastic demand. According to Gartner, logistics providers with extensive global service portfolios are best equipped to handle complex challenges, bring innovation to business, and maximise cost and service benefits.

Singapore’s third-party logistics (3PL) market is estimated to grow at a CAGR of 6.1% between 2022 and 2027, and increase by nearly US$1.36 billion. And as the demand for multiple logistics providers grows, so will the use of 3PL orchestration solutions that make it easy to manage any number of logistics providers through a single platform.

6. Emphasis on the Economic Benefits of Sustainability
Nearly a quarter of companies report increasing investor pressure to improve supply chain sustainability. Businesses can save costs and boost delivery profitability by implementing diverse optimisation strategies such as intelligent route planning, dynamic order batching, advanced territory optimisation, and prioritising eco-friendly delivery methods like electric vehicles and bicycles.

As sustainability becomes increasingly important, we expect to see more companies taking the green route in the future.

In Singapore, the logistics industry employs over 300,000 individuals, representing a significant portion of the country’s workforce and demonstrating the importance of effective logistics management for businesses operating in the region to maintain a competitive edge. AI, ML, automation, and predictive intelligence in smart logistics management systems allow businesses to transition from a reactive to a proactive approach, ultimately enabling them to capitalise on the numerous benefits of the above trends.

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