October 2023

SGV thought leadership on pressing issues faced by chief executives in today’s economic landscape. Articles are published every Monday in the Economy section of the BusinessWorld newspaper.
30 October 2023 Fabian K. Delos Santos

Tax conversations with C-Suites

In a world that has to address the risks posed by climate change, social inequity, financial instability and other disruptions, companies are becoming increasingly conscious about the importance of corporate responsibility, with a particular focus on the sustainability agenda. Companies have recognized the need to take urgent social and environmental action and have started laying down a long-term sustainability strategy interwoven with building long-term value.Investors are now looking at the sustainability policies of target companies when deciding where to invest. Regulators have become more critical, intending to encourage businesses to genuinely green their operations. Consumers are beginning to consider the sustainability-related activities of companies when flexing their purchasing power, actively choosing more sustainable options despite higher price points.Sustainability is defined as the balance between the economy, environment, and equity and is usually referred to as the ability to maintain or support a process continuously over time. The UN World Commission on Environment and Development defines sustainable development as progress that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” In today’s business world and in the process of being sustainable, companies ought to make use of scarce resources responsibly.This is why sustainability, and how a sustainable and effective tax ecosystem can advance it, was a key focus for the recently held 2nd SGV Tax Symposium. We see that Tax and Sustainability are critically connected in achieving our Tax Vision, where we foster transparency, inclusivity, and responsible tax practices, working with the regulators to create a level playing field that benefits businesses, individuals, and our communities.With a strong and efficient tax system, governments and regulators have the resources to promote incentives, policies and regulations that strengthen the country’s sustainability programs. In turn, when the country moves along a more sustainable and efficient socio-economic path, it creates more opportunity for increased tax revenue and compliance from responsible private and corporate citizens.We can already see this in some jurisdictions where governments are encouraging citizens and businesses to make the necessary changes in lifestyle, manufacturing, packaging, and purchasing decisions that help meet sustainability targets. At the same time, governments have been leveraging indirect tax policies to help achieve sustainability targets. It is not uncommon for governments to use both the policy stick (i.e., carbon levies, plastic packaging, excise taxes, waste management fees) — and carrot (i.e., incentives) for sustainable development.During the Conversation with C-Suites panel at the 2nd SGV Tax Symposium, executives from the real estate, investment management, and mining sectors emphasized how their respective industries promote sustainability.Robinsons Land Corp. (RLC) Chief Financial, Risk, and Compliance Officer, Kerwin Tan, discussed how the real estate business spearheads sustainable solutions in its operations. In RLC, this includes integrating solar and other renewable energy across all Robinsons malls, transitioning to LED lights, revolutionizing workspaces, and embracing digital transformation by developing mobile applications and portals that will provide easy access to Robinsons’ products and services. Their stakeholders, which include customers, tenants, and employees, are at the forefront of providing these strategic, sustainable solutions. To measure the positive impact of these projects, RLC has a data management system that allows it to effectively record the changes in its energy consumption.Meanwhile, President and Chief Executive Officer of Global Ferronickel Holdings, Inc. Dante Bravo said that the mining sector, on a macro level, is currently focused on sustainability. Mr. Bravo said Global Ferronickel has embedded environmental management solutions in its mining operations, from the clearing of vegetation, stripping of topsoil, mining, truck loading and hauling, and stockpiling, among others. He added that the company continues to adhere to global environmental standards (e.g., ISO certifications) and continues to develop and support host and neighboring communities with health assistance, educational and livelihood programs, and employee welfare, among others.While the panelists appreciate and recognize the current actions of the government in promoting sustainability, they also felt that more can be done to promote sustainability goals in various sections of the economy. The panelists agreed that the government should consider granting even more incentives, in addition to the current benefits already granted by current law, to encourage more businesses to invest in sustainable projects. It was further emphasized that this initiative should be viewed as a long-term investment that will make the country more competitive, attracting more investment, which in turn will translate to revenue via compliance and payment of taxes.The sustainability journey itself may be challenging, but the required results must be delivered sooner rather than later. Many have taken the first steps to design tax frameworks and risk management methodologies to accelerate the transition. Organizations should adjust their strategies, stay abreast of policy uncertainty, and ensure that they drive corporate sustainability to create long-term value. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co. or EY.Fabian K. Delos Santos is the head of Tax of SGV & Co.

