Increasing distances between production and purchase, plus continuing advances in technology have made global supply chains the lifeline of modern businesses. By taking your supply chains into new regions and adopting the latest innovations, your company has the chance to keep ahead of the competition. This report examines how harnessing both elements can help your business meet its strategic challenges today, and prepare your global supply chains for the future.
THE FUTURE OF GLOBAL SUPPLY CHAINS: NEW TECHNOLOGIES IN SUPPLY CHAIN MANAGEMENT
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Contents
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1. Introduction
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2. Challenges in China and the Asia/Pacific region 2.1 Top 4 Tech Trends: Cloud, IoT, 5G, AI 2.2 Tech Topic 1: Cloud Technology 2.3 Tech Topic 2: Internet of Things (IoT) 2.3 Tech Topic 3: Cybersecurity 2.4 Tech Topic 4: AI and new emerging technologies
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3. Conclusion
1. Introduction Increasing distances between production and purchase, plus continuing advances in technology have made global supply chains the lifeline of modern businesses. By taking your supply chains into new regions and adopting the latest innovations, your company has the chance to keep ahead of the competition. This report examines how harnessing both elements can help your business meet its strategic challenges today, and prepare your global supply chains for the future. Supply chains are branching out into more remote regions. Production is migrating to emerging economies, such as Indonesia and the Philippines. As a result, processes become more complex. Now there are different trade rules to respect, while applying the same quality standards throughout your business infrastructure. Meanwhile, digital transformation projects such as cloud technologies, the Internet of
Things (IoT), cyber security and artificial intelligence (AI) are attracting attention from forward-looking businesses. That requires increasing amounts of IT budget to make them happen. Many supply chain operators have already recognised the potential of these developments, and are introducing technologies that drive real competitive advantage and efficiency gains. These complex IT projects depend on many factors for success, and come with associated risks, especially when implementing a secure and reliable IT infrastructure. Our report aims to help you benefit from these opportunities and make informed decisions for your business. Read on for insight into the challenges in relation to China and the APAC region and the technology areas currently driving innovation and development.
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Challenges in China and the Asia/ Pacific region
The APAC region is a very important market for internationally operating companies. Much of the world’s manufacturing output (Global Manufacturing Output) is in the APAC region with China ($4 trillion) and Japan ($1 trillion) as the two leading nations, followed by South Korea (approximately $500 billion) and India ($400 billion). 1 APAC countries are making great efforts to reduce regulatory hurdles and improve trade between countries, such as with existing free trade agreements like ASEAN or CPTPP, or with new planned treaties to promote the free movement of goods and reduce costs. 2 Despite these great efforts, very many companies still fail to reap the corresponding benefits. This is mainly due to the telecommunications infrastructure and IT networks. To ensure success, it therefore makes sense to work with local partners who offer reliable network services and can provide customised solutions and services thanks to strong technical knowledge.
As a result, you benefit from professional support for your IT projects and enjoy numerous advantages:
9 Get the necessary know-how to deal with regulatory hurdles.
9 Predict and prepare for possible failures in the future
9 React quickly to new circumstances
9 Seize new opportunities amidst exponentially evolving technologies
1 Mapping Countries Manufacturing Output: China’s Superpower vs. the World
9 Identify potential early and implement projects successfully
2 Rethinking supply chains in Asia Pacific
1 Mapping Countries Manufacturing Output: China’s Superpower vs. the World 2 Rethinking supply chains in Asia Pacific
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3 Despite COVID-19, European companies enjoy a resurgent market in China
Top 4 Tech-Trends: Cloud, 5G, KI, IoT As companies invest in their global supply chains to bypass existing bottlenecks, cut costs and make the most of the latest technologies, perhaps the most important business component is IT. Essential to minimise the risks and keep all parts of the business connected, IT teams are also implementing the trend across all industries to break down silos and optimise processes using a holistic, digitally-integrated approach.
Steadily growing customer demands for quality and speed 4 are driving increased operational complexity, with a need for logistics to become significantly more efficient. That needs companies to focus on investments in transport management systems (TMS) and inventory control. Four areas dominate current discussions on IT-tech strategies for global supply chains.
