How Does Data Drive Resilient and Sustainable Supply Chains?

Today, the company have 8 facilities in Penang and two in Kedah (Kulim, Sungai Petani). Our operations are supported by our Global Business Center (GBC) in Bayan Baru, providing shared services capabilities.

How Does Data Drive Resilient and Sustainable Supply Chains?
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Jabil is a global manufacturing solutions company providing comprehensive services to a broad range of industries and in this Q&A Kee Wee Ng, Vice President of Supply Chain Management, Jabil, we discover more about the company, its goals and actions.

Jabil is a global manufacturing solutions company providing comprehensive services to a broad range of industries, spanning healthcare, computing and storage, networking, optics, and telecommunications to automotive, home appliances, capital equipment, defence and aerospace, industrial and energy, semiconductors, mobility, smart homes and more - many of which our Malaysia operations serve.

"Our expertise is in end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights, and global product management, delivered globally by more than 260,000 employees, in over 100 sites across 30 countries," says Kee to Business News Malaysia.

Jabil Malaysia’s total workforce is about 15,000 strong, and our operations in Malaysia began in 1995, in Bayan Lepas, which was also Jabil’s first facility in the Asia Pacific. Today, the company have 8 facilities in Penang and two in Kedah (Kulim, Sungai Petani). Our operations are supported by our Global Business Center (GBC) in Bayan Baru, providing shared services capabilities.

With the company's vast involvement in the supply chains, we had to ask Kee about the current and future trends of digitalised supply chains, especially in improving service, cost and agility while driving organisational changes and operational excellence?

"Talk of localising supply chains closer to the point of consumption, including reshoring, has gained attention since the early days of the pandemic. It’s a seemingly natural response to long shipping delays from overseas suppliers, which have led to inventory shortages and frustrated customers.

"Others are questioning whether some lean manufacturing approaches, such as just-in-time delivery, are still effective given the current challenges," he says.

That said, manufacturers are not quite ready to make sweeping changes to their existing strategies and instead are focused on supplier relationship management and technology investments, enabling them to monitor and adjust their supply chain practices to remain flexible in an unpredictable economic and geo-political climate.

Artificial Intelligence

Collaborative relationships with suppliers, manufacturing solution providers, and other service providers who have the technology, global reach, and capacity to meet their needs are becoming instrumental to business resilience.

Artificial Intelligence Actionable Analytics

Kee Wee Ng, Vice President of Supply Chain Management, Jabil

"As we reflect on how different companies in our supplier ecosystem have responded to disruptions in the past few years, there is no doubt that a digitally enabled connected supply chain with AI actionable analytics built on the foundations of end-to-end visibility, traceability, risk management, constraint and impacting modelling will be the biggest asset for supply chain practitioners. This will drive the need to inject and merge new capabilities, skillsets, and talents to evolve and bring about the next generation of supply chain teams and infrastructure," he says.

How does Supply Chain 4.0/IR4.0 enable factory optimisation and strengthening of sustainable value chains?

The multiplicity of socioeconomic and geopolitical factors — regulations, compliance, tariffs, and the shifting nature of the demographics — all require a supply chain operation that is not just agile but also adaptable for resiliency and growth. Below are two ways in which digital supply chains provide support:

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  • Strengthening sustainable value chains

Customers increasingly demand sustainable products and services and a responsible approach to business practices across the entire value chain. This means companies need to address sustainability across their value chains by continuously improving the delivery of trusted, net zero, and circular engineering, procurement, manufacturing, and after-sales service. The advancement of human and machine intelligence enables businesses to create a digital supply chain that provides visibility across the entire product and operating value chain.

  • Factory optimisation

Further demand in supply chain individualisation and customisation sees the adoption of many more segments. To excel in this setting, supply chains need to master "micro-segmentation" - granularisation of the supply chain into hundreds of individual supply chain segments. Based on customer requirements and capabilities designed in a dynamic, big data approach allows supply chain mass-customisation, provides optimal value for the customer, and helps minimise costs and inventory in the supply chain.

Additionally, an intelligent system – using AI and ML – can receive granular data, interpret the impact, and provide accurate representations of the root causes of potential issues/risks. For e.g, eliminating today's digital waste and adopting new technologies is a major lever to increasing the operational effectiveness of supply chains.