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23 October 2023 Joseph Ian M. Canlas

Accelerating sustainability with green IT

Digital technology is crucial to achieving important goals that include fulfilling compliance requirements, meeting the reporting needs of stakeholders, and implementing operational changes within an organization to meet environmental, social, and governance (ESG) and sustainability targets.The global push to achieve the 2050 net-zero target has resulted in an increased awareness of the role of IT in accelerating sustainability. According to the EY Reimagining Industry Futures Study 2023, which was based on an online survey of 5G perceptions among 1,325 enterprises worldwide, 54% of businesses believe that emerging technologies can play a vital role in this effort.The Exponential Roadmap 1.5.1, developed by the Exponential Roadmap Initiative, an accredited partner of the United Nations’ Race to Zero campaign, outlines a path to reach net zero emissions from businesses by 2030 through natural climate solutions. The information and communications technology (ICT) sector has the potential to reduce global carbon emissions by 15% and 35% directly and indirectly by 2030.While the use of digital technology is crucial for sustainability, it is equally important to prevent it from becoming a major contributor to global emissions. The adoption of new technologies could lead to increased energy consumption, hindering progress towards emission reduction targets.THE NEED FOR GREEN ITGreen IT refers to IT products and services that help organizations reduce their environmental impact, such as the issue of IT energy consumption. For example, the International Energy Agency says that data centers and data transmission networks were responsible for nearly 1% of energy-related GHG emissions in 2020. Green software, which incorporates low-carbon principles in software development and utilization, is also an important green IT practice. While the software itself does not emit carbon, it influences energy consumption.E-waste already poses environmental risks due to hazardous substances that include mercury, lead, and cadmium, which are capable of contaminating air, water, and soil. E-waste disposal adds to the ICT sector’s greenhouse gas emissions. In 2019, there were 53.6 million tons of e-waste, which could rise to 74.7 million tons by 2030, according to Statista. In addition, the mining and extraction of these materials further contribute to soil erosion and deforestation, emphasizing the need for effective material reuse and waste processing.The ICT sector can innovate green IT and maintain a net positive impact by implementing sustainable practices throughout its value chain, covering energy efficiency and sustainable supply chains.Furthermore, organizations can drive the positive impact of green IT and software by fostering an ecosystem of collaboration among stakeholders in the value chain, involving the following key players in the mix: technology providers, technology buyers, governments and other regulatory authorities.TECHNOLOGY PROVIDERSTechnology companies, ranging from global leaders to startups, are actively increasing their focus on green IT innovation and offerings to meet the growing demand and expectations in the market. As they do so, they have the responsibility to manage and disclose their carbon footprints to comply with regulatory requirements and standards, encompassing scope 1 to scope 3 emissions that result from the production and use of their technologies.Industry groups consisting of technology providers are in a favorable position to establish standards and best practices within the sector, like prioritizing energy-efficient hardware, e-waste management, and the sustainable procurement of IT equipment. Additionally, they can proactively collaborate with governments to develop policies that promote the adoption of green IT.In the Philippines, a related law is the Renewable Energy Act of 2008, which encourages the adoption of energy-efficient technologies across various sectors. There is a need for more local green-IT-specific laws or policies. Accordingly, the country would benefit from formal studies identifying green IT-related gaps and opportunities. Technology providers can incorporate green IT principles into their product and service designs to reshape the future of the IT landscape, positively impacting society and the environment.TECHNOLOGY BUYERSAs sustainability becomes a central part of an organization’s core strategies, companies are actively seeking suitable technologies, digital platforms, and applications to support their sustainability and ESG goals. While their main focus is on selecting technologies that meet sustainability requirements and tackle sustainability challenges, it is crucial for them to also consider the potential environmental impact of implementing these technologies on a larger scale.Forward-thinking and innovative companies that prioritize sustainability in their business strategies include green IT implementation in their roadmap for sustainability transformation. They must integrate green IT principles into a robust and sustainable sourcing and procurement framework while carefully choosing technology providers from the request for proposal process onwards. They may even take the extra step of adopting an internal carbon pricing mechanism to ensure that strategic decisions align with their climate ambitions. By generating market demand for green IT, these companies can drive innovation in future green IT landscapes.GOVERNMENTS AND OTHER REGULATORY AUTHORITIESGovernment and regulatory authorities also play a crucial role in driving the adoption of green IT to accelerate the transition to a sustainable future, keeping in mind the following priorities:• Provide detailed action plans with clear accountability.• Improve the design and implementation of green initiatives.• Incentivize the market and implement mandatory changes.• Increase funding to promote innovation.• Serve as a role model for other sectors of the economy.• Promote a people-centered approach involving the whole of society.Governments that have mature regulations and standards for sustainability can take the lead in implementing strategies within their organizations and departments. For instance, the United Nations, through its specialized agency, the International Telecommunication Union (ITU), establishes standards, guidance, and criteria for ICT organizations on setting net zero targets and strategies.THE SIGNIFICANCE OF GREEN ITThe adoption of green IT and software by both organizations and societies will have a significant bearing on global sustainability ambitions. By nurturing a collaborative system of stakeholders within the value chain, organizations can benefit greatly from green IT and software. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Joseph Ian M. Canlas is a consulting partner and part of the Climate Change and Sustainability Services team of SGV & Co.