Tech Topic 1: Cloud Technologies
Modern cloud solutions offer companies a platform that provides them with an overall view of all the increasingly complex processes within global supply chains. From production status to transport monitoring, to communication between their subsidiaries.
Migration to the cloud could give your business a clear competitive advantage. It’s wise to involve an expert partner for successful implementation and realisation and to ensure you fully exploit the potential. Experienced consultants understand that cloud migration is not only about integrating the solution into existing processes but also about optimising them. When supply chains are involved, your trusted partner also needs experience with the operation of cloud networks across regional borders. Telecom (Europe) said they have moved some IT services to the cloud or plan to do so, only 8% have already migrated all their IT applications to the cloud. 7 • In Europe, 41% of companies use cloud services, but mainly for email and file storage. 8 This is where many businesses are lagging, and the opportunity for real competitive advantage opens up: • According to one study, 22% of companies still use Excel to plan their logistic s. 6 • Although half of all companies surveyed by China
59% of the companies surveyed see an increase in IT costs - whereas only 4% forecast a decrease.
With cloud technology, your business can:
• Send and receive data across an entire global trading system • Improve productivity and efficiency, using data to plan, monitor and analyse every step • Save costs and resources by eliminating the need to purchase and maintain complex hardware.
6 Cloud Computing in Supply CHain Management 7 Supply Chain Europe Virtual 2021 8 Cloud Computing - Statistics on the Use by Enterprises
Company focus
• 26% want to develop a unique selling proposition
• 14% Meeting new and increased customer demands
• 8% Keeping pace with the competition 5
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4 Future of supply chain: The road to everywhere 5 Logistics and Supply Chain Technology Report 2021
Tech Topic 2: Internet of Things (IoT)
Supply chains depend on diverse process elements: from factory output, to warehouse inventory figures, to the availability of shipping containers and other transport. The Internet of Things (IoT) is a network of interconnected devices and sensors that collect information and make it available regardless of location, for example, a warehouse that can independently report its fill rate. In the global supply chain, the Internet of Things helps companies to set up transparent and efficient processes and to detect blockages at an early stage. 9 The APAC region leads the world in IoT growth at 17% year-on-year. 10 According to a recent study, about 39% of the companies surveyed are already using these technologies, mostly for real-time location
tracking and monitoring warehouse conditions. The take up of IoT technologies is expected to increase with the roll-out of 5G networks, and as businesses understand the company-wide optimisation opportunities of predictive maintenance, runtime prediction or new business models like “Products-as-a Service”. With the rapid global adoption of the 5G standard, devices are becoming smarter and offering a wider range of international business applications. As with any emerging technology, a partner who has experience in managing global IoT networks will smooth the introduction across your business locations and help you master the complexity.
9 The Internet of Things: Application for Businesses 10 Supply Chain Europe Virtual 2021
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Store with warehouse Automated and safe processes thanks to robotics Automatic inventory
Smart Factory Intelligent manufacturing processes Extended maching lifetime thanks to predictive maintenances Forecasts and automated adjustments
control using RFID tags Real-time monitoring of activities and events
Without sufficient security, information can be viewed and manipulated by third parties.
IT professionals surveyed by Confluera cited cybersecurity concerns as the biggest challenge to
implementing cloud and multi-cloud solutions. 13
Potential consequences Monetary losses Downtimes Production and delivery bottlenecks Difficulties in meeting agreements or safety requirements from suppliers and customers
Transport Real-time check of location and availability of means of transport Shipment tracking and predictive analytics Optimal use of resources
Head Office Integration of all applications and devices into on IoT platform Continuous evaluation of data streams Make data-based decisions React at an early stage
Rapid implementation of 5G is expected throughout the ASEAN implementation of 5G can be expected. Singapore is the forerunner, closely followed by Vietnam, Thailand, Malaysia and the Philippines. 11
Tech Topic 3: Cybersecurity
Digitised and automated processes are already bringing many benefits to global supply chains. However, these new technologies also create new risks and hazards, as connections become more vulnerable to cyberattacks. For example, IoT devices can become the target of cybercriminals who want to take them over and turn these devices into botnets – network devices on which so-called malware is installed. Devices that have not been set up securely face a high risk of being used for phishing scams, data theft and other fraud. 12
Manufacturing and logistics companies are increasingly affected by cyberattacks. In APAC alone, 54% of companies have had computer systems security barriers bypassed in the last three years.14 These attacks don’t just harm your day-to-day business, they can also damage your reputation with clients, customers and suppliers. Professional cybersecurity consultants should be considered an essential – rather than a “nice-to-have” – when building your team of trusted IT partners.
