Harnessing New Tech to Improve Supply Chain Management

01 Jul 2019

ST Logistics’ new chief executive Officer, Mr Loganathan Ramasamy shares the view that the logistics industry needs to digitalise and future-proof our operations to remain relevant. One way is to use technology to improve supply chain management. And in line with that, the company must also ensure that workers are not left behind and are instead trained and redeployed to take on higher value jobs.
Read more about STL’s approach here.

The Straits Times
Saturday, June 29, 2019

Technology has been disrupting many industries but that same disruption is being harnessed by some firms to sharpen up their operations.

Home-grown company ST Logistics, which provides supply chain management services, believes the digital wave is providing new opportunities for it to improve services and move workers up the value chain.

Its two-pronged strategy is to work towards a fully integrated, automated supply chain in the next three years and ensure that staff are retrained and ready to fully participate in a high-tech environment, said new chief executive Loganathan Ramasamy.

Mr Loganathan, who took over the leadership role in April after being with the company for about a decade, said there is immense pressure on the industry to digitalise or be out of business entirely.

“It is quite daunting but it is also good to feel that way. When we feel under pressure, we can change and transform to be ahead of curve,” he noted.

“The logistics industry is one that is growing in Singapore. Now it forms around 8 per cent of the country’s gross domestic product, which is quite sizeable. A similar percentage of the workforce is also involved in this industry.”

The company has invested $10 million to $15 million in new technologies over the past two to three years to improve processes.

One initiative involves using autonomous forklifts that can be integrated with the warehouse operations.

A forklift driver can be in an air-conditioned room and control a few vehicles rather than sitting in the hot vehicle and driving just one.

Mr Loganathan said: “Let’s say you buy an autonomous forklift that might be a quarter of a million dollars. The salary of the driver is a portion of that so perhaps you don’t see the immediate saving.

“But then the forklift can work 24 hours and a worker only eight to 10 hours. The worker also can get tired and take breaks. In time to come, maybe you can’t even get a driver because fewer people want to do such a job.”

The company has incorporated the use of telematics, which allows information on vehicles and drivers to be beamed back to the control tower system, as well as radio frequency identification systems that help with tracking goods.

It has a central command centre that tracks the supply chain from end to end.

Vehicle movements are updated in real time, with information such as the foods the vehicles are carrying, the orders being fulfilled, the temperature of the products and the routes.

A system called Robotic Process Automation is also proving very useful in the logistics industry, Mr Loganathan added.

“It is about automating manual, repetitive processes such as order processing, which normally takes two hours, but now can take only 15 to 20 minutes. Staff can be redeployed to do other work with added value and help the company’s competitive standing.”

He estimates it will take up to three years for the supply chain system to be fully integrated so there will be visibility of the entire process from the goods inventory to the customer’s location.

“We can also mine the data and analyse the system. In procurement, it will help us decide when to buy and how much. Workers who used to just focus on execution on the ground now run a command and control system.”

The next step is in following through with new technologies, taking employees along on the journey, he added.

Half of the 1,000-strong staff are 30 to 50 years old, with about 20 per cent over 50.

Mr Loganathan said: “This industry has an ageing workforce. It is not a sexy industry and requires hard work. It is not an office job. We have to focus on training our workers but also attract the younger generation.

The onus is on the company. People have committed long years to us so we have to focus on them. The assumption is that older workers cannot be trained, but they can use mobile phones well, with WhatsApp messaging and e-payments. They do not have the ability to adapt and learn.”

ST Logistics signed agreements in January to partner with NTUC LearningHub and the National University of Singapore to train its workforce.

Programmes such as data analytics and robotics are especially relevant to the industry, Mr Loganathan noted.

“It is about engagement and mindset change. It is also not about laying off workers, but redeployment and making full use of staff.”

He added that technology can only go so far and human staff are still needed to provide supply chain services.

“We can automate maybe 30 to 40 percent, but there are still jobs that we need people for. Some roles require complex human interaction because they are more service-oriented or about customer communication. We also need people in management who are involved in complex decision-making.”

Instead, job redesign is the way to go where people who used to do ground level work now can oversee operations along the chain and make decisions.

“Technology can show you the event or crisis but the human has to make the decision,” noted Mr Loganathan.

Rather than knowing how to use specific technology, staff need to be adaptable and nimble.

“We all need to be willing to move and change or we will be displaced and nobody will want to join us. These are exciting times because we are moving forward.”

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