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Supply Chain Asia Forum 2019: Digitalization of the Supply Chain World

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The Supply Chain Asia (SCA) Forum 2019 which held on 10 and 11 September 2019 in Resort World Sentosa, Singapore, offers knowledge from professionals of the Supply Chain industry and related roles. Speakers and moderators narrated their stories and offer insights into how we can better adapt to digital transformations and volatile market changes. I am honoured to attend and learn from global supply chain practitioners of challenges and developments in digital transformation. Would like to share discussions and key takeaways of the panel "Evolution of Procurement in a Digitally Disrupted World" from Philips and IBM leaders on 10 September. Keen to learn from professionals in as well. 


Philips (Speaker: Mr. Ramesh Krishnamoorthy, Head of Procurement, APAC, Japan & India) 
As Philips aims to improve the lives of three billion people of the world’s population with its innovative products and services by 2025, it collaborates with healthcare institutions and systems to garner their inputs, truly understand their concerns, and thus provide integrated products and solutions. The establishment of Software as a Service (SaaS) and Product as a Service (PaaS) models help the organization to engage with stakeholders and assume co-accountability to drive improvements in cost productivity and patients’ recuperation. 

According to a snoring study by the British Snoring and Apnea Association, almost 25% of women and around 40% of men snore, a significant sleep disturbance. To solve this problem, Ramesh highlighted the SmartSleep Snoring Relief Band as the company’s latest innovation to provide solutions for addressing 80% of sleep issues. Worn in a soft band tucked around the lower chest, it has a sensor that monitors the wearer’s sleeping positions. When it detects the wearers change positions and lie on their backs, it utilizes adaptive vibrations that prompt the wearers to move onto their sides to avoid the snoring position of lying down.  

By breaking away from its long-established history as a manufacturer of consumer and household electronics, Philips is now evolving to an organization that offers IoT healthcare solutions with a key focus on connecting its value chain. The IoT solutions and services provide timely and accurate information sharing among its value chain partners that facilitate smooth coordination. With the establishment of the HealthSuite Digital Platform, Philips Japan’s cloud platform with IoT real-time connectivity, it employs Internet-of-Things (IoT) technology to help to overcome declining medical practitioners in internal medicine and surgery. 

In its APAC Centre in Toa Payoh, Singapore, Philips develops the Electronic Intensive Care Unit (eICU) program Telehealth for the intensive care units of hospitals and clinics. Building a strong database with accurate predictive algorithms, the program successfully diagnoses patients’ illnesses and prioritize for earlier or timely interventions. It also provides clinical training, workshops and 24-hour diagnostics helpdesk to guide hospitals’ and clinics’ staff and improve the healthcare institutions' equipment and services. Subsequently, the eICU program enabled successful clinical transformation with reduced mortality, hospitalization length and costs. Valuable insights are found on

The digitalization of procurement in upstream and downstream partners of Philips’ Healthcare Division helps to improve the organization's value chain with healthcare institutions. The division evolves with consumers' diverse needs in rural hospitals and clinics in Japan, improving healthcare standards in rural municipalities and help residents living in these areas. The information shared among its preceding upstream partners (suppliers and vendors) and subsequent downstream partners (hospitals, clinics, remote communities) greatly improve the lives of Japan’s rural demographic. Philips Healthcare garnered positive reviews from institutions and patients in the aspects of healthy living and home care support, illnesses’ prevention, diagnosis, and treatment. 

The available pool of medical practitioners concentrates in Tokyo; thus, hospitals and clinics constantly have the difficulty of recruiting and retaining personnel beyond Tokyo. The company maintains its number 2 ranking of Dow Jones Sustainability Indices (DJSI) in 2019, where it scored 82 out of 100 points in the Healthcare Equipment and Services industry sector. Moving forward, as a top health-tech company, Philips will continue to develop innovative processes, train human resources and build human capital to improve healthcare sustainability. 

IBM (Speaker: Mr. Philip Cheng, Vice President, Services and General Procurement, Asia Pacific) 
Procurement enables products, services, and information to flow. Hence, it is a value enabler that enables to create values and direct their flows throughout the value chain. Evolving from a mechanistic to an organic organizational structure, the decentralization of decision-making minimizes the time taken for seeking instructions and advice from headquarters in the US. This consequently fosters the organization to be more agile driven in anticipating local stakeholders’ requirements and responding to local market fluctuations. 

By focusing on geographical concerns with small squads comprises of Procurement staff and Solutions staff, IBM’s staff work closely together in co-locations with local stakeholders to better understand their concerns. Hence, able to bridge the gap between markets’ demands and supplies’ availability with more accurate forecasts. Nurture employees with sufficient technical and thinking skills and provide them with self-empowerment to access situations critically, reach consensus with colleagues and make optimal decisions. 

Supplier development investment that collaborates with suppliers to provide solutions that are beyond cost savings, which was the focus of procurement in the past. Leverages on the Blockchain ecosystem to enhance its value chain network that incorporates suppliers and buyers, resulting in almost 70% in time savings, from 45 days to 14 days to approve a supplier and get it on board. Moving forward, IBM is working towards achieving a 3-day period, more than 90% of time savings. The encrypted system allows smooth tracking of upstream suppliers and downstream buyers and safe information sharing. With the information safely shared, IBM teams can detect possible technology failures and brainstorm viable solutions to prevent or minimize failures. 

Philip also pointed out a challenge of digitalization: who should own access to data. When competing suppliers produce data and solutions that are similar, it causes conflict situations. Suppliers may have brand and data integrity concerns in collaborative data ownership with other suppliers. Hence, the technology firm works on enhancing data security with high encryption and strict access controls, as well as sustaining trust and transparency with the holistic management of technological risks and optimal allocation of risk ownership. Adding on, he mentioned that managing the physical supply chain is as important as innovative solutions; thus, it is important to align physical activities with digital solutions well. 


Lessons Learned 
A strong link of an organization’s supply chain is only as strong as its weakest link, as a supply chain is connected by functions, partners, and vendors. A weak link will cause potential bottlenecks and bullwhip effects. Such risks can occur within the value chain where members focus on creating values to products and services, or throughout the entire integrated supply chain of activities to get products, services and information from original sources to end consumers. Hence, the need for integrated digital solutions to help businesses to transform their physical and information assets. 

While we embrace and immense in digitalization transformation projects, we need to focus on the rationale behind the transformation, evaluate technologies that are practical and scalable across affected product families and manufacturing facilities. Lots of research work required to carry out to analyze internal and external stakeholders’ returns and sustainability of new technology implementation. 

Equally important, organizations need to invest in human capital by ensuring proper and gradual training, needful individual coaching, assessing and addressing employees’ concerns to ensure a progressive and smooth transition. As employees have untapped potential and may have understandable apprehension or hidden obstacles that prevent them to learn technologies, organizations’ managers and leaders need to exercise interpersonal skills to uncover employees’ concerns and work values diplomatically. Employees may discover they possess untapped knowledge and transferable skills to help them to learn new technological competencies effectively. 

Consequently of ensuring machines’ ease of user interfaces and interoperability across the business and operational functions, organizations will be able to minimize employee resistance to changes and establish humans’ trust in machines. Therefore, organizations will be capable to implement technological changes effectively. 

Posted on: October 01, 2019 05:06 PM | Permalink

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