Manufacturing and logistics companies are increasingly affected by cyberattacks. In the APAC region alone,
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11 Investing in ASEAN’s Digital Landscape: New Opportunities After COVID-19
12 Supply chain attacks show why you should be wary of third-party providers
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13 2022 Cloud Cybersecurity Survey Report 14 Study by Reuters Events in cooperation with China Telecom (Europe): State of Cybersecurity in APAC: Small Businesses, Major Threat
Conclusion
Tech Topic 4: AI and emerging technologies
In a world where a business’s customers, workforce, expertise and finance can be spread across many countries, reliable supply chains with truly global reach are vital to success. Innovations such as IoT, AI, the 5G standard and cloud technologies can help companies improve the transparency of their global logistics operations, make their processes more efficient and so achieve significant competitive advantage. The challenge is to innovate while keeping networks and customer data secure and operations in line with the laws and regulations of every operating region.
Start by choosing a technology partner that can help your business secure the benefits of the manufacturing advantages of the China / APAC region while overcoming some of the region’s technical challenges. China Telecom (Europe) is available as a one-stop shop for global IT services. As a leading telecommunications provider, China Telecom Europe is your digital silk road between Europe and the markets and factories of China and Asia Pacific. We are an expert partner in the APAC region for your digital transformation projects, wherever and whenever you need telecom infrastructure and technology services. Our experience of serving over 160 million 5G customers will underpin your success, and our European-based customer service teams are ready to support you.
The growth of global supply chains is exacerbating the already-complex interconnection between physical flows of goods and external influences, such as the Covid 19 pandemic or market fluctuations, and so making management significantly more difficult. That’s put the construction and maintenance of robust supply chains right at the top of the task list for successful businesses. Emerging technologies such as Artificial Intelligence (AI) and Machine Learning have an important role to play in addressing these challenges, as they offer entirely new opportunities:
• Learning and predicting to plan every step of the supply chain
The introduction of AI and ML-based solutions is still expensive, the barriers to success are very high, and reliable partners who can fully support the process are invaluable. According to a study by McKinsey, over 60% of recent AI introduction projects ran over time or over budget.16 Look for a partner with a proven record in successfully implementing such innovative new technologies and achieving the desired corporate goals. • Enabling data-based decision-making in the face of unexpected developments and unpredictable times.
How can your business succeed?
9 Introduce IoT, cloud, 5G and AI technology to provide the necessary end-to-end view of supply chains, add efficiencies at every stage, and develop a clear competitive advantage. 9 Work with trustworthy partners, who have technical and regional expertise, to build an IT infrastructure that is robust and reliable, resilient to security risks and adaptable to business needs as they evolve.
• Automating basic document and data processing
• Powering robotics for use in production, warehousing and transport
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CHINA TELECOM (EUROPE) China Telecom (Europe) offers a wide range of connectivity solutions and services to make your
With over 20 years of experience, we are a trusted partner in building global operations. Through strong partnerships with numerous hardware and software providers, we help you build a secure, efficient and reliable digital infrastructure that adapts precisely to your requirements. This enables you to master the challenges of digitalisation and fully exploit the potential for your industry. With on-site support in 21 locations across Europe, we are happy to provide you with expert advice in your language.
business ready for a connected future. With the Digital Silk Road, we connect the Asia-Pacific region to the world: We provide bilateral and secure connectivity to more than 100 countries using a robust infrastructure network of land and submarine cables and a comprehensive fibre optic network. We offer a broad portfolio of high-quality and integrated solutions for multinational companies and operate the largest IoT network in the world.
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