Technology adoption by manufacturing and supply chain sectors still slow in SEA

Advancements in technology have witnessed higher technology adoption with more processes automated in most sectors and industries around the world. Be it manufacturing, finance, or healthcare, modern technologies have allowed businesses in these sectors to not only improve their efficiency but also increase their productivity overall.

Today, AI-driven technologies have revolutionized the way we work, especially after the effects of the pandemic. In Southeast Asia, the pandemic has accelerated the digital transformation of not just large enterprises, but small and medium-sized businesses as well.

However, according to a survey by AIBP and Oracle, close to half of manufacturing and supply chain professionals perceive their companies to be lagging in the industry. The survey was conducted on IT professionals in manufacturing and supply chain companies across the largest economies in Southeast Asia — Singapore, Indonesia, Malaysia, Thailand, Philippines & Vietnam.

In Southeast Asia, the manufacturing industry contributes more than 20% to the GDP in markets like Singapore, Malaysia, Indonesia, and Thailand. As demand for better services and products increases in the region, it’s a bit surprising that many IT professionals feel their companies are still lagging in terms of tech adoption.

Some of the reasons for this could be the high costs of implementing new technologies as well as the shortage of talents in managing these technologies. Countries like Singapore and Malaysia are already experiencing a high shortage of tech-related skillsets.

The survey also found that 46.6% of respondents believed that the top priority of implementing digital solutions should be to drive operational efficiency in a bid to reduce costs, while 16.6% feel that it should be used to increase or create revenue opportunities.

Interestingly, according to a report by Deloitte, commissioned by Autodesk Foundation, Singapore is the country least at risk from automation, ranking second for preparedness, behind Australia, and ahead of Japan. Heavy investments in education, assist at-risk workers, and support workers’ transition to new roles and industries are some of the key contributing factors towards this.

Thossaporn Petporee, SVP, and part of Charoen Pokphand Foods’ digital committee outlined how Charoen Pokphand Foods have been ahead of the curve when it comes to digital transformation because of their experiences navigating past disruptions like the African swine fever and Avian Influenza.

“Each time a pandemic hit, we prepared ourselves better. In our farms, we have the highest level of biosecurity and AI to identify animals across the farm and sales areas. We do well because we keep up to date, keep challenging ourselves.”

The recent pandemic has led them to develop innovative online solutions like Vet Online and chatbots which are made available to the farms across their network to allow for the diagnosis of animal diseases remotely.

According to Michael Lim, GTM Leader, ERP & Digital Supply Chain, Oracle, “There is an urgent need to reorganize one’s supply chains in the wake of 2020 and the recent Suez Canal blockage, and manufacturers in the region are rightly realizing that what they have in-house is not enough when creating robust and resilient logistics processes that keep the business moving efficiently.”

Overall, while the survey shows the low technology adoption, businesses in Southeast Asia are still investing heavily in new technologies, especially in automating most of their tasks. Supply chain tech such as warehouse management tools and the use of robotics in logistics are just some of the new technologies being applied to increase productivity.

As Michael puts it, the affordability of tech will hopefully see more businesses in the manufacturing industry increase their technology adoption in the future.

 

 

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