KUALA LUMPUR, Nov 6 — Logistics players need to adopt a new business model to survive the COVID-19 pandemic that has disrupted the supply network.
In this regard, it is imperative for them to embrace digital transformation and keep up with the growth of e-commerce, said the Ministry of Finance (MOF).
In its Economic Outlook 2021 report released today, the ministry said logistics players need to ramp up their performance and simultaneously conform to strict guidelines in the new normal.
In this regard, MOF said Logistics 4.0 will enhance operational efficiency by reducing time and cost for goods to reach consumers and subsequently increase the competitive advantage of domestic firms.
“The adoption of Logistics 4.0 would accelerate convergence with global supply chains and help key export industries connect with international markets,” it said.
Logistics 4.0 is defined as a specific application connecting machines, products,systemsand people that can share information and manage themselves with each other.
The report also referred to data from the Department of Statistics that in 2019, the logistics industry expanded by 6.8 per cent, contributing RM53.7 billion to the country’s Gross Domestic Product.
It also acknowledged that the domestic logistics industry is still facing various challenges such as inadequate infrastructure and limited internet connectivity, low adoption of digitalisation, burdensome regulations, lack of skilled workers and external factors such as the COVID-19 pandemic.
Furthermore, it said, Malaysia’s information and communication and technology (ICT) infrastructure lags behind the global standard, especially in rural areas.
“High cost, unstable internet connectivity and low digitalisation hamper efficiency and competitiveness of Malaysia’s logistics firms.
“In addition, the industry lacks expertise and skilled workers, especially in the design of the supply chain network, integrated warehouse management and information technology application,” it said.
According to MOF, the Logistics and Trade Facilitation Masterplan (2015-2020) outlined by the government is aimed at providing the strategic framework and strengthening Malaysia’s position as the preferred logistics gateway in Asia.
The master plan entailed leveraging the potential of e-commerce and adopting digitalisation to improve competitiveness and efficiency in the logistics industry and at the same time, pave the way for new, advanced and automated logistics services.
“The core aspects of digital infrastructure such as ICT networks, data infrastructure, digital platforms and devices must be reliable and compatible for logistics firms to invest in digitalisation.
“Taking fifth generation cellular network as an example, broader roll-out of the internet would provide a convenient way to send and track packages, schedule deliveries and get real time updates,” MOF added.
— BERNAMA