SCMAP Perspective is our fortnightly column on PortCalls, tackling the latest developments in the supply chain industry, as well as updates from within SCMAP. On this column, we look at the factors that are hindering greater adoption of technology across the supply chain sector in the country.

The technology element

“Intelligent industries must be supported by smart logistics,” DTI secretary Ramon Lopez said at the beginning of this year’s Logistics Services Philippines Conference, held last week at the Philippine International Convention Center. Thus, part of the focus of this year’s event went towards identifying the role technology plays in making the sector more competitive.

True enough, there are many examples. The event may have squared in on high-concept technologies like blockchain, but the event also dove into more easily-accessible technologies like cloud computing (and it is easily accessible once you realize that Google Drive – which one can use to track inventory, like you do with Microsoft Excel – is one such service). Whether it’s a buzzy technology like robotics, or one that is commonly used like smartphones, technology has, and continues to, allow logistics providers to better serve their customers.

But the impression remains that these technologies are only within the reach of big companies. Perhaps it’s the way we talk about these technologies, of how we focus on the use of automation, for example, to increase the efficiency of supply chains. “But that’s expensive.” Yes, and it’s not the only way. It seems we sometimes fail to mention that some of these technologies have long had a presence here – the use of tracking devices for trucks, for example, which allows us to monitor the physical movements of our shipments. And then there are the aforementioned cloud services, which can also increase collaboration particularly if those monitoring inventory levels are not physically in the same place.

Perhaps another hindrance is our literacy towards technology. We may all know how to use a smartphone, but we don’t necessarily understand the implications of its use – take the 24 hours where everybody was having fun with FaceApp, before panicking upon realizing they may have given up personal information to its developers merely by using the app. Perhaps that drives the impression that technology is reserved for those who are smart enough to understand it, or rich enough to afford it. We do have a long way to go to make people understand that the most advanced technologies are in the palm of your hands – and also how to use the technology responsibly. Once we pass that hurdle, we can truly make the most of what these new advances have to offer.

Yet another hindrance is the environment that enables the acceptance of these technologies – or lack thereof. I noticed this hurdle when I worked for a company that provided automated storage solutions. There were concerns that the solutions were too expensive (which are valid), that it took too long to implement (which makes sense, because to arrive at a tech-based solution that fits your operations, we must understand the whole thing inside out), and that it was too much of a hassle. Why else would most, if not all, of the examples used to demonstrate these technologies come from other countries, and not here? Besides, you might say, we’re Filipinos – we make ways!

Sure, other countries have greater support for businesses – in logistics or otherwise – who look to leveraging technology further. Singapore, for example, shoulders some of the cost of acquiring automation systems, a necessity for a country that is starved of both land and low-level labor. They’ve seen what we now call Industry 4.0 coming long before we in the Philippines have. That said, in recent years, the public and private sectors, independently, have been making moves towards leveraging these technologies further. The government’s upcoming Strategic Investment Priority Plan makes a play towards ensuring technologies – not necessarily high-concept ones – can impact productivity of our more traditional industries, and also provide them access to bigger markets. (Which leads us to think about the high cost of electricity, the abysmal state of our IT infrastructure, and whether these technologies can stand up to natural and man-made calamities – but that’s another column.)

What we now call Logistics 4.0 is emerging because it has to support the slowly-brewing revolution that is Industry 4.0. Any gains made in the continuing advance of industry will dissipate if supply chain networks do not keep up. It is time that more of us recognize that these technologies are essential to keeping our economy competitive, while at the same time recognizing its impact – for better or worse – on the people that also make our economy work. This is when I talk about the need for collaboration once again…