Reconfigure ASEAN supply chain

The one geo-economic factor that will blend these two together — regional integration and digitalisation — is supply chain reconfiguration (SCR).

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Published by New Straits Times & The Asean Post, image from New Straits Times.

THE Covid-19 pandemic, which is expected to be prolonged and drawn out at least until a vaccine is readily available, has rekindled the call for Asean, a market of nearly 700 million people with a growing middle class, to further forge and foster regional integration.

At the same time, Covid-19 has also been a catalyst in exposing the critical need for business and commerce to further digitalise and explore usage of new technologies. The one geo-economic factor that will blend these two together — regional integration and digitalisation — is supply chain reconfiguration (SCR).

SCR means the rearrangement of supply chain structures to reflect current exigencies, such as disruptions and shocks.

When the supply chain adapts and adopts digitalisation and new technologies, connectivity will not only resume but become more resilient.

This is best highlighted by Jamari Mohtar in his article, “Tackling MCO’s economic paradox and its aftermath”.

SCR, therefore, will be a pivotal driver in the momentum towards closer and deeper regionalisation amidst the expected-to-be prolonged Covid-19 crisis.

Towards that end, it’s also dependent on Asean states in enhancing and boosting connectivity and the supply chain.

They could set up a common supply chain fund, perhaps in the form of an Asean “Business Infrastructure Bank”.

Funds would be pooled from member states, which will be proportionately reflected in the shares held as well as financing support from the Asian Development Bank and even the Asian Infrastructure Investment Bank.

The fund or bank will provide financing to governments and the private sector to develop and promote SCR and enhanced trade connectivity in the region and beyond.

This includes digital adaptation and adoption as means to promote digital convergence and supply chain confluence as exemplified, for example, by e-commerce.

There is also the need for a common protocol that will obviate problems arising from supply chain disruptions, a point made by Hanim Hamzah, senior fellow of the CIMB Asean Research Institute.

This common protocol should encompass all aspects in the supply chain management — legal, technical, digital and financial. By the same token, it should reflect SCR and its building-blocks for future developments.

For example, the common protocol should make use of block-chain to enhance regional participation in the supply chain and thereby boost regional integration.

McKinsey’s report, Blockchain technology for supply chains – A must or a maybe? (2017), outlines three benefits to be had from a SCR that’s operationalised via blockchain, namely replacing slow, manual processes; strengthening traceability; and, reducing supply-chain IT transaction costs.

As such, SCR will allow member states to enjoy efficiency gains as well as reduced costs over time with blockchain playing a role as part of the digital economies of scale.

In turn, this will contribute towards greater regionalisation as member states are put on a more level playing field, so to speak, in terms of digital adoption and adaptation leading to enhanced supply chain connectivity.

Following on from digitalisation, SCR can also take the shape of new technologies that introduce the logistics of the future – looking forward and ahead. The mushrooming in e-commerce as a result of the impact of the Covid-19 outbreak will lead to greater usage and competition for urban traffic space within domestic borders as shown in studies on urban logistics systems.

Digitalisation — Internet of Things (IoT), Big Data, precision analytics, business algorithms and artificial intelligence (AI) and not least 5G wireless technology — plays a crucial role in the processing and coordination of operations and orders in a timely, targeted and expeditious manner.

This means that SCR in terms of the new logistics can be leveraged by Asean member states to promote horizontal and vertical integration across borders even as the latter could be instrumental in driving the dynamism of the former.

In the final analysis, SCR is also about the reconceptualising and readapting the physical assets and infrastructure of the supply chain to strengthen intra-regional connectivity.

That would then yield spillovers and serve as building-blocks for future logistics which in turn will further deepen regional integration.

Jason Loh Seong Wei is Head of Social, Law and Human Rights at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

Bahasa Melayu

Diterbitkan oleh Berita Harian.

Pandemik COVID-19 yang dijangkakan berpanjangan dan sekurang-kurangnya sehingga vaksin ditemui, menghidupkan kembali seruan agar ASEAN – sebuah pasaran merangkumi hampir 700 juta orang – terus berusaha menjalin dan memupuk kesepaduan serantau.