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16 October 2023 Lester Jeff D. Pawid and Mary Andrea T. Bacani

How RCEP impacts ASEAN supply chains

The Regional Comprehensive Economic Partnership (RCEP) came into force for the Philippines in June. The RCEP is a trading bloc comprising the members of the Association of Southeast Asian Nations (ASEAN) and ASEAN Plus One Free Trade Agreement (FTA) partners Japan, China, South Korea, Australia, and New Zealand. According to the RCEP text, one of the agreement’s objectives is to “establish a modern, comprehensive, high-quality, and mutually beneficial economic partnership framework to facilitate the expansion of regional trade and investment and contribute to global economic growth and development…”This is the fourth article in a supply chain series that looks at reimagining the integrated supply chain. This article will discuss how the RCEP may impact supply chains in the ASEAN.RCEP’S VALUERCEP builds on and updates the existing ASEAN Plus One FTAs and considers important trade realities, such as competition and the interdependency of value chains. It covers areas not previously included in the individual ASEAN Plus One FTAs, such as intellectual property, e-commerce, competition, small- and medium-sized enterprises (SMEs), and government procurement.RCEP also recognizes the diversity of its members in terms of development level and provides technical cooperation and capacity building to support the implementation of the Agreement, with the intent to make it more beneficial for all entities involved. In addition, RCEP is seen as a high-quality agreement as it eases market access through trade and investment rules and supports global and regional supply chains.RCEP AND SUPPLY CHAINSRCEP has the potential to support and ease regional and global value chains. The updated trade deal further lowered tariff rates or accelerated the reduction thereof. Furthermore, it commits the members to a single set of Rules of Origin (ROO), the criteria to determine the national source of a product. ROOs determine whether products are eligible for preferential treatment under trade agreements, much like a passport indicates the nationality of a visitor and, therefore, whether the holder is eligible to enter a country visa-free by treaty rules.A significant provision is cumulation, which allows an RCEP firm to count inputs or goods from other RCEP partners as local content to meet ROO requirements. The regional value content (RVC) is closely related to ROOs because it helps determine the minimum percentage of regional value a product must have to qualify for preferential trade treatment. For example, if the RVC is set at 40% of the free-on-board price, an RCEP firm can include inputs from other RCEP partners to fulfill this requirement. Meeting the requirement allows the firm to enjoy preferential tariff rates when exporting to other RCEP countries. Otherwise, higher most-favored-nation (MFN) rates will apply.BUSINESS OPPORTUNITIESAccording to figures from the Philippine Statistics Authority, the Philippines sources about 70% of its imports from and ships half of its exports to the rest of the RCEP membership. This suggests that the new trading bloc is both a source of materials and a market for produce at the same time.Accounting for nearly a third of the global population and output, the new trading bloc is now the largest in the world. Furthermore, RCEP is also the first FTA that jointly covers China, Japan, and South Korea. For firms along regional supply chains, savings come in the form of zero or substantially lower tariff rates when importing inputs from and exporting produce to the RCEP.Firms intending to benefit from RCEP’s preferential tariff rates should consult issuances of various national customs bodies. Some ancillary documents may be required, covering direct consignment, third-country invoicing, and back-to-back certificates of origin. Firms should consider the administrative costs of compliance and compare them with the incremental benefits arising from the difference between MFN and preferential rates.RCEP IN THE PHILIPPINESOverall, RCEP could have developmental implications for the Philippines. When large exporting firms partner with SMEs at the enterprise level, the latter are also effectively participating in and benefiting from regional supply chains.At the macroeconomic level, RCEP can help stimulate growth. RCEP’s effectivity coincides with significant structural reforms like the Corporate Recovery and Tax Incentives for Enterprises, which lowered the corporate income tax rate, and the amendments to the Public Service Act, Foreign Investment Act, and Retail Trade Liberalization Act, which further liberalized the economy. The government is also pursuing an infrastructure program that amounts to 5-6% of GDP. These bode well for investment-led growth.Continuous infrastructure investment and development can strengthen the Philippine link to regional and global supply chains. In the 2023 edition of the World Bank’s Logistics Performance Index, the Philippines scored 3.3 out of 5, up from 2.9 in 2018. This improvement may be attributed to the increase in the infrastructure score from 2.73 in 2018 to 3.2 in 2023.Altogether, structural reforms, infrastructure programs, and improved regional market access provided by RCEP can help the country bid for more export-driven growth. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.Lester Jeff D. Pawid is a Strategy and Transactions (SaT) Senior Manager and Mary Andrea T. Bacani is a Supply Chain and Operations (SCO) Senior Manager of SGV & Co.

