Is your Supply Chain Resilient?

6 Mins read

DHL and Invest Penang have jointly organized a webinar to address the need of supply chain resilience on May 4, 2021. The speakers were Zhong Guo Goh Innovation Manager, DHL Asia Pacific Innovation Center (APIC), Mohammad Ridwan Idid Business Developer Director, DHL Supply Chain Malaysia, Lee YC, Executive Invest Penang and Calvin Oh North Area Head, Business Development, DHL Express Malaysia, which combined to bring 30 years of Supply Chain Management experience.

Top 3 FAQs on Innovation and Supply Chain Management during the COVID19 outbreak

Calvin: A very good afternoon to all of you, I’m Calvin, your moderator today. So, the first question is, in terms of innovation are you planning to build a fulfillment center in heavy traffic countries for a faster delivery to the end user and significantly reduce the international shipment lead time.

Calvin: Can we have Ridwan to take over this question from the floor? Allow me to repeat the question to you. In terms of innovation are you planning to build a fulfillment center in heavy traffic countries for a faster delivery to the end user and significantly reduce the international shipment lead time.

Ridwan: Alright, in term of setting up a fulfilment center, we normally listen to the market demand also on the needs of the customers. We have received several inquiries, for example, setting up of a Regional Distribution Center. Of course we have our own thoughts and views and that is where we come in and discuss with the customers to determine the best location to set up a fulfillment center. At DHL, when a fulfilment center is built, it will be tailor-made to each individuals. We will look into the center of gravity of where is the nearest or largest strategic market that the customers want to penetrate or where their existing customers are located.

Ridwan: Besides, we will also consider the resources or other elements that makes it a formidable location for a fulfilment center. Furthermore, we will also look into the transportation network that is available to serve their markets. In Malaysia, we will set up a fulfilment center where the infrastructures are well developed and matured for example, Kuala Lumpur, Penang and Tanjung Pelepas, Johor. For example, if the demand of the consumers are based within the Klang Valley, it makes more sense to have the fulfilment center to be there. Thus, it depends on the sector that these customers are in. Thank you Calvin.

Calvin: That is very interesting when it comes to the considering factors for building a fulfilment center in any location. I also find that data plays an important role. Perhaps, Mr. Goh, can share his inputs from the innovation center perspective.  

Goh: Yes, I think that’s a good point brought up. In terms of data, I think where the demand is, is also one aspect and also how much inventory you have which affects the way a fulfilment center is set up. So, we have to consider from the business point of view, the network, the demand as well as the population or even what are the various other factors that might affect your decision on the certain fulfillment center.

Goh: So for our innovation point of view, I think that leveraging on the data that we have will actually help us to determine where the demands are and help us make a better decision in determining the location that we want.

 

Calvin: That’s right, thanks Mr Goh. Let’s move on to the next question and can we have Mr. Goh to answer this how trustworthy is the robot and what is the guarantee for an accurate service on picking and delivery.

Goh: Alright, if you are talking the last-mile delivery, I think that there is already autonomous technology that does that and many people are already experimenting on it. But it really depends on the area that you are in. For example, if you are in an urban area like Singapore, maybe an AGV type of thing might not really work because of all the obstacles that you have.

Goh: So interestingly we have also seen the Boston dynamic dog which allows the four-legged dog to deliver your items. That is in the works and it might happen in the future. But if you talk about a more controlled environment like a warehouse setting or even manufacturing setting, I think the technology has already matured which is also depending on the kind of use case that you’re looking at. So it must be very use case specific and not very generic. If you are talking about just picking a repetitive task I think the accuracy and the technology now is already here and you can already implement it. So, it is again very use case specific, to give you a very direct answer is to compare. Thus, you must really define what kind use case you are looking at and how you want to implement that. Then, we will find the proper solution for your use case.

Calvin: Alright, moving on to the next question, what will be the ideal way in terms of setting up a distribution center to cushion the impact of pandemic and crisis for Mr Ridwan.

Ridwan: Thanks Calvin. So how do we cushion the impact? The keyword here is diversification. We have to diversify in terms of sourcing, in terms of supply as well as your distribution center because it will definitely be a great risk if we are relying only on one single source and depending on one single location. For instance, if that country’s sourcing is on a lockdown and you do not have Plan B or Plan C, if we have the opportunity to review and revamp our supply chain structure, we should have multiple source of location to provide those materials or the distribution source of that item.

Ridwan: Besides, in these challenging times we should also look into automation and digitalization. For example, if we are dependent on foreign workers right and the supplies are unavailable due to government restrictions, we should look into automation which has to be part of the plan in the warehouse. For instance, putting up a conveyor belt in your warehouse that can reduce the dependency of foreign workers by up to four to five hit count. It’s not a very costly investment for a conveyor belt. So simple things which is practical and can address the issue should be considered when setting up and how to operate fulfillment during these challenging times.

Calvin: Alright, thank you Mr Ridwan. So, the next question is for Mr Goh. What are the factors needed to be considered when implementing innovation?

Goh: In my opinion, one of the things that we have found out is that you have to identify the pain points. I think deriving from a problem and a pain point is one area that you can think about when you want to implement innovation, what kind of innovation journey one do you want to have and then the various trends and technologies that might be relevant to your industry. So for us we try to segment that and identify whether it is for five years or ten years and we really focus on it. We will also conduct researches to find out what are the relevant technology in the next five years or so that we could potentially already scale it within our business.

Goh: So, in terms of implementation that is one way and of course I think with everything it’s always business case and also cost which is also one of the factors that we will watch out for. However, we want to have very cool innovation going into operations, the one main thing is always cost and whether it makes business sense. Thus, we want to balance that and also whether it is for productivity. Over time, we can budget in that cost and it works fine. So things like that will help us to implement and bring innovation and digitalization into your environment. Therefore, thinking out the box a bit but yet working with some form of structure will really help you to start up your innovation journey.

Calvin: Alright Mr Goh, perhaps you could shed some light on the plans of drone delivery for domestic and international shipments from DHL Asia Pacific Innovation Center?

Goh: I mean everybody would like to test out on domestic delivery of drones and even for international shipments. However, we always see the restrictions from regulations, that’s one but with that said I think we are internally talking to various agencies. In fact in Australia we have actually looked into the mining industry. As you know the mining industry in Australia is always very remote and selling critical parts is always difficult and very costly. The question is can we leverage on drone for that industry and we have a team who is looking at that to identify the possibilities of drone deliveries.

Goh: Every time we plan on drone projects, we always consider regulations and safety issues which are also the roadblocks in my opinion. However, it is different in every countries. In Singapore, we saw drone delivery of two offshore ships within a confined environment and confined regulation space. If you ask me if there will be multiple drone implementations in a near term, I would say no. However, in a long term, you might see much targeted drone implementation in different sectors. So using drone to analyze buildings and agricultural space might be allowed provided that the regulations allow it. As for domestic and international delivery across building I think that poses challenges and pushbacks in terms of safety.

Calvin: Yes, safety and also regulations from the Civil Aviation Authority that we have to follow. Alright, we have covered all the questions and that’s all for today. Thank you to all the speakers.