According to McKinsey, the potential impact of Supply Chain 4.0 in the next two to three years is huge - up to 30 per cent lower operational costs and a reduction of 75 per cent in lost sales while decreasing inventories by up to 75 per cent are expected, at the same time increasing the agility of the supply chains significantly

Can you share with us more about robotics in Supply Chain 4.0 and IR4.0?

In 2020, the International Federation of Robotics predicted almost two million new units of industrial robots are expected to be installed in factories around the world from 2020 to 2022. The Malaysia National Robotics Roadmap (NRR) 2021 – 2030 aims to push the country's robot density to 195 robots for every 10,000 workers by 2030. NRR is expected to help step up productivity and reduce the country’s reliance on foreign labour and minimise currency outflow.

As safety barriers and technology such as sensors are improving while costs are decreasing, robotics is playing a role in every part of the supply chain, starting from the extraction of raw materials to the last mile of the supply chain – delivery and retail.

Integrating automation and robotics into the manufacturing industry and supply chain leverages benefits that are simply unattainable with manual operation. While automation integration augments the capacity and capability of the current workforce, manufacturers need to understand the market needs and its customer to determine the best robotic systems with the highest efficiency and operational sustainability, and flexibility.

With more than 50 years of experience being part of an evolving manufacturing landscape, Jabil evaluates current production processes, and designs and builds tailored automated systems solutions for different manufacturing needs.

Where is Malaysia in its IR4.0 strategy in the supply chain?

With 2035 being the maturity deadline for IR4.0, Malaysia has introduced the national policy for IR 4.0, known as Industry4WRD, to assess the readiness level of manufacturing organisations and related services. Under this initiative, the government provides incentives to help transform the Malaysian manufacturing industry to be “smarter, more systematic, and resilient” for migration to IR 4.0.

Assoc Prof Ts Dr. Khairur Rijal Jamaludin, auditor of the Industry4WRD Readiness Assessment (Industry4WRD-RA), commented in November 2021 that presently, companies in Malaysia are not quite ready for Industry 4.0 (IR 4.0) as they need to have the intelligent information and communication technologies capability of a smart factory.

To facilitate the impacts of global supply chain disruption and to strengthen the resilience of the local supply chain, the Malaysian government through its Malaysian Investment Development Authority (MIDA) arm, initiated the supply chain facilitation programme to assist both domestic and foreign companies to address global supply chain disruptions. Designed to create opportunities for domestic companies, the programme also narrows gaps in the supply chain caused by the pandemic, supports multinational companies (MNCs) and Limited Liability Companies (LLCs) in outsourcing their manufacturing activities to domestic companies, developing and upgrading domestic companies for the growth of domestic investments and encourages the adoption of automation and 4IR by MNCs, LLCs, and their vendors.

To fully embrace the benefits of IR4.0, a concerted effort will have to be made by respective governments and industry stakeholders of ASEAN states in addressing the lack of skills and disruption brought about by digitalisation and automation. A strategic industrial direction that focuses on developing talents, including public-private partnerships and evaluation of human capital requirements in the region, is required.

What is Jabil’s approach to the future of manufacturing and how does it impact your people and the operational strategies? Also, what’s next for the contract manufacturing space?

Southeast Asia is an attractive region for manufacturers due to its geographic, regulatory, economic, and demographic advantages. While favourable factors present myriad opportunities for businesses to expand their manufacturing operations in the region, gaps must be addressed to help build resilient supply chains that can withstand unexpected disruptions.

Through Jabil’s ongoing digitalisation – accelerated during the pandemic, has created a community of engineering and operations leaders who are now armed with a greater understanding of modern enterprise solutions, collaboration tools, and cloud-based capabilities. With a predictable operating environment where skilled talents work safely alongside machines that can learn, think, and act, Jabil’s initiatives across manufacturing, industrial and test engineering are in line with the government’s push towards high-end manufacturing and services.

Additionally, Jabil looks to continue playing a visible role in collaborating via public-private and academic partnerships, creating employment opportunities for Malaysians, and actively leveraging technology transfer opportunities across our global operations.