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09 October 2023 Benjamin N. Villacorte and Mary Andrea T. Bacani

How green supply chains create long-term value

Historically, sustainability was a “nice-to-have” item for executive boards. However, in recent years, environmental, social, and governance (ESG) considerations have gained considerable momentum. ESG is now far from being mere boxes to check for compliance purposes, with topics like sustainability becoming ever prominent and essential agenda items in boardroom discussions.A focus on ESG is imperative for organizations as it enables them to effectively manage risk, meet stakeholder expectations, drive cost savings and efficiency, and gain a competitive advantage. By integrating ESG practices into their supply chains, business leaders can navigate risk and disruption, future-proof their organizations, and create a positive impact on the environment.Most of a company’s carbon emissions commonly stem from its supply chain, primarily through manufacturing and logistics operations. As a result, this crucial aspect of business faces mounting pressure to meet progressively ambitious sustainability goals.This is the third article in a supply chain series that previously looked at reimagining the integrated supply chain. This article will discuss how green supply chains can help create long-term value.ESG AND GREEN SUPPLY CHAINSGreen supply chains refer to the implementation of sustainable and environmentally responsible practices throughout the supply chain process. The process involves integrating eco-friendly initiatives into various stages — including sourcing raw materials, manufacturing, packaging, and distribution. “Green” here pertains to the environmental considerations of the supply chain, and “sustainable” covers the social and economic perspective of the business.ESG and green concepts in the product design up to end-of-life management should also be incorporated to enhance environmental sustainability. By integrating ESG principles, companies prioritize environmental impact, social responsibility, and strong governance throughout their operations.ESG and green supply chains are closely related, with ESG considerations forming the base of developing and implementing sustainable practices within supply chain operations. Although a green supply chain addresses only the environmental side of ESG, a sustainable supply chain encompasses the environmental, social, and governance principles of ESG. Green supply chains embody the practical implementation of ESG principles by reducing carbon emissions, minimizing waste, and adopting sustainable technologies and practices.A key part of ESG performance is to commit and take action toward a sustainable supply chain. This starts with ensuring interconnectedness and transparency in the whole of operations as well as collaboration with suppliers in adhering to green and ethical standards. Greening the supply chain brings value not just by reducing environmental pollution and waste but also by enhancing operational performance through improved production costs and asset utilization. This also builds positive brand awareness and reputation as consumer behavior shows a preference for companies or products that value their impact on the environment and society.The relationship between ESG and green supply chains is symbiotic. ESG provides the framework and guiding principles, and green supply chains concretize those principles within the supply chain to drive sustainable and responsible outcomes.SUSTAINABILITY POLICIESSince the Philippine SEC mandated sustainability reporting, companies that identify supply chains as one of their material topics are required to disclose their ESG initiatives in compliance with their reporting framework/standards used. This promotes transparency and accountability, empowering employees, customers, suppliers, investors, business partners, local communities, legislators, regulators, policymakers, and other stakeholders to make informed decisions as well as contribute to the management of companies’ economic, environmental and social impacts.In addition, Republic Act No. 11898, also known as the Extended Producer Responsibility (EPR) Act of 2022, requires obliged enterprises to establish their own EPR programs. Obliged enterprises have been given the responsibility of managing their products throughout their lifecycles, starting with plastic packaging covered in the Act, with a potential expansion of coverage in the future. The EPR Act was covered more extensively in a previous C-Suites article titled “Understanding the implications of the EPR Law.”The Philippines also has the Green Jobs Act of 2016, which promotes the creation of “green jobs” or employment that contributes to environmental preservation. Under RR No. 05-2019, businesses that offer green jobs are granted an additional deduction equal to 50% of the total expenses for skills training and research development. Moreover, the law provides that capital equipment that is directly and exclusively used in the promotion of green jobs may be imported free of taxes.Treating ESG as secondary can deter organizations from meeting their strategic objectives, including the potential loss of business opportunities and investment capital. Companies can improve their operational processes and drive cost reductions by enhancing environmental sustainability and overall ESG performance across the supply chain.KEY ESG INITIATIVESCreating a green supply chain is a manifold process. First, assessing the materiality of sustainability issues at the outset is essential, focusing on the most pressing concerns. This systemic approach allows for a targeted way to address these issues. Second, organizations should establish their strategic objectives — aligning resources, structures, and processes to sustainability imperatives identified in the initial assessment.Leadership buy-in and board oversight are crucial for consistent direction and support throughout the business. Management and suppliers should receive training in market practices, expanding sustainability goals beyond direct operations to encompass all levels of the supply chain.Deploying technology can enhance accountability and transparency, allowing for better monitoring and reporting. Moreover, leveraging buying power and influence can facilitate supply chain sustainability.Finally, organizations should consider disclosing supply chain information beyond siloed sustainability reporting mechanisms, promoting transparency, and encouraging industry-wide progress.THE FUTURE OF SUSTAINABLE SUPPLY CHAINSGreen supply chains have emerged as a critical driver of long-term value for organizations. Companies can reap a snowball effect of benefits by prioritizing sustainability and integrating environmentally responsible practices and technologies into their supply chain operations. Internal ethical leadership and support, as well as considerations of different external drivers such as customers, suppliers, and social and regulatory requirements are vital factors in integrating sustainability in an end-to-end supply chain.Not only do green supply chains help address disruption, mitigate risk, and enhance reputation, but they also drive operational efficiency, cost savings, and access to capital. Integrating a social and economic perspective to transition to a sustainable supply chain also contributes significantly to the competitiveness, long-term profitability, innovation, differentiation, and societal impact of companies.By taking this holistic approach to sustainable supply chains, organizations can pave the way toward a greener, more resilient future.The next article in this series will discuss how the Regional Comprehensive Economic Partnership (RCEP) may impact supply chains in ASEAN. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.Benjamin N. Villacorte is a climate change and sustainability services partner and Mary Andrea T. Bacani is a Supply Chain and Operations (SCO) senior manager of SGV & Co.

