This article was originally published on FutureIoT.
The disruptions brought by the COVID 19 pandemic have shown gaps in the global supply chain. As a major shipping and logistics hub, Singapore seeks to close these gaps in its supply chain ecosystem that would accelerate the city’s digital transformation.
The city recently unveiled plans to pilot a common data infrastructure designed to encourage a more robust supply chain for international trade flows. Companies from both private and public sectors will join the trials that aims to improve data efficiencies in financial processes and container flow.
The initiative is spearheaded by the Alliance for Action (AFA) on Supply Chain Digitalisation, one of the seven industry groups formed in June to seize opportunities amid the global health crisis. The other alliances look after key areas such as robotics, e-commerce, education, construction and real estate, and environmental sustainability.
“A common data infrastructure is part of our drive to put in place digital utilities as baseline infrastructure for the digital economy. Similar to their physical counterparts, digital utilities provide common standards and functionalities to enable data to flow and transactions to be made. Companies and platforms will also be able to build additional services and offerings on top of these open digital utilities. This brings about more value and enhances capability for all industry participants,” Lew Chuen Hong, chief executive, Infocomm Media Development Authority (IMDA), said in a media statement
The AFA on Supply Chain Digitalisation, jointly led by PSA International and Trafigura, engaged with more than 50 supply chain players in the last three month to identify pain points, opportunities and solutions across the entire ecosystem.
It emerged that a reconfiguration of trade flows has occurred in the wake of COVID-19, exposing vulnerabilities and opportunities for Singapore. Specifically, significant inefficiencies have been identified in physical event, documentation and financial information flows across the value chain. These inefficiencies caused considerable cost and asset underutilisation that all enterprises.
As a result of its consultations, the alliance concluded a common data infrastructure was necessary to resolve pain points in the ecosystem. It added that the common data platform will facilitate data sharing and will enable all businesses l to “plug and play” into the infrastructure easily.
“For Singapore to remain relevant in the growing digital economy, it is laying a common foundational layer with digital utilities that enable businesses to move into the digital domain, build a stronger and more robust supply chain ecosystem for international trade flows, thereby advancing our position as a global supply chain and trading hub,” the AFA said.
According to the alliance, the common data infrastructure will augment existing data sharing systems and platforms by connecting the supply chain end-to-end, creating visibility and transparency, linking importers/exporters, shipping companies and financial institutions. It will provide all companies with access to exchange data in an efficient, trusted and secured way.
Besides providing timely accessibility to all players across the value chain, the platform will be scalable and will be able to interoperate with local and global data platforms.
Two pilot applications unveiled
The IMDA and other government agencies will work with the AFA on a pilot to develop this common data infrastructure.
Kicking off the initiative, the AFA revealed two pilot applications will be developed to enhance trade finance and container flow.
Financial institutions (FIs) currently have limited visibility over the physical movement of goods in the supply chain, which reduces their ability to address demand from shippers. The common data infrastructure will allow them to provide and access data directly from trusted parties, in order to reconcile trade details with the physical movement of goods. For sellers, digitally tracking the physical movement of their goods throughout the supply chain will improve visibility and traceability across the trade process, allowing them to make better decisions.
On the other hand, logistics players face frequent congestion at container flow nodes, such as depots and warehouses, due to limited end-to-end visibility of container flows. This results in long waiting times and therefore sub-optimal asset utilisation and additional cost.
Through the common data infrastructure, major shipping lines, depot operators, warehouse operators and hauliers can share (with consent) key operational and event data such as container bookings, time slot bookings, job management and other data to enhance end-to-end logistics operations visibility. This will improve planning and asset utilisation, efficiency and productivity, reinforcing Singapore’s place as a logistics hub.
Furthermore, the common data infrastructure will reduce dependency on physical documents, improve data flow and builds greater trust across the trading and financial communities.
“During this pilot we are working alongside Singapore banks to access data directly from reliable sources and parties to reconcile trade details with ease and potentially to detect and mitigate trade related fraud,” said Tan Chin Hwee, CEO-Asia Pacific, Trafigura Group.
He added that building a “digital twin” of the physical movement of goods will improve visibility across the trade process, and help stakeholders reduce dependency on physical documents in the long term.
According to Tan Chong Meng, Group CEO, PSA International, Singapore’s ability to rally together multiple stakeholders to bring a common vision of supply chain end-to-end visibility to fruition will set the city apart as a trusted global trade and logistics hub.
“The development of a common data infrastructure is our opportunity to enable large and small businesses to optimise their supply chain flows through Singapore, promote long-term sustainability as a key nodal hub in the global supply chain, and at the same time, support Singapore businesses in expanding their export markets,” he said.
Other companies that are participating in the initiative include DBS, ExxonMobil Asia Pacific and Standard Chartered Bank (Singapore).
“Establishing a common set of digital standards and guidelines around data sharing across trade platforms will be key to achieving enhanced interoperability, secured data flows, and a seamless e-invoicing experience for trade participants,” said Patrick Lee, CEO, Standard Chartered (Singapore).
Tan Su Shan, group head of institutional banking, DBS, noted that close collaboration among all partners in the trade ecosystem is needed to pave the way to digitalisation of the supply chain. To achieve this, he underscored the need for all industry players “to accept digital data as a trusted medium of exchange and communication”.
“This makes it even more critical today for financial institutions and trading partners to work together in the development of a common data infrastructure to enhance efficiencies and remain competitive in the new normal.”
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