Four Questions About the Pharma Supply Chain You Should Answer If You Are in SEA

Southeast Asia has a population of more than 600 million and a GDP of approximately 2.4 trillion USD. Frost & Sullivan predicts that Indonesia’s compound annual rate of growth will be 15.4% by 2020. The region’s growth is attributed to lower production costs, large government spending, and increasing disposable income from a growing middle-class.

Urbanization at a rapid pace is expected to double the consumption class to 163 million households by 2030. This will drive growth in the consumer goods, retail, and services sectors and require investments in infrastructure and real property. A total of $7 trillion will be needed to invest in infrastructure, housing, commercial space, and other areas.

It is not surprising that businesses in the region are preparing for an increase in demand due to the predicted growth of the economy. The logistics sector would need to also step up in such an instance. There are no blueprints for boosting the supply chain because of the country’s growing economy. Every industry must find its optimization healthcare logistics companies to improve its productivity.

Supply Chain Businesses Should Meet Customer Expectations

Businesses need to be aware that the success of supply chain management and logistics in the region is dependent on many factors such as changing market trends and growing consumer demand.

  • Rising Competition in Omnichannel Selling

Brick-and-mortar retailers have also embraced omnichannel selling and opened online stores in response to the rapid growth of E-commerce. Customers have hundreds of options when it comes to online sellers. This makes it difficult for supply chains to optimize their delivery operations for maximum customer satisfaction.

  • Same-day Delivery Expectations

Customers are increasingly demanding express deliveries, particularly same-day and two-day, which is why it has become imperative that E-commerce businesses and delivery companies in Southeast Asia keep their promise of express or same-day delivery. Customers also expect fast and specific delivery times that fit their needs.

  • Free Shipping

No longer are customers willing to pay shipping fees to enjoy doorstep delivery. The customer expects shipping to be free of charge, given the variety of delivery and shopping options. Customers expect hassle-free, more economical shopping. However, to offer free shipping and make profits, businesses must find ways to lower operating costs.

  • More transparency

The majority of Southeast Asian shoppers are becoming increasingly tech-savvy as they become more urbanized and mobile phone penetration increases. Digitally-savvy customers expect more transparency from sellers regarding the status of their order. They want to know when packages will arrive, who will transport them and if they are being delivered on time. Visibility is now a requirement, not a luxury or comfort.

1. What are the opportunities and challenges of the supply chain in the S.E. Asia market

The market in Southeast Asia offers great growth potential due to its unsaturated nature, but it also faces many challenges. Because of the differences in maturity, organizations will need to use different supply chains to comply with the various standards.

Google and Temasek Holding’s research further highlight the region’s potential. They project that the e-commerce market will grow from US$5.5 Billion in 2015 to US$88 Billion in 2025. Indonesia accounts for 52 percent of this market.

This rapid growth would create a huge market for logistics, but it could also lead to increased competition, customer expectations, and a decrease in customer loyalty. Organizations must focus on improving their last-mile delivery services as logistics is the main differentiator between e-commerce businesses.

The region’s logistics sector is poised to explode with the rise in online sales and the influx of manufacturers. Over the past decade, Indonesia’s logistics and transport sector have seen double-digit growth. This trend is expected to continue. The logistics sector faces many challenges, but there are also plenty of opportunities. To increase its productivity, automation is a must.

2. What is the point of automation in my supply chain.

The logistics sector is expected to explode in Southeast Asia. This will mean that the industry’s challenges will increase exponentially. Businesses will be under increasing pressure to meet customer demands and uphold their standards.

Imagine delivering 100 furniture units. Consider the following: the cost contract for different vehicle types, the types of furniture that can be or cannot be delivered together, and who should be assigned to assemble these units. Addresses and times for the loading hub, as well as real-life traffic constraints and fuzzy delivery address.

The region is expecting a significant increase in economic activity and companies anticipate a surge in orders. It becomes almost impossible for the human brain to take into account all of these factors. Businesses now need automation and the use of AI. Businesses cannot afford to invest in human capital. Automation and reducing human dependency are the key to success.

3. What potential effects could automation have on the supply chain?

Supply chains can be helped in all aspects of automation. Automation has the potential for revolutionizing the supply chain, from optimized route planning to efficient last-mile delivery. Automation is changing the game in many ways, including sales beat optimization and real-time fleet tracking.

Logistics accounts for approximately 24% of Indonesia’s GDP. Businesses can reduce costs and increase efficiency by automating their supply chains. Automation promises to reduce human dependency, which could be a boon in the Southeast Asia region, which is experiencing shrinking labor forces.

Automation’s real benefit is not in the tangible benefits it offers businesses. AI-based decision-making engines can help supply chain leaders make better logistics decisions. AI can use historical data to project the future and unlock many secrets in optimizing resources and understanding customers.

4. Can automation be integrated with my existing system

As we have seen, emerging businesses in Southeast Asia do not have standard processes. For smooth transitions, each business will have its systems and technology solutions that can be integrated. Cloud-based logistics technology platforms of the future are easy to use and integrate with existing systems. They can also be used within specific company restrictions.

These SaaS services are highly scalable because they operate on a pay-as-you-go model. These platforms offer dedicated change management teams who work with the company’s resources to ensure a smooth transition to the new platform.