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02 October 2023 Jan Ray G. Manlapaz and Mary Andrea T. Bacani

Reimagining the digital supply chain

In recent years, there has been a substantial change in the global landscape of supply chains. Companies are dealing with a wide range of challenges that are changing the way they see supply chain strategy, from geopolitical conflicts to digital disruptions and pressures from climate change and the sustainability agenda. A new paradigm reimagining supply chains is emerging in reaction to these disruptions, forcing businesses to reconsider their existing strategies and adopt a comprehensive approach to capitalize upon new opportunities while ensuring resilience.Because of this, traditional and analog supply chain strategies may no longer be capable of effectively responding to supply chain shocks. Instead, an agile, digital supply chain consisting of intelligent monitoring, real-time data visibility and management, and crisis and exception management frameworks, among other things, can be a massive game-changer. However, there are no shortcuts to the digital transformation of the supply chain, as merely adding technology to existing supply chain management systems and processes for the sake of supply chain digitalization will not deliver the real value that businesses desire.This is the second article in a supply chain series that previously looked at integrated supply chain planning.SUPPLY CHAIN CHALLENGESAccording to an EY report, exponential data growth is another fundamental problem that continues to overwhelm most businesses at an accelerated pace. Companies that can effectively navigate the increasing complexity of new digital business models will be able to maintain a competitive advantage, but companies that are unable to do so will inhibit their ability to derive meaningful insights, leading to a barrier to achieving automation and efficiency.The disruption brought about by digital technology has significantly reshaped supply chains, accelerating supply chain digitalization. According to the Evolution to Revolution: MHI Annual Industry Report, 78% of supply chain executives in the study acknowledge the revolutionary value of digital technologies. The whole supply chain will benefit from the new opportunities for efficiency improvements as well as improved decision-making brought forth by this shift toward digitalization.Digital supply chain reimagination has also become defined by the mounting demand to improve resiliency, combat climate change, and promote sustainability. Consumers are more aware of how products affect the environment, with 75% of US consumers voicing worries in this area, according to an article titled “Majority of US Consumers Say They Will Pay More for Sustainable Products” by Sustainable Brands, a community of brand innovators shaping the future of commerce. In order to meet these changing customer expectations, businesses are adopting supply chain redesign driven by sustainability.THE FOUR PILLARS OF SUPPLY CHAIN REIMAGINATIONIn order to navigate these complexities and seize opportunities, companies have to embrace a comprehensive approach to supply chain reimagination, utilizing a framework that revolves around the following four key pillars.Supply chain sustainability and resiliency. This pillar emphasizes tech-led process excellence to build resilient supply chains through enhanced visibility and improved agility. To guarantee continuous operations and satisfy customer demands, integrated business planning, manufacturing reliability, and secure alternative bill of materials (BoMs) and sources of supply all play critical roles.End-to-end (E2E) cost optimization. For a company to stay competitive, better cost management along the entire supply chain is essential. Among the key levers necessary to achieve long-term cost reductions and operational efficiency are strategic sourcing, the elimination