Pada masa sama, COVID-19 menjadi pemangkin dan pendorong mendedahkan keperluan kritikal bagi perniagaan dan perdagangan untuk digitalisasi dan meneroka penggunaan teknologi baharu.

Satu-satunya faktor geoekonomi yang menggabungkan kedua-dua ini adalah penyusunan semula rantaian bekalan.

Ia membabitkan penyusunan semula struktur rantaian bekalan bagi mencerminkan perubahan keadaan semasa akibat gangguan dan kejutan.

Apabila rantaian bekalan disesuaikan penggunaan digitalisasi dan teknologi baharu, kesalinghubungan bukan sahaja dapat diteruskan semula, malah menjadi lebih berdaya tahan.

Oleh itu, penyusunan semula akan menjadi pemacu penting dalam momentum ke arah penyerantauan lebih erat dan mendalam di tengah krisis COVID-19 yang dijangka berpanjangan.

Ia juga bergantung peranan dimainkan negara ASEAN dalam mempertingkat dan merangsang kesalinghubungan serta rantaian bekalan.

Dalam usaha penyerantauan, negara ASEAN digesa menubuhkan dana rantaian bekalan bersama, mungkin dalam bentuk ‘Bank Infrastruktur Perniagaan’ ASEAN.

Dana akan dikumpul daripada negara anggota bersesuaian kadar saham dipegang mereka serta sokongan pembiayaan daripada Bank Pembangunan Asia (ADB) dan Bank Pelaburan Infrastruktur Asia (AIIB).

Ia menyediakan pembiayaan kepada kerajaan serta sektor swasta untuk membangun dan mempromosikan penyusunan semula itu serta meningkatkan kesalinghubungan perdagangan di rantau dan luar rantau ini.

Ini termasuk penyesuaian dan penggunaan digital sebagai cara untuk mempromosi penumpuan digital dan pertemuan rantaian bekalan seperti melalui e-dagang.

Dalam pada itu, terdapat juga keperluan menyediakan satu protokol bersama bagi mengatasi masalah yang timbul akibat gangguan rantaian bekalan, seperti diutarakan Felo Kanan Institut Penyelidikan Asean CIMB (CARI), Hanim Hamzah.

Ini merangkumi semua aspek pengurusan rantaian bekalan, undang-undang, teknikal, digital dan kewangan.

Sebagai contoh, protokol boleh mengguna teknologi lejar diedarkan atau lebih dikenali sebagai blok rantai bagi meningkatkan penyertaan serantau dalam rantaian bekalan dan seterusnya, dapat meningkatkan kesepaduan serantau.

Laporan McKinsey bertajuk ‘Teknologi blok rantai untuk rantaian bekalan mesti atau mungkinkah?’ (2017) menggariskan tiga faedah diperoleh daripada penyusunan semula yang beroperasi melalui blok rantai.

Ia termasuk menggantikan proses manual yang perlahan; memperkukuh kebolehkesanan; dan mengurangkan kos transaksi teknologi maklumat (IT) rantaian bekalan.

Menyusuli proses digitalisasi, penyusunan semula juga boleh mengambil bentuk teknologi baharu yang memperkenalkan logistik masa depan.

Sebagai contoh, rangkaian saluran pengedaran bersepadu dan pelbagai modal berasaskan teknologi terowong bawah tanah sebagai ciri utama sistem rantaian bekalan dan dikendalikan oleh digitalisasi boleh diperkenalkan.

Terowong bawah tanah termasuk terowong dasar laut akan membolehkan aktiviti rantaian bekalan berfungsi dengan lancar tanpa sebarang gangguan yang juga berdaya tahan terhadap wabak seperti COVID-19 yang membabitkan pelaksanaan kawalan dan sekatan pergerakan yang menjejas pengeluaran dan pengedaran.

Terowong bawah tanah juga boleh berfungsi bagi mempertingkatkan kesalinghubungan internet dan digital dalam rantau ASEAN, sekali gus memantapkan penyusunan semula bekalan rantaian.

Jason Loh Seong Wei merupakan Ketua Bahagian Sosial, Perundangan dan Hak Asasi di EMIR Research, sebuah badan pemikir bebas yang berfokuskan kepada pencernaan saranan-saranan dasar strategik berteraskan penyelidikan yang terperinci, konsisten dan menyeluruh.

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