Singapore – Supply chain hub for emerging markets
For such a highly developed economy, Singapore continues to grow at an impressive pace and logistics is a big part of that growth, this according to a recent White Paper from Transport Intelligence that discusses Singapore’s role as a supply chain hub for emerging markets. Expansion in Singapore over the second quarter of 2013 saw annual growth rate of 3.5%, yet even this is down slightly on the average 5.6% seen between 2007 and 2013.
A number of factors are driving this expansion including ‘China trade’, but also the new prosperity of consumers in South East Asia and the city state’s positioning in fast growing sectors such as electronics.
Logistics is central to this growth. The region is dependent on world trade and the efficiency of its container port, airport and oil terminal have been key to their success. However, South East Asia has seen a large expansion in modern transportation infrastructure and now supply chain managers have alternatives when it comes to finding good quality sea terminals or airports.
The other side Singapore’s story is its role in manufacturing. Singapore’s most important manufacturing sector is electronics which accounts for 5% of GDP and 25% of all manufacturing, with pharmaceuticals the second largest sector.
Singapore’s expense is tempered by its availability of management and service skills like quality of implementation, good planning, ability to manage temperature control and shipment traceability for product recall. According to the report, this experienced workforce delivers a zero-defects mindset and an understanding of customer service that can be hard to find in this region and is a big contributor to this success.
In fact, firms often see Singapore as a risk mitigation deployment point for the entire Asian region. This allows them to create a back-up plan to deal with a variety of supply chain risks from congestion in China to flooding in Thailand.
The report predicts that this is likely to increase as the assembly of electronic products shifts from China to less developed locations such as Laos – which has seen significant investment recently by the camera maker Nikon. Singapore’s role is increasingly to act as a coordinator, a source of expertise and stability rather than just physical assets, the report predicts.
Click here to download “Singapore – A supply chain hub for emerging markets and beyond.”
