Innovations are needed to ensure the continued smooth operations of companies in the logistics and supply chain industry, in the wake of the Covid-19 pandemic.
The pandemic has disrupted the movement of goods in the global supply chain due to lockdowns, restrictions, closure of businesses, closed borders, quarantine and other requirements.
WOU School of Business & Administration (SBA) lecturer Dr Kan Wen Huey was speaking at an online talk on “Impact of Covid-19 on the Logistics and Supply Chain Industry and Malaysia’s Response”. About 30 people attended the talk organised today by the Penang Regional Centre in collaboration with the School.
She highlighted the extreme challenges facing the logistics industry, namely the rise in e-commerce because of changing consumer behaviour, a new factory environment due to social distancing, and restrictions on the movement of goods from increased border controls. She said these are leading to longer waiting times for overseas parcels and delayed delivery. This scenario is expected to continue into 2021, and so logistics companies must undertake steps to maintain their service levels.
She shared recent news that the pandemic has caused container rates from Asia to Europe to climb to a 10-year high, a container shortage crisis for intra-Asia trades, and that the trans-Pacific container freight rates have gone up to 184%. She said that the freight rate increase will persist due to the restrictions on the global movement of goods.
Dr Kan stated that the logistics operations in the country are also affected by the closures of business, the stoppage of factory outputs, and the disruption to global manufacturing industries and their supply networks.
She highlighted that the future for logistics is in digital transformation with IR 4.0, supply chain diversification, and the on-shoring of production.
She offered a few actions for logistics companies to take in the wake of the pandemic: using integrated logistics control tower for real-time monitoring of freight; knowing their inventory and capability so as to balance supply and demand; effective proactive communication with on-site and remote workers, suppliers, carriers and customers; and companies to provide physical and mental support to the logistics workforce.
Dr Kan urged logistics companies to think creatively and build their business model to improve efficiency.
During Q&A, she elaborated on the interdependency of different entities, like government directives, shortfall in supplies, disruption to distribution, new work environment, changing consumer behaviour, working from home and students learning online, and how they affect the logistics and supply chain industry. She stressed, “Logistics workers must therefore help companies respond to these changes.”
She said WOU graduates in logistics and supply chain management can work as purchasing agent/manager, operations manager, logistics analyst, supply chain manager, logistician, production and planning expert, and storage and distribution manager.