The Supply Chain Management Association of the Philippines (SCMAP) indicated that the local supply chain and logistics industry might require a span of three to five years before fully integrating blockchain technology due to its current lag in digitalization.
During a recent virtual event, SCMAP President Pierre Carlo Curay highlighted the industry’s need to undergo a digital transformation in various logistics processes. He emphasized that essential operations like warehousing, inventory management, purchasing, order management, and financing are yet to be fully digitized, a prerequisite for blockchain implementation.
Explaining blockchain’s function as a secure digital ledger allowing secure information access among various stakeholders, Curay emphasized the necessity of digitalization before transitioning to blockchain technology. He described blockchain’s capability in streamlining data sharing, especially in complex supply chains spanning multiple countries.
Despite being hailed as the “future of supply chain,” Curay cautioned that its realization within the Philippine logistics sector remains distant. Citing research by YCP Solidiance, he noted that a substantial 80 percent of the industry lacks digitalization, with 43 percent still relying heavily on manual and analog methods. Only 35 percent of processes have undergone digitalization, albeit at low to medium levels.
Highlighting the prevailing manual processes such as coordinating transportation, delivery, and inventory through traditional means like phone calls, paper documents, or social media platforms, Curay stressed the urgent need for technological advancements and digitalization.
The challenges posed by pandemic-induced lockdowns further complicated face-to-face interactions within supply chain management, Curay mentioned. He pointed out that among logistics processes, only warehouse management and demand planning have achieved partial digitization, while aspects like inventory and fleet management, transportation operations, order management, and customer service await digital enhancement.
Comparatively, Curay acknowledged the local industry’s lag behind its more digitized regional counterparts by an estimated two to five years. Emphasizing the potential of artificial intelligence (AI), he highlighted its role in improving demand forecasts and optimizing inventory management, urging its adoption within the sector.
Moreover, Curay emphasized the significant opportunities for supply chain and logistics service providers in the burgeoning e-commerce sector. He underscored the increased demand for online shopping during the pandemic, particularly for food and personal care items, alongside the potential growth projections in the e-commerce market.
Citing a Visa survey, which reported a rise in first-time online purchases through applications, websites, and social media channels, Curay emphasized the shift in consumer behavior towards online shopping. He pointed out the e-commerce giants like Amazon, Lazada, and Alibaba as prime examples of logistics companies handling extensive delivery operations.
Earlier pronouncements by the Department of Trade and Industry aimed at bolstering the e-commerce industry to contribute up to P1.2 trillion by 2022, approximately 5.5 percent of the country’s GDP, further emphasize the sector’s potential growth.
