How Technology Will Transform Supply Chain Processes in Asia

Wendy Kent, chief operating officer at product design and procurement specialist, Matrix, examines what the coming months hold for supply chains in Asia

2016 has been a year for change, most notably from a political perspective, but the leaps and bounds made in the technology arena cannot be ignored. It’s safe to say we have seen a great deal of technological transition as companies around the globe have taken strides towards incorporating artificial intelligence (AI) into the day-to-day, training robots to help combat inefficiencies at every point of the supply chain. Investment in these disruptive technologies has become a necessary step for forward thinking businesses to ensure survival in a trend-driven market. This is evident from adidas unveiling the first shoe to come out of its robot factory, an AI collaboration between Fanuc and Nividia, and Unilever experiencing prototype production time cut by nearly half after investing in 3D printing.

Disruptive technologies have been influential in the supply chain for several years now, but 2017 will be a year of acceleration. Factories in Asia operate in an intensely competitive market and there will be a noticeable move towards incorporating AI technology more broadly to keep pace with burgeoning retail demand. The rise of the 24-hour economy and increased expectation of instant gratification puts pressure on factory owners to strive for ambitious targets in an attempt to establish a lead against competitors. However, there is no place in the modern, transparent supply chain for factory owners who push staff too hard, and beyond capacity to meet these targets.

The likes of AI and 3D printing enable tasks that were once carried out by humans to be done by machines far more efficiently, conveniently and ultimately, more cheaply. In addition to near-continuous production, once established, these technologies can eliminate the possibility of human error, and enhance employee well being for the modern generation of factory workers.

2017 will mark the start of a new working relationship between the human workforce and AI. After all, technology needs to be managed and maintained by someone. This presents an opportunity for workers to be focused and productive in their roles with the support of technology, and take a step away from menial tasks to completing work that is far more fulfilling.

Technological innovation will start to impact quality of workers’ lives too. It will begin to introduce greater transparency to working hours and pay throughout the supply chain benefiting workers greatly. Worker well-being is becoming more and more important to ethically conscious brands, challenging the norm of unregulated and varied working standards across supply chains in Asia. Whilst there have been many efforts over recent years to address this issue, 2017 will see a step up in the consistency of concern for human rights and employee well-being.

The permeation of technology won’t stop there either. Utilising elements of the technology that monitors worker output, we’re developing a smart new app which users will be able to use to log responses to questions about the quality of their working lives. Accumulated information, gathered in real time, will help build a picture of each factory’s performance and staff happiness. Data will also reveal how to make improvements to equipment, greatly boosting efficiency and quality in factories throughout our supply chain.

Moreover, encouraging an open, transparent environment where people can share their opinions openly with each other and positions of authority will help factories improve and grow, also helping bring the working standards in Asia in line with contemporary worker ideals.

Many forms of technology are helping supply chain processes shift from being simply reactive to becoming far more proactive, even predicting potential potholes before they throw plans and strategy off-course. In fact, through trial, we’d estimate that the incorporation of tech developments could help cut production times for some products from three months to three weeks. A mind-blowing prospect for key players involved in product supply chains, that offers a real competitive advantage.

The latest robots have the ability to learn how to complete multiple jobs, so they can be plugged in practically anywhere along the supply chain. AI’s ability to be flexible, particularly in manufacturing processes, will take AI to the mainstream as its return on investment (ROI) will become clear to stakeholders.

Historically, there has been limited means to survey individual workers, without putting the factory under constant surveillance. However, new networks and sensors are now making insights visible that could not have been revealed in the past. Aggregated, personalised data on worker output will allow factory bosses to make changes to processes for all staff, opening opportunities to increase productivity even further, streamlining previously convoluted jobs that caused bottlenecks in production. Additionally, one small sensor could provide accurate, real-time data to inform buying decisions, helping factories to operate on a leaner business model and reduce wastage. This is a game changer, and while it’s a priority focus for us at Matrix, it will be increasingly present throughout supply chains across Asia.

It will also help address the issue of falsification in the auditing process. Widespread in factories across Asia, falsification is bought on by fear of failure, and the result is that real issues in factories can remain perpetually unresolved, ultimately compromising the ethical standards of a supply chain. This sort of automated data will give retailers greater power to identify and support those suppliers with improving quality and ethical standards and disassociate themselves from those who are falling short.

This information can then easily be communicated to the consumer. 2016 has seen a decline in levels of consumer trust in brands and retailers, following a number of high profile exposures, placing a higher value on integrity and ethics. In 2017, a world of political change and economic uncertainty, full-disclosure and trust will be highly valued and appealing to consumers. Access to core data and heightened connectivity will provide buyers and consumers with the ethical story behind the product, from how it was created to its environmental impact. Supply chain partners across Asia must work together to make product information far more accessible. 

Asia is at the forefront of incorporating technology for the better, which gives businesses operating there a significant advantage as we roll into 2017. Technology is the vehicle to change for supply chains in a transparent age, and the only way to ensure advantage on an increasingly competitive global stage. What supply chains in Asia must consider is how to leverage the competitive benefits without sacrificing the people working within it.