Supply chains face the challenge of meeting the consumer’s desire for a seamless, consistent buying experience due to the high uncertainty in supply and demand in today’s environment.
School of Business & Administration (SBA) senior lecturer Stella Hoo Yee Hui was speaking at an online WOU talk on “Your Option in The Future: Supply Chain” organised today by the School and the Penang Regional Centre PGRC, and attended by 21 participants.
She said that unforeseen global circumstances, such as Covid-19, may cause supply chains to face limited financial flexibility, limited production flexibility and a lack of factory workers. “How then do we ensure sufficient financial flexibility, production flexibility and most importantly, the availability of factory workers?” she queried.
She informed that the younger generation are reluctant to work in factories, and with China’s strict birth policy, she foresees an increase in production price in the future. This will have a global impact as many factories in China receive international orders and might not be able to produce on time.
“Streamlining the operations of supply chain is the best way to bring down the overall cost of production,” she stressed. She mentioned a recent case of container shortages that led to a longer transit time for rose onions from Chennai to Thailand, thus increasing the price of onions. Another example was a large cargo ship carrying 18,300 containers that ran aground on the Suez Canal in March, blocking the passage of about 400 ships to cause supply chain delays.
As for opportunities in supply chain, Hoo highlighted the US-China trade war that had helped to increase Malaysia’s sea freight export to the US, the advanced and value-added manufacturing, and the growth of mega cargo ships. She added that robotic process automation will help to reduce manpower usage in warehouses while big data enables better forecasting for the inventory to reduce cost.
She also shared about supply chain facilities and network, elaborating that Malaysia currently ranks high as a logistics hub because of its multiracial, multi-language population who are able to network with many countries. Malaysia has plans to build an aviation hub with air cargo, logistics, aerospace and aviation services, she remarked.
Hoo said that the growing trend of online shopping because of e-commerce has created a demand for logistics in Malaysia, with logistics being a part of supply chain. “Artificial intelligence (AI) is also helping to transform supply chain worldwide. With chatbots that operate 24 hours, you can just log in to the website and trace your shipments.”
She concluded, “There is a strong relationship between world trade, GDP and supply chain investments around the world. As globalisation has increased, the world’s supply chains have become substantially more interconnected.”
Hoo said that the significant disruption to global supply chains, such as from Covid-19, has put pressure on supply chain leaders to rethink traditional distribution and supply chain models to ensure a seamless process.