This study is authored by Dr. Albert Tan, CPIM-F, an Associate Professor at the Asian Institute of Management in the Philippines.
This is the first time that we are conducting a study to identify the skills and competencies from Asia countries as most of the studies are conducted in USA and Europe. Mckinsey consultancy report in 2020 believes that leaders should take this moment not just to fix their supply chains temporarily, but to transform them during the pandemic. Reimagining supply chains to avoid past traps and meet future needs will require a more comprehensive approach in reskilling the supply chain professionals to build new competency for the new norm.
The aim of our study is to identify the business skills required by supply chain managers and leaders in Asia during the pandemic and suggest the key skills and competencies that all supply chain professionals need to acquire.
Overall findings from the interviews group by industry
Logistics industry is a very cost sensitive and customer oriented industry. It tries to keep its costs low while meeting customer expectation. During the pandemic, more workers are advised to work from home but the warehouse operations need people to move goods. Thus, the logical option is to explore automation in the warehousing together with warehouse management system.
With automation, there will be more data available for analysis to optimise its operations. Data analysis becomes another critical skills for this industry to identify performance gaps and improvement. Soft skills are also important to deal with clients as well as motivating employees. This is a labour intensive industry in Asia and soft skills are needed to handle conflicts and manage expectation with clients.
In addition, problem solving skills and customer oriented are two other competencies that the industry is expecting from the employees. They are troubleshooting issues every day and the problem solving skills are essential part of the skills to resolve the issues. Since some of the issues will affect the clients, they also need to build good customer relationship. Thus, they need to be customer oriented to retain the clients as the switching cost is low for the logistics industry.
The ongoing pandemic didn’t seem to deter Al-Futtaim Logistics in running their business operations. Quick and adaptable changes were made and its CEO, Dr. Raman Kumar commented that “At Al-Futtaim Logistics, we had a strong business continuity plan in place which allowed us to manage the crisis.” He also mentioned, “The biggest challenge we saw was the mindset of our customers, especially when it came to delivery services and the steps that would need to be taken to ensure that everyone was safe. We had to implement a new Heath Safety Environment (HSE) strategy and follow strict protocols to ensure that everyone would be protected in the work place.”
Manufacturing industry is faced with material and labour shortages due to the lockdown to prevent the spread of the virus. Most of the interviewees have indicated data analysis as one of the key skill set to better understand about their processes and customers during the pandemic. The data will help to identify sales trends and automate simple decision makings to improve productivity.
Many companies are using the data from their ERP system to analyse consumer behaviour and automate their processes in line with industrial 4.0. Soft skills are also important to manage client expectation and collaboration. It is becoming critical to collaborate and jointly forecast with customers and suppliers during this pandemic period where the supply is uncertain. Siam Cement Group in Thailand are changing some of their supply chain design and strategies during the pandemic as shown in the Table 1.
It can be seen that the supply chain previously (before pandemic) was focusing on cost saving thus supply chain strategies practices lean management in the supply chain. In terms of purchasing, offshore sourcing, single supplier and centralized warehouse were key strategies for these companies. The challenges for global supply chain during pandemic is to transform their supply chain into a more resilient one while still remain competitive. Therefore, to meet these challenges, risk mitigation must be taken into account when redesigning the supply chain network according to Siam Cement Group.
In fact, supply chain strategies will shift from cost saving to redundancy by having multiple suppliers from local or nearshore suppliers for risk in supply disruption. Partnership and closed collaborations with suppliers and customers is vital during this period by sharing resources, facilities and data to strengthen the relationship while lowering potential supply risk. The adoption of new technology is inevitable in Siam Cement Group to enhance operations efficiency ranging from warehouse operations such as such as automate warehouse, to more advance technology in transportation technology like AI, Machine Learning and Autonomous Vehicle Driving.
Trading and retailing industries
Trading and retailing industries are not spared by the disruption in the supply chain. Many of the traders and retailers are running short of inventory due to late delivery of goods. Thus most of the interviewees are indicating the need to have proper inventory management during this period. The need to constantly review and adjust their inventory policies and supplier reliability are critical for survival as indicated by the interviewees.
Most of these companies are using inventory systems to monitor and plan their inventory. With thousands of SKUs to monitor, it makes sense to implement inventory system to manage their inventory and establish policies within the system to optimise the inventory level.
Most of the interviewees from trading and retailing believe inventory management is critical today, increase safety stock level to reduce the risk of a production slow down or stoppages, thus focus on supply assurance and shortage management. Shortage management is a strategy that looks at how many items are needed by a specific date and guides purchasing managers to procure them based on this information. Supply assurance looks at all required parts over a very long horizon, taking into account possible shortages and obsolescence, and develops supply plans for those parts.
Companies should relook at the current inventory strategies during pandemic to drive order flexibility and service level performance. These include: managing long lead times, inventory positioning, safety stock to counter unexpected demands and dynamic, localized replenishment models to ensure materials are delivered exactly when they are needed – not simply when they’re forecasted to be needed.
According to COO of Chilibeli, Mr. Damon Yue, his company is reacting quickly to disruption requires a flexible ecosystem of suppliers and partners that can handle sudden shortfalls or even produce new products. That means setting up alternative sourcing and making the most of technologies to optimize cost, improve visibility across the network and accelerate reaction times. Those who rely on imports are shifting inward or closer to their core markets.
As for Chilibeli, they are fortunate to be able to source their products within Indonesia. Amid the Covid-19 pandemic, the company needs greater visibility into the supply chains of their suppliers. More companies are applying automation and robotics to make their supply chain more autonomous and adding suppliers in their home markets to ensure business continuity.
Control tower solutions that integrate data across the entire supply chain, 5G technology and blockchain offer supply chain team real-time visibility according to the COO. Companies can better calibrate supply with forecast demand by comparing internal capacity data with real-time demand signals such as weather data.
Summary from the interviewees
We see a few important business skills that are key during the pandemic:
- The ability to explore and implement information technologies are essential business skills as indicated by all the interviewees. Smart sensors, AI, and various business intelligence (BI) tools can help to ensure supply visibility, shipping at low costs, forecast demand, and control inventory. Business intelligence and data analytics, when used strategically, can enable cost reduction and boost efficiency across business functions as indicated by most of the interviewees. Supply chain, for instance, is one such function that can benefit enormously with the use of data analytics and this can help you make informed and strategic decisions in times of uncertainty.
- The need to increase redundancy in inventory, in warehouse space to avoid supply chain disruption since most suppliers are not able to commit their delivery schedule due to lockdown.
- The need to prepare for crisis management and risk management become more critical now as there are many uncertainty during the pandemic. Supply chain leaders need to identify potential risk in managing the suppliers and customers.
- The ability to make decision and in solving problems are useful since there many operational issues during the pandemic.
The findings from our study are beneficiary to human resource managers for their new hires, while policy makers and educational and training bodies can also use the findings from this study to design new courses which are necessary to facilitate skill and knowledge development for the future supply chain professionals.
List of companies we have interviewed
- AI Futtaim Logistics
- Chili Beli
- Future Group
- Zimmer India
- Giant Hypermarket
- Green Renewable Organic World Centre
- GS1 Malaysia Berhad
- PKT Logistics Group
- SNT Global Logistics
- Siam Cement Group Logistics
- Sitics Logistic Solutions Pvt. Ltd.
- Sri Trang Gloves
- Unilever Thai Trading Ltd.
- A.P. Moller MaerskVietnam Ltd.
- Cargill Vietnam
- Procter & Gamble Vietnam
- Tiki Now Smart Logistics