By Mr Lieu Yew Fatt, Managing Director, Omron Electronics Singapore
The e-commerce industry is going through explosive growth in recent years fuelled by rising Internet penetration and a rising generation of more affluent, web-savvy middle-class consumers. In Southeast Asia, the e-commerce retail market size is projected to grow to US87.8b (S$117.4b) by 2025. This stood at US5.5b just three years ago in 2015.
Consumers are embracing e-commerce and have come to expect the modern day online retail experience, which is associated with affordability, convenience, flexibility, speed and transparency.
They are also getting accustomed to e-commerce retailers promising fast delivery, tracking of shipment at every stage and low (or even no) delivery charges.
Naturally, logistics industry players are facing tremendous pressure to meet this expectation. It is no wonder that logistics companies in this region are looking to strengthen their operations.
“Industry 4.0 could boost the total manufacturing output in Singapore by $36 billion, enhance labour productivity by 30% and add 22,000 new jobs by 2024.”
Many are looking to better utilise of automation and digitalisation to see if they can better run their operations. They are especially exploring newer technologies like artificial intelligence (AI), automation and robotics, data analytics and Internet of Things (IoT).
Vanguards in the Industry 4.0 transition
Singapore is ideally-placed to capitalise on the advances in technology and tackle today’s logistical challenges with its robust infrastructure and geographic location.
The Port of Singapore is among the busiest transhipment ports in the world, and recognised as the Best Seaport in Asia by the Asian Freight, Logistics and Supply Chain (AFLAS) Awards.
With connections to 600 ports and access to daily sailings to most major ports in the world, logistics companies in Singapore enjoy the flexibility of choosing the best and quickest way to get their goods delivered to customers.
The Port is also equipped with advanced technology that boosts the efficiency of operations. The highly-praised Flow-Through Gate, a fully automated and centralised system that enables trucks to obtain clearance into the port within 25 seconds, is an ideal example of automation enhancing the efficiency in logistics.
This potentially increases the speed of which goods are transited to the next node of the delivery process and getting parcels delivered to customers quicker.
Clever plans for a smart nation
In recognising the role that technology, robotics and automation play in addressing the demand for more efficient and effective logistics, the Singapore government has embarked on several initiatives to promote a culture of digitalisation among local businesses.
The Economic Development Board recently published The Singapore Smart Industry Readiness Index, a whitepaper that illustrates the government’s efforts to capitalise on the Industry 4.0 trend and transform the manufacturing landscape in Singapore.
In this whitepaper, the government shared its Index Framework (Figure 1), which consists of three building blocks and eight pillars that can guide businesses to digitalise their processes and thrive in Industry 4.0. Logistics businesses can use the framework as a guideline to take the necessary actions to establish themselves as an Industry 4.0 company.
Another government body, the Infocomm and Media Development Authority (IMDA), has produced an Industry Digital Plan specifically tailored for SME logistics companies. Part of the Industry Digital Plan is the Productivity Solutions Grant that funds 70% of a business’ purchase of advanced technology solutions. This plan helps small logistics firms adopt digital technologies, including robotics and automation, to address the challenges ahead.
Senior Minister of State Dr Koh Poh Koon reaffirmed the government’s commitment to digitalise Singapore’s logistics industry when he recently expressed national support for the Container Depot and Logistics Association (Singapore)’s (CDAS) launch of its Transport Integrated Platform (TRIP) – a common platform that enables most logistics operators to communicate through a single node.
Through this development, stakeholders along the supply chain can coordinate cargo movements and exchange vital information more efficiently due to the elimination of manual processes and disparate communication systems that lack interoperability.
Logistics businesses stand to benefit tremendously from this centralised system as operations and collaborations between warehouses, delivery vehicles and container vessels become more efficient and productive.
Private sector initiatives are key
The onus is, however, on logistics businesses to capitalise on Singapore’s strong foundations and proactively seek ways to digitalise operations.
YCH, one of the leaders in the supply chain industry, is an example of a local company that has prepared itself for Industry 4.0 by accommodating advanced technologies in its operations. Last year, it opened the Supply Chain City, a 2 million square-foot facility that utilises technologies such as inventory-counting drones and advanced robotics. YCH’ desire to continuously improve by accommodating technology has seen it propel from a transportation company to an industry leader.
With technology advancing rapidly and manufacturing playing such a large part in Singapore’s economy, local businesses and their customers are set to enjoy the benefits brought about by augmenting logistics with robotics and automation.
Arguably one of the principal demand generators of logistics, manufacturing output (excluding biomedical) increased 8.9% year-on-year as of February 2018 according to a report by the Economic Development Board.
The future of manufacturing looks brighter than ever as Industry 4.0 could boost the total manufacturing output in Singapore by $36 billion, enhance labour productivity by 30% and add 22,000 new jobs by 2024, according to a study by the Boston Consulting Group.
Apart from public sector initiatives, logistics businesses can garner support from organisations like Omron, which has recently launched the Automation Centre (ATC). Apart from showcasing state-of-the-art technology such as smart assembly lines and mobile robots, the ATC is open to organisations in the logistical supply chain who are keen to prototype and test smarter solutions.
Since its launch in September 2017, Omron has been collaborating with solution partners in test bedding advanced technologies such as 3D Vision, in addition to automation of logistical operations such as bin picking and optimisation of goods delivery in warehouses.
These are the type of advancements that are expected to help logistics players in Singapore keep pace with the rapid evolution brought by the expected burgeoning e-commerce scene and Industry 4.0 trends.
Riding the Industry 4.0 wave
Singapore enterprises in the logistics industry are well positioned to ride the wave of Industry 4.0 – the fourth industrial revolution where machines and humans interact together through intelligent networks.
Businesses here benefit from strong infrastructure and economic framework already in place. They also have ready access to a technologically supportive environment.
This has not gone unnoticed of course. According to a recent World Economic Forum report, Singapore is among 25 countries that stand to benefit the most from advanced manufacturing and smart factories. The country is also ranked second by PWC as a world business hub.
What is important is that logistics companies here capitalise on the available opportunities. They need to strategically adopt technology to effectively cater to the demands of the modern consumers.
In a nutshell, they need to continuously strive towards excellence in their operations and service delivery, as well as ensure that they are constantly adding value to the supply chain.