Header Top Bar

WhatsApp Us +65 8699 8821

5 Ways Digitalization Shapes Malaysia’s Supply Chain Management

5 Ways Digitalization Shapes Malaysia’s Supply Chain Management

Supply chains in the 21st century are undergoing a rapid transformation towards ‘Supply Chain 4.0’.

That means digitalization is reshaping supply chain management, and companies can now connect with their customers and stakeholders on an entirely new level.

Supply chain executives in Malaysia need to make sure they’re prepared for the digital era, which will require them to rethink how they manage their suppliers and customers.

On the other hand, supply chains need to be flexible enough to seamlessly move between the physical world and the digital world without boundaries or constraints.

The lines between the two are blurring, and companies need to be able to adapt quickly. Here are 5 ways digital transformation is shaping the supply chain in Malaysia.


What Does Digitalization Mean for Malaysia’s Supply Chain Management?

Digitalization has had a significant impact on supply chain management in Malaysia. It has made these applications possible:

  • The tracking of goods and materials throughout the supply chain in ways that were not possible before
  • Management of the supply chain more effectively through the use of cloud-based applications
  • The tracking of shipments and deliveries in real-time

In this article, we explore more about the opportunities and challenges this shift has brought!


Machine Learning in Demand-Driven Supply Chain Management

This used to be based simply on historical data points that were used to predict future demand.

The problem was that historical data is limited because it is no longer relevant to real-time facts on the ground.

Today, embedded sensors can monitor and report data within supply chains to give real-time analysis of demand trends.

Executives are now turning to machine learning (ML) algorithms that can take this data and use it to predict future demand and anticipate potential disruptions in the supply chain.

This information is invaluable for companies looking to avoid costly downtime and disruptions.


Synergistic Co-creation of Value in Supply Chain Management

Supply chain digital transformation has made data at all levels bountiful and rich with information.

It makes sense to share it with others in the supply chain to make it more connected and cohesive with so many stakeholders within the chain holding this valuable data.

This process is known as value co-creation, and it’s a key part of Supply Chain 4.0. It allows for the flow of information between all stakeholders so that everyone has visibility of what’s happening at every stage of the digital supply chain.

This helps to avoid problems further down the line and ultimately leads to a more efficient and effective supply chain.


Smart Logistics in Supply Chain Management

Digitization is allowing for a whole host of automation, from cargo tracking to automated warehousing, and remote fleet management.

This automation is made possible by the Internet of Things (IoT), which refers to the interconnected network of physical devices that can collect and share data.

Technologies aiding smart logistics include ubiquitous GPS trackers and inexpensive Bluetooth Low Energy (BLE) devices on assets.

In Supply Chain 4.0, logistics management is becoming increasingly smart.

Executives are now able to track shipments in real-time, monitor conditions within warehouses, and even predict traffic congestion on shipping routes. It’s also perfect for optimisation during variable customer demand.

All of this information helps to make supply chain performance more efficient and less prone to disruptions.


Mitigating Cyber Risks in Supply Chain Management

The explosion of data has produced an enormous amount of value-driven information, which is then shared for collaboration and value co-creation.

This attracts the attention of malicious individuals who want to obtain this data for criminal reasons.

Executives need to be aware of the potential cyber risks that come with digitization and implement robust security measures to protect their data.

This includes things like encryption, two-factor authentication, and access control lists. Efforts should also be made to put suppliers through cyber security evaluations to mitigate potential breaches.

Executives can mitigate the risks and keep their data safe by taking these precautions.

Related Read: Preparing for the Open Finance Framework »


Meeting New Customer Demand in Supply Chain Management

There is no doubt that the global pandemic intensified online shopping, which put pressure on supply chains and made them a lot more dynamic.

They now need to meet the demand for online shopping, which means they need to be more responsive and agile.

Some businesses are moving from direct stores to centralised distribution models that use real-time inventory management to keep up with highly fluid demand.

Some manufacturers are developing direct-to-consumer (DTC) models that allow them to ship products directly to customers without going through retailers, increasing profits along the way.

As consumers demand more from their online shopping experiences, they expect to see businesses leverage augmented reality (AR) and virtual reality (VR) to give customers a realistic preview of products before purchasing them.

This will also help to reduce returns, which are costly for businesses.


Digitalization Benefits Supply Chain Management Over the Long Haul

Digitalization is heralding the next era in supply chain management, where suppliers and customers come together in entirely new ways.

Continued growth will depend on stakeholders continuing to evolve their practices, and innovation will always need to be at the forefront of their thinking.

But with the right mindset, there’s no reason it can’t continue to reap the benefits of digital transformation for years to come.

Related Read: Industry 4.0: The Growth of Advanced Manufacturing in Southeast Asia »

FAQs on Digital Transformations

  • Digitalization in supply chains is the method of using and incorporating different technologies into related processes, including distribution, inventory management, transportation, and the storage of information.
  • It can help to increase efficiency, competitiveness, and consumer satisfaction.
  • They are technologies like radio frequency identification (RFID), barcodes, location-based data, and smart labels.

Incorporate Now

Begin your business in Malaysia
Learn how your company can be part of this digital transformation in Malaysia!

About the Author

Eric Chin

Eric comes from banking background. He provides consultancy to local and foreign entities on the ideal market-entry strategies for setting up or expanding operations in Southeast Asia. Eric also provides advisory to fund managers and family offices on structuring as well as applicable tax incentives. He has also set up many VCC structures for licenced fund managers.

More on Business Blogs

Contact Us