Singapore is seeing exciting times. Despite a sluggish global economy, the Association of Southeast Asian Nations (ASEAN) is emerging as a centre of growth, powered by a rapidly expanding middle class. Asia’s middle class consumer population accounts for around 30 per cent of the global middle class. This is expected to increase to more than 50 per cent by 2020, driving more than US$2 trillion in consumption in Southeast Asia alone.
To exploit this rapid growth, manufacturers, brands and retailers wield increasing pressure on supply chain and logistics networks as they scramble to fulfil expanding consumer demands.
As Singapore’s internet penetration surges to 82.5 per cent in 2016, consumers will expect the convergence of online and offline sales channels to create omni-channel customer experiences. This necessitates a new generation of logistics networks that “enable a single integrated channel of product flow”, says Singapore Deputy Prime Minister Tharman Shanmugaratnam.
Enter Smart Logistics.
Part of Singapore’s Smart Nation plan, the Smart Logistics initiative charts a path for the development of a cutting-edge logistics network in Singapore. It aims to harness a suite of new and developing technologies to allow cargo owners and third-party logistics service providers to gain greater visibility into their supply chains, and share resources to create more efficient logistics networks.
As well as improving customer outcomes, Smart Logistics technologies could deliver significant cost reductions for logistics service providers operating in Singapore, with projected annual savings for Singapore’s logistics industry tipped to be around US$56 million and a productivity gain of 4 000 man-years that stands to be reaped.
The technology powering Smart Logistics
The Smart Logistics initiative seeks to leverage new technologies in global freight to drive efficient end-to-end supply chains that will be capable of serving growing consumer demand for years to come.
The first step will be to solve current inefficiencies in existing distribution networks through the use of data analysis to increase collaboration between freight companies. New data exchanges will share information about delivery routes, types of goods, and delivery schedules amongst companies, government agencies and logistics service providers, with the goal of optimising delivery processes.
For example, companies may choose to use data exchange networks to coordinate their delivery schedules to selected time zones, and share delivery vehicles, drivers and warehouses to cut costs and increase efficiency.
Another problem the industry comes up against is the lack of real-time tracking capability to monitor sensitive goods during transport, leading to loss of inventory and fulfillment delays. The Smart Logistics initiative aims to solve this by establishing sensory networks in airports and seaports that will use radio frequency identification (RFID) sensors to track the status of cargo in real time.
This will give cargo owners and logistics service providers increased track-and-trace power across the entire supply chain and enable them to monitor environmental conditions for sensitive goods during shipments.
They will be able to identify supply chain problems and intervene in near real time to address fulfillment delays, prevent loss of inventory through damage during shipment and remove the need to hold excessive inventory across the supply chain. Monitored shipments are also expected to reduce insurance costs for companies due to a lower risk of shipment failure.
Eliminating human error and easing the drain on human resources in the warehouse is another area that the Smart Logistics initiative is looking at.
The Internet of Things (IoT) will also play a central role here as internet-connected warehouse equipment such as pallet dollies and forklifts reduce the burden on ground handlers to manually keep track of shipments and provide them with greater insight into the location, condition and status of ingoing and outgoing goods.
Smart logistics in practice
While RFID-equipped sensory networks and data exchanges are still concepts under development as part of the nation-wide Smart Logistics initiative, major supply chain management companies are already exploring the vast potential smart logistics holds.
One example is CEVA Logistics’ Mobility Suite – a multi-platform smartphone application that comes with features such as real-time shipment milestones, electronic signatures, delivery performance, driver availability, trip status, current location visibility, dynamic dispatch, mobile dashboard and reporting, electronic checklists, delivery receipts and damaged goods workflow management.
“With this Mobility Suite, we are able to provide ‘smart communication’ from goods to containers to give our customers visibility and control of their supply chain, and increase efficiency of their supply chain performance,” says Priyo Ghosh, vice president of IT, South East Asia, CEVA Logistics.
“At CEVA, we evaluate technology and innovation with its purpose and the value it offers. The innovation has to be relevant to the company and how we improve the way we work, or to customers so we can add value to their business or operations as a service provider.”
In line with that philosophy, CEVA Logistics has also developed a Matrix Warehouse Management System (WMS) that brings smart logistics to life by automating key warehouse management processes.
“Within the warehouse, instead of traditional pen and paper, or handheld computers and barcode scanning, we use voice-picking technology to optimise operations with high pick volumes and pick intensity,” says Ghosh. “This provides our customers with greater control of procurement, manufacturing and distribution activities in their supply chain management.”
The technology allows the operator to receive instructions from CEVA’s WMS via a headset instead of a display on the radio frequency terminal, and the picking tasks can be confirmed by voice or by scanner.
“It enables hands-free work, which is especially useful in operations handling a broad range of box shapes and sizes or heavy products,” he says. “It is a smart yet cost-effective way to implement smart logistics.”
Singapore’s Smart Logistics initiative is also expected to enable cross-corporation partnerships as logistics providers come together to create collaborative distribution networks powered by the latest data analysis, RFID and warehouse automation technology.
Developing a smart logistics ecosystem
Looking to the future, Ghosh predicts that cloud-based track-and-trace technologies with RFID tags, barcoding and GPS tracking, supply chain management automation managed with better processes and richer intelligence through big data, and cloud-based optimisation and risk management software will become more prevalent as Singapore moves to develop a smart logistics ecosystem.
“Singapore wants to create the first Smart Nation in the world. Transportation and logistics is an integral part of the economy, so it is only logical for the country to want to invest in a Smart Logistics initiative. There is tremendous potential for the logistics industry in this and many opportunities to grow our business,” he points out.
Smart logistics is really about using smart technologies to create new or better solutions. Innovation in logistics does not change the industry’s fundamental needs. Rather, it enables enhancements in our service solutions, improves efficiency in our internal processes, and creates new value by adding features to drive better performance, productivity and profitability in supply chain management.
And as Singapore moves deeper into the smart logistics ecosystem, it will continue to act as a key operational base for multi-national companies seeking to improve their local logistics networks and expand their presence in the rapidly growing Asian region.