Why supply chain management has entered the digital age

By Tobias Grabler

Why supply chain management has entered the digital age

Until recently, the central theme of supply chain management was to be able to supply global customers on a “just in time” basis, according to a recent report by PricewaterhouseCoopers (PwC). Momentous shifts in geopolitics, new workforce challenges and pressures to provide sustainability reporting to stakeholders have transformed supply chain management to a “just in case” model, according to PwC. Resilience and flexibility must be built into the business model for supply-chain-focused businesses, and Hong Kong has a lot of these.

Digitization to drive insights and reduce risks has become much more than just a luxury. Hong Kong is becoming a lighthouse in the region for tech and sustainability. The Covid-19 pandemic tested its capabilities to the core, however. Hong Kong-based supply chain managers faced multiple unforeseen events, including maritime congestion, raw material shortages, remote working, and labor challenges. Those organizations that had at least some digital processes in place managed to navigate problems and minimize the downside of disruptions. 

Digital transformation is becoming a necessity

Complete digitization in the supply chain is a journey, rather than one key moment. In a perfect world, it would be driven by an overall strategy for the entire organization. However, more often than not, it often starts within the critical processes in an organization, and grows from there. There are many appealing incentives to digitization. Those who do will enjoy fast speeds, sharper precision, and minimised costs. Important decisions can be made more quickly and with certainty, and operational efficiency is boosted. Often, teams working with Excel spreadsheets, emails, and messaging apps drive teams into side channels, making cooperation cumbersome and time consuming. Lack of data visibility and insight across your supply chain will inevitably bring about a decline in speed to market and confine your capacity to drive the business forward. The lack of immediate access to reliable, accurate information and the disadvantages of manual techniques are restricting opportunities for development and improvement. Organizations need continual access to top-quality data to remain competitive.

China and Hong Kong’s digital supply chain: Innovation and technology

Hong Kong is one of the world’s major sourcing hubs. Topo Solutions is a Software as a Service (SaaS) provider that offers a highly customizable supply chain platform for cloud-based remote collaboration, process automation and advanced analytics, with a low-code technology that makes it easy for users to adapt the platform to their needs. Topo was set up in Hong Kong in 2012, to have better access to its strong mix of international retailers and brands with sourcing and supply chain operations based in the city. Digital transformation is a key driver for supply chain management in China and Hong Kong, where both local businesses, and international companies with sourcing offices in Asia benefit from the innovative and technological solutions offered by these regions. With their strong focus on innovation and technology, the arc from Hong Kong and China to Southeast Asia and South Asia has embraced the potential of digital solutions to revolutionize supply chains.

In a recent report on Hong Kong’s thriving innovation and technology ecosystem, InvestHK noted:  “The Hong Kong Government has spearheaded I&T development with more than HK$150 billion invested since 2017.” Hong Kong offers world-class R&D infrastructure, top-notch academic research, multi-cultural talent pools and strong government policies and incentives, according to the report.

From leveraging artificial intelligence to adopting low-code platform and embracing cloud-based technology for enhanced traceability and transparency, China and Hong Kong are leading the way in harnessing the power of digitization to optimize supply chain operations. This proactive approach towards digitization enables businesses to mitigate risks, increase efficiency, and gain a competitive edge in the global market. By staying at the forefront of emerging technologies and embracing digital transformation, China and Hong Kong exemplify how a comprehensive approach to supply chain risk management extends to leveraging digital solutions and innovations.

We look at three key focus areas when working with clients to digitize supply chain processes – engaging leadership of the firm, real-time cloud-based solutions and low-code technology.

  • Emphasizing leadership engagement

Active engagement with all stakeholders, from top to bottom, is crucial for the successful implementation of a new system. Aligning the transformation with the overall business strategy ensures buy-in and active participation throughout the process. By involving leadership and key personnel, the foundation for the new arrangement becomes stronger, fostering acceptance and commitment.