of manufacturing waste, and maximizing logistics expenditures. Adopting a centralized operating model for supply chain through Global Business Services (GBS) or Shared Services Center (SSC) solutions can also create significant cost savings.Supply chain process digitalization. The digitalization of supply chains opens up new opportunities for agility and efficiency. Real-time decision-making and enhanced collaboration are made possible by autonomous planning, digital factories, and procurement analytics. E2E visibility and quality management through the use of the Control Tower system also allow seamless integration between functions, enhancing the effectiveness and response of the supply chain as a whole. Leveraging a Digital Twin (a virtual model of the physical supply chain that includes a digital counterpart of every piece of the process) enables companies to run a parallel version of the supply network and simulate scenarios for better insights before making transformative changes.Strategic interventions. This final pillar includes supply chain redesign driven by sustainability, carbon footprint optimization, and segmentation and portfolio optimization. Companies can future-proof their operations and align their supply chains with shifting market dynamics by carefully reevaluating their operations and implementing asset-light solutions.Companies may significantly affect their profit and loss statements by concentrating on these four supply chain reimagination areas.UNLOCKING BENEFITS FOR BUSINESSESAccording to an assessment of prior supply chain engagements conducted by EY, adopting a supply chain reimagination framework has had a substantial positive impact on customers in four areas.First, implementing strong resilience measures can result in gains in total revenue of 3% to 5%, a forecasting accuracy of 5%, supplier lead times of 50% to 60%, and overall equipment efficiency (OEE) of 15% to 30%.Second, through route optimization and freight rate benchmarking, focusing on cost optimization can result in reductions of 4% to 6% in direct material costs, 5% to 10% in manufacturing expenses, and 6% to 10% in transportation costs.Third, embracing digital transformation in the supply chain can lower production costs by 5% to 10%, inventory carrying costs by 10% to 15%, and warehouse and distribution center operating expenses by 6% to 10%.Last, through network redesign, strategic interventions can reduce transportation costs by 10% to 25% and increase on-time-in-full (OTIF) performance so that it reaches 95% or higher.REIMAGINING THE FUTURE OF SUPPLY CHAIN MANAGEMENTThe supply chain landscape is rapidly changing as a result of a convergence of major disruptions and the demand for sustainability and resilience. However, businesses that use the framework for supply chain reimagination can elevate themselves to a leading position during this change. Enhancing digitalization, building robust supply chains, controlling costs, and aligning operations with shifting market dynamics are all possible for firms that take a comprehensive approach and make full use of technology, process excellence, and strategic interventions.Reimagining the digital supply chain is no longer a choice — it is imperative for businesses seeking long-term success as the business climate continues to evolve. Organizations may maximize the potential of their supply chains and succeed in a complex and dynamic world by reevaluating their strategies and embracing these four pillars, charting a path to increased resilience, sustainability, and autonomous supply networks.The next article in this series will discuss why green supply chains are the key to long-term value. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.Jan Ray G. Manlapaz is a consulting partner and Mary Andrea T. Bacani is a Supply Chain and Operations (SCO) senior manager of SGV & Co.

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