BrazilQ&A with James Christopher, President of Asia at TMX
James Christopher is the President of the Asia business at TMX, a business transformation consultancy specialising in digital and supply chain solutions. Speaking to Consultancy.asia, James talks about the impact of today’s fast-changing and connected environment on Asia and its supply chains, as well as how cross-border and multi-sectoral partnerships are now more crucial than ever for businesses to remain relevant and competitive.
As we can all see, there are many developments happening across the world today, including in the commerce side of things. What would you say are some of the major global developments that we have seen in the global trade and commerce scene?
Most definitely, the Covid-19 pandemic is a key global event that has had an impact on the business and trade environment today and has changed the way consumers interact and transact with businesses. On top of that, we have also seen – and are continuing to see – some notable trade agreements come into effect.
One key example is the Regional Comprehensive Economic Partnership (RCEP). This free trade agreement made up of the 10 Southeast Asian countries, Australia, New Zealand, China, Japan, and Korea is a notable development. With a free trade zone bigger than the European Union (EU) and the US-Mexico-Canada Agreement, the opportunities for trade and commerce – particularly, ecommerce – are plenty.
More recently, the EU and Southeast Asia had also concluded the world’s first bloc-to-bloc Air Transport Agreement, which allows for greater opportunities in both passenger and cargo services between and beyond both regions. The Agreement is a significant step in building greater connectivity between EU and Southeast Asia, and will also enable greater business and trade between the regions at a time when we are all moving forward from the impacts of Covid-19.
Major developments in trade and commerce are happening globally at present. What are some of the impacts of these developments to Asia and its supply chains?
All trade agreements work to strengthen prospects for trade and investment for the countries involved. This applies to Asia, where economic growth has been projected to be even stronger than expected on the back of quick Covid-19 vaccine rollouts and robust global recovery.
Additionally, Covid-19 has been a great driving force in encouraging businesses to pivot from traditional retail to ecommerce. This has resulted in a massive shift in the markets to buy and sell products and services online and cross-border. The pandemic catalysed a trend that was already taking root, with demand driven by the region’s burgeoning digitalisation and rising affluence among its growing middle-class.
This means that over the last year, supply chains in Asia have had to cater to increasingly globalised and diversified trade, greater volumes of goods, and possibly a faster pace across sectors.
Recent developments have also highlighted the need for agile supply chains that are able to respond quickly to emergencies and the rapidly changing preferences of consumers. Through this many supply chains were found to be lacking and companies had limited visibility of their entire supply chain.
This was clearly illustrated by the Ever Given incident when the huge container ship got stuck in the Suez Canal and blocked off all traffic for nearly a week. The ship effectively blocked approximately 12% of global trade as the Suez Canal saw more than 50 ships carrying more than US$9 billion worth of goods a day pass through on average in 2020. While the block has been freed, the impact is ongoing.
Lastly, amid a time of social distancing, retailers and warehouses are having to cope with a smaller in-person workforce, which may aggravate challenges and delays within our supply chains.
In your view, what are the resultant opportunities and challenges for businesses?
As the world works out a new normal, this is an opportune time for businesses to actively reassess the management of their supply chains and work to build visibility and resilience – something that we at TMX support our clients with across the region. We have worked with a variety of businesses in Asia to design and deliver advanced solutions that cover multiple channels to the end consumer. Businesses can also look to optimise their supply chains through diversification and greater visibility through digitisation solutions.
Diversification also helps to mitigate supply challenges and provide the safety net that businesses need. This ensures the goods are received by their consumers regardless of the circumstances. Meanwhile, additional digitisation gives the visibility to enable businesses to manage short term volume peaks, understand their customer better and efficiently rebalance their inventory. This helps them have the right stock on hand in the right locations.
In preparation of the upcoming free trade agreements, businesses can begin reviewing their existing processes and also look into advancing their digital transformations. This will enhance their human capital, increase productivity and efficiency and ultimately, improve their overall business competitiveness.
At the same time, businesses can also start considering entering new markets. However, it is key to note that as a continent, Asia is made up of diverse markets, each with their own set of cultures, purchasing habits, ways of working and doing business, regulatory environments, and economic development.
Entering markets in this region will require a thorough understanding of target consumers, their purchasing and consumption behaviours and preferences, as well as local competition. One size or solution does not suit all countries.
Indeed, Asia is a diverse market. As a business that have on-the-ground operations in Asia, how does TMX overcome this challenge?
In establishing a local strategy, it is crucial to build an understanding of local contexts and conventional ways of working. Having the right local partners will make a remarkable difference to the success of setting up operations in a market and gaining market share.
For a consultancy like TMX that operates in various parts of Asia, we ensure our experts are in-country and have the local understanding and knowledge. That allows us to ensure the solutions that we provide are best in class from around the world but are adapted to the local conditions.
Our recent partnership with Fukuda and Partners in Japan is an example of how we help local businesses overcome challenges. The partnership was established to empower businesses across the Asia-Pacific region as they undergo their supply chain transformations. With this partnership, we can assure our clients in Japan that they will have a fully integrated supply chain, property, and construction service with on-the-ground experts.