  • Adopting low-code technology

A low-code platform simplifies managing the processes for customers, end-users, in-house IT teams. Even individuals with limited IT experience can easily navigate these platforms, as they present user-friendly interfaces with drag and drop options. By eliminating the need for constant vendor involvement, low-code technology saves time, reduces costs, and empowers customers to innovate and design their own solutions.

  • Leverage cloud-based solutions

End-user spending is projected to reach almost US$600 billion by the end of 2023, according to the latest forecast from Gartner, Inc. It is a booming and growing industry, and for good reason. Cloud-based solutions allow us to access software, store data, and develop new applications 100% remotely. There are three key segments within the cloud computing market – SaaS, Infrastructure as a Service (IaaS), and low-code platforms. Organizations that leverage these tools will reap the benefits.

Become empowered by your data

Piles of data are generated at every step in the supply chain – from sourcing suppliers or products, to final delivery to the customer. This data comes from multiple sources, at various times and in many sub-systems. Attempting to manually manage and process this data can become overwhelming, time-consuming, and complex.

However, this data holds immense value. Understanding it is key to improving your operations. Equally important is ensuring the accuracy of this data – you can’t make strategic decisions based on inaccurate information.

This is where data analytics tools play a crucial role. By selecting the right solution, you can easily gain valuable insights in real-time that drive efficiency, productivity and ability to avoid bottlenecks, or other predictable challenges.  Instead of being burdened by your data, you will be empowered by it.

Metrics that matter

Every organization will have differing supply chain goals, driven by their own priorities and operational structure. However, some elements prove to be consistently valuable across the board, and we find that they include supply chain metrics, sustainability data, and economic conditions faced by the firm. Supply chain metrics capture critical data points along the supply chain about supplier performance, factory locations, product development, quotations, audits, inspection, order, shipment, and delivery. Sustainability data covers a huge scope, from chemicals, factory workers’ health and safety, to carbon emissions, greenhouse gas (GHG) emissions, water usage, packaging, and other key sustainability metrics. Economic conditions are costs, asset and inventory tracking, and sales data, to name just a few of the important economic data points that should be captured.

According to Boston Consulting Group, the global business consultancy, only 30% of companies manage to make their digital transformation a success. Transformations succeed when they are incremental, cost-effective, and sustainable. While there are challenges, there are some common mistakes to avoid that you should keep in mind.

Along with ensuring your transformation is aligned with strategy, and getting leadership on board, you also need to educate your team, so they adapt the new processes. Failure to do so will cause issues, as will the absence of a structured plan and the insufficient allocation of dedicated resources. Of course, one of the most crucial mistakes to avoid is choosing the wrong technology provider.

Successfully rolling out a digital transformation is not easy, but it is worthwhile, and progressively becoming a necessity to thrive in today’s post-pandemic world. Since its establishment in 2012 by CEO Benjamin Eberle, Topo Solutions has expanded its presence in Hong Kong by increasing its office space and has also opened a new office in Los Angeles. As a part of our ongoing growth we have recruited new staff, including 42% women, reflecting our commitment to diversity, equity and inclusion. We doubled the size of our team in 2022, which made it possible to push ahead with innovations to make our supply chain management more user friendly, efficient, collaborative, data driven and sustainable. We look ahead to growing with Hong Kong as a pioneer in the new digitized environment of supply chain management, reflecting its energy and ambition as a hub not only of supply chain management but also international capital, innovation and technology.

Tobias Grabler is the Chief Operating Officer of Topo Solutions, based in Hong Kong. He has over a decade of experience in buying, e-commerce, and sourcing roles for one of the largest European multi-label retailers and online platforms. His expertise allows Topo to have an in-depth understanding of the entire value chain – from manufacturing products to selling them to consumers online and offline. At Topo, he leads the global commercial team and is responsible for marketing, business development, account management, and solution design and delivery among others. His focus areas include Digital Transformation, Business Process Optimization, and Change Management.