ASEAN firms shift supply chains from cost to resilience

Supply chain strategies in Southeast Asia are shifting from cost efficiency to resilience and network expansion, according to an IDC study sponsored by Blue Yonder, signalling a change in priorities across ASEAN organisations.

Businesses in the region are moving away from lean models as they contend with inflation, transport strain and geopolitical uncertainty. The study found a growing focus on end-to-end execution and risk reduction, supported by better visibility across suppliers and partners.

Among ASEAN organisations surveyed, 34 per cent said they are reducing supply chain risk through supplier diversification. Another 43 per cent are prioritising better integration between systems and partners, while 29 per cent are focused on improving visibility into supply chain execution and fulfilment.

Cost pressure remains a central driver. The research found that 44 per cent of ASEAN organisations are dealing with rising supplier and transportation costs, while 38 per cent are concerned about the effect of protectionism and tariffs on supply chain stability.

From visibility

The findings suggest many companies have moved beyond the initial push for supply chain visibility and are now trying to use that information more effectively. The emphasis is shifting from simply tracking goods and disruptions to coordinating decisions across business networks.

Stephanie Krishnan, Associate Vice President at IDC Asia/Pacific and author of the study, said many organisations still face a gap between seeing events and responding to them.

"Supply chains across Asia-Pacific have largely solved the visibility problem, but many organisations still struggle to translate that visibility into action," Krishnan said.

"The competitive advantage now lies in orchestrating decisions across multiple partners and systems in real time."

The broader Asia-Pacific picture points to a similar trend. Across the region, 32 per cent of supply chain leaders said artificial intelligence and machine learning represent the most critical gap they need to address to improve resilience.

So-called agentic AI systems, which can coordinate decisions and trigger actions across supply chain networks, are likely to take on a larger role. IDC predicts their importance in supply chain operations will grow by nearly 60 per cent across Asia-Pacific over the next three years.

Regional pressures

For Southeast Asian businesses, the shift comes as manufacturers, retailers and logistics operators reassess their exposure to shocks across global trade routes and supplier bases. Diversifying suppliers and strengthening links between internal systems and external partners appear to be immediate responses.

Blue Yonder argues that visibility alone no longer meets the needs of companies operating in volatile conditions. Antonio Boccalandro, Asia-Pacific President at Blue Yonder, said businesses need to move from insight to coordinated response.

"To truly evolve, especially in turbulent times such as we are currently experiencing, organisations need to find ways to become more agile and resilient. As such, supply chains are entering a new phase where visibility alone is no longer enough. Organisations need the ability to actually translate insights into coordinated action across suppliers, logistics partners and internal operations. Platforms that combine AI, real-time data and multi-enterprise collaboration are becoming essential to help businesses respond faster to disruption while unlocking new opportunities for growth," Boccalandro said.

The report argues that this next phase will require what it describes as a unified operational backbone that brings together data, partners and execution systems. That reflects a wider industry shift towards tighter coordination across procurement, logistics and fulfilment, especially where businesses rely on multiple external suppliers and service providers.

In practice, companies are looking beyond single-system improvements and focusing more on how information moves through different parts of the supply chain. Better integration between business partners ranked highest among ASEAN priorities in the study, ahead of visibility and supplier diversification, suggesting firms see connectivity as a necessary step in responding faster to disruption.

Krishnan said the issue is no longer simply whether companies can monitor supply chain events, but whether they can coordinate a response across the wider network.

"Modern supply chains must evolve from monitoring events to orchestrating responses," Krishnan said.

"The organisations that succeed will be those that can translate insights into coordinated action across their entire supply ecosystem."