Despite being a small country, Singapore has established itself as one of the world’s top logistics hubs, ranking second in Asia and seventh globally on the World Bank’s Logistics Hub Index. Coupled with the latest boom in regional cross-border trade and consumption over recent years, Singapore has continued to further strengthen the country’s position as a highly efficient logistics and supply chain management hub.
However, it’s important that Singapore continues to remain competitive on a global scale. With various global factors impacting the logistics industry — including geopolitical tensions and rising energy prices — supply chain management has never been more critical, and the need for companies to redefine and optimise supply chains is crucial to ensuring continued business growth and success.
Efficient supply chains are at the core of an effective logistics infrastructure, and digital technologies are critical for not only improving existing supply chains but also in making them more resilient. Today, technologies such as AI and analytics are playing a huge role in improving supply chain visibility and in better aligning operations to adapt to new and often unpredictable business realities.
As governments and commercial enterprises across the globe consider how to take supply chain efficiency to the next level, the advent of the metaverse could play a central role. In simple terms, the metaverse is a shared virtual environment that people access via the internet and engage in as an immersive experience.
Industry analyst and investor Matthew Ball, in his book, “The Metaverse: And How it Will Revolutionize Everything”, offers a more comprehensive definition: “A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”
Whatever the definition, the key to whether the metaverse will become part of the digital fabric of how organisations will be run in the future depends on finding viable use cases and ensuring that the technology required to experience the metaverse is easily accessible from a cost point of view. Retailers are already exploring how the metaverse can be used to enhance the customer experience. Whether it’s an avatar popping into a metaverse clothing shop and buying items to be sent to you in the real world, or understanding the preferences of a digital avatar to tailor services and strengthen brand loyalty, concepts are starting to take shape. But will the metaverse catch on in other sectors including in the supply chain?
Drivers for broader metaverse development
Beyond viable use cases, most metaverse watchers and experts point to the cloud as a primary driver for the development of the metaverse, which checks out with Ball’s definition above in that the metaverse must be “updated synchronously” and operate in real time.
The pandemic certainly served as a catalyst in this respect, as organisations across the globe accelerated their digital transformation initiatives and migrated IT environments to the cloud. It also presented an opportunity for organisations to explore new digital technologies. As a result, metaverse environments have started to be built outside the retail sector.
The ability of manufacturers to replicate a smart factory within the metaverse, in which assembly robots and production lines are recreated in a 3D virtual world, allows companies to visualise their production operations in an entirely new way. Viewing 3D models of production lines is not a new concept per se, but the metaverse allows companies to potentially connect their virtual production line to an entire virtual supply chain.
And seeking visibility beyond the four walls of the enterprise became an even more important strategic goal for organisations as supply chain disruption became a business constant during the pandemic. Business leaders have consequently been clamouring for new technologies to help improve visibility across their supply chains. What an immersive environment could bring to supply chains is a powerful use case for digital twins of not just objects and facilities, but an entire ecosystem of connected suppliers.
In fact, a future in which every member of a supply chain is required to have a digital twin of their facility, machinery, parts, finished product and goods in transit, via IoT sensor data, could bring a level of transparency and quality control to supply chains that have been previously impossible to achieve. Digital twins and metaverse immersion could enable significant improvements in everything from warehouse design, process modelling, and goods flows to order management, invoicing, and payment. Digital twins will also likely enable supply chain modelling – which will improve operational efficiency – to be done in the immersive environment.
The critical role of supply chain integration solutions
Cloud-based supply chain integration solutions already allow companies to digitise their supply chain operations and collaborate with trading partners, leveraging multiple technologies including EDI-based communications, which have been around for decades. EDI remains in the DNA of nearly every supply chain operation across the globe, digitising the paper-based information flows associated with the movement of goods across physical supply chains.
Helping companies digitise their supply chain operations and integrating with backend systems including ERP, TMS, and WMS, supply chain integration solutions essentially provide the digital backbone that connects entire business ecosystems. If you take this digital backbone and represent it within the metaverse, you could not only build a digital twin of your physical supply chain, but also deliver new benefits under many other scenarios:
- What if your supply chain gets impacted by a monsoon in Southeast Asia and you want to see how your suppliers in the region might be impacted and consequently how logistics flows could be disrupted? This could potentially be modelled in the metaverse to allow you to see the downstream effect of the monsoon on your business operations.
- What if every carton, pallet, and shipping container moving across your supply chain was modelled in the metaverse and you wanted to track the progress of the shipments in real time but within the confines of the metaverse?
- What if you could run ‘what if’ scenarios across your digital supply chain twin? For example, you may start a new project which requires adding ten new suppliers in APAC, the metaverse could be used to model and simulate the new APAC supplier shipment flows and how they impact your logistics and inventory management systems.
As Singapore continues to develop its logistic industry to remain the top hub in the world, technologies like cloud and AI will become foundational elements to creating the super-efficient logistics and supply chain infrastructures of the future. However, there is certainly a place for the metaverse in terms of visualising, simulating, and managing tomorrow’s supply chains. Like all technologies, the metaverse will take time to gain acceptance, but when large companies start embracing it, the metaverse could become a game changer for how we view supply chains.