Insights from CeMAT Singapore and Australia: Top APAC Supply Chain Challenges Revealed
At the recent CeMAT Singapore and Australia events, Dematic conducted surveys to identify the biggest supply chain challenges faced by industry professionals across the APAC region. This survey provides valuable insights into the priorities and obstacles currently shaping the supply chain landscape. With supply chains being the backbone of global commerce, understanding these challenges is crucial for developing strategies to enhance efficiency and resilience.
Supply chain professionals are constantly navigating a complex array of issues, from cost management and labour shortages to sustainability and technological integration. The survey results offer a clear picture of where the APAC industry is feeling the most pressure and where opportunities for improvement lie. As companies strive to adapt to rapidly changing market conditions and consumer expectations, these insights will be instrumental in guiding future innovations and solutions.
Key Findings
1. Labour Costs and Availability (28%): The most significant challenge identified by respondents was labour costs and availability, cited by 28% of participants. The supply chain sector is heavily dependent on skilled labour for various operations, from warehousing and transportation to data analysis and customer service. However, the industry is currently facing a shortage of qualified workers, exacerbated by factors such as aging populations, changing workforce expectations, and the competitive job market. High labour costs, driven by the need to attract and retain talent, are putting additional strain on supply chain budgets. Addressing this challenge requires a multifaceted approach, including investment in automation and technology to reduce dependency on human labour, as well as initiatives to upskill existing employees and make supply chain careers more attractive.
2. Overall Rising Costs (18%): Overall rising costs were highlighted by 18% of respondents as a major challenge. This encompasses a wide range of expenses, including raw materials, energy, transportation, and compliance with regulatory requirements. Global economic conditions, such as inflation and trade tariffs, are contributing to these increased costs, squeezing profit margins for supply chain operators. To mitigate this issue, companies are exploring cost-saving measures such as optimising supply chain networks, improving energy efficiency, negotiating better terms with suppliers and using intelligent software and technology to optimise packing and use of transport cube. Additionally, leveraging data analytics can help identify inefficiencies and areas where costs can be reduced without compromising service quality.
3. Use of Space (14%): Effective use of space was highlighted by 14% of participants as a critical challenge. As companies strive to optimise their operations, maximising warehouse and storage efficiency is crucial. Space constraints can lead to inefficiencies, higher operational costs, and limitations in inventory management. To address this, businesses are adopting innovative storage solutions such as high-bay warehousing and automated storage and retrieval systems (AS/RS). These technologies enable better utilisation of available space, reduce handling times, and improve overall warehouse productivity. Additionally, strategic location planning for distribution centres can help minimise transportation costs and improve delivery times.
4. Sustainability Concerns (13%): Sustainability emerged as the fourth most important challenge, with 13% of respondents prioritising it. There is growing pressure on companies to adopt environmentally responsible practices, driven by regulatory requirements, consumer demand, and corporate social responsibility initiatives. This includes reducing carbon emissions, minimising waste, and sourcing materials ethically. For supply chain operations, this means rethinking logistics strategies to reduce environmental impact, investing in sustainable technologies, and adopting circular economy principles. While these initiatives can involve significant upfront costs, they also offer long-term benefits in terms of brand reputation, regulatory compliance, and operational efficiency.
5. Delivering Quickly (8%): Speed of delivery is a critical factor, with 8% of respondents indicating it as a major challenge. In today’s competitive market, meeting customer expectations for rapid delivery times is essential. This is particularly important in the e-commerce sector, where same-day and next-day delivery options are becoming the norm. To achieve faster delivery times, companies are investing in advanced logistics solutions, including automation, technology and intelligent real-time tracking and optimisation software. Additionally, building a network of strategically located fulfilment centres can help reduce transit times and improve service levels. Balancing speed with cost efficiency remains a key challenge for supply chain professionals.
6. Other Challenges: Other notable challenges identified in the survey include:
o Visibility of Data (5%): Having real-time visibility into supply chain operations is essential for making informed decisions. Companies are adopting integrated software solutions that provide end-to-end visibility and facilitate data sharing across the supply chain ecosystem.
o Product Security (4%): Protecting products from theft, damage, and counterfeiting is vital for maintaining supply chain integrity. Implementing security measures such as tamper-evident packaging, secure transportation, and surveillance systems can help mitigate these risks.
o Fulfilment Accuracy (4%): Ensuring accurate order fulfilment is crucial for customer satisfaction and operational efficiency. Companies are investing in technologies such as barcode scanning, RFID, and warehouse management systems (WMS) to reduce errors and improve accuracy.
o Increasing Product Range (4%): Managing a wider product range requires robust inventory management and demand forecasting capabilities. Companies are leveraging advanced analytics and AI to predict consumer demand and optimise stock levels.
Supporting an Intelligent Automated Supply Chain Future
The survey results from CeMAT Singapore and Australia provide valuable insights into the current landscape of supply chain challenges across the APAC region. While labour costs and overall rising costs dominate the concerns, sustainability is also rapidly gaining importance, reflecting a shift towards more environmentally conscious practices. Addressing these challenges will be key for supply chain professionals as they navigate an increasingly complex and dynamic industry landscape.
By understanding these priorities, companies can better strategise and implement solutions to enhance their supply chain operations, ensuring they remain competitive and responsive to market demands.
Dematic works closely with customers to help them address these challenges, offering innovative automation solutions and unmatched implementation expertise to help businesses successfully navigate this ever-evolving landscape.
Dematic designs, builds, and supports intelligent automated supply chain and logistics solutions powering the future of commerce for its customers in manufacturing, warehousing, and distribution. With engineering, manufacturing, and service centres in more than 35 countries, the Dematic global network has helped achieve successful installations for some of the world’s leading brands.
To learn more visit https://www.dematic.com/en-au/
