Supply Chain Challenges Faced By Indian SMEs

by Oxyzo Financing Smart Financing

Companies of all sizes have enormous prospects for growth in today's international economy. Small and medium companies (SMEs) in developing economies, on the other hand, have found it difficult to compete in this global market due to a variety of resource constraints. Supply chain management (SCM) can be a crucial determinant of Indian SMEs' success in the global economy. When it comes to establishing effective SCM, SMEs encounter numerous operational obstacles.

Importance of SCM

According to study findings(Singh, Rajesh & Kumar, Ravinder. (2020) Strategic issues in supply chain management of Indian SMEs due to globalization: an empirical study Benchmarking: An International Journal. ahead-of-print. 10.1108/BIJ-09-2019-0429). The top three barriers to SCM implementation in Indian SMEs are a lack of senior management commitment, a lack of resources and money, and a weak demand forecasting system. As a result, businesses should place a greater emphasis on addressing these roadblocks by taking a proactive approach.

The study looked at many strategic concerns in Indian SMEs, such as motivation, investment priorities, and potential barriers to effective SCM. The following are some of the study's findings:

  • The primary driving drivers for successful SCM of Indian SMEs in a worldwide market are minimizing delivery lead time, lowering product costs, and lowering inventory costs.

  • The key investment priorities for SCM adoption in SMEs are quality improvement, quick responsiveness to client demands, and precise sales forecasting and budgeting.

  • The main impediments to SMEs implementing efficient SCM include a lack of top management commitment, a lack of resources and cash, and a weak demand forecasting system.

  • The key SCM practices used by Indian SMEs include CRM, ERP, and integrated inventory management.

  • The level of motivation and investment in various sectors has a considerable positive link with SCM investment.

  • Integrated inventory control, vendor managed inventory, lead time wisely, customer relationship management, and barcode/RFID management are all examples of SCM methods.

  • RFID/other automatic identification methods, exchanging point-of-sale data with partners, third-party logistics, bullwhip impact study, and logistics design all play a role.

What can SMEs do for a better supplier chain? 

Indian SMEs should prioritize dealing with roadblocks, SCM practices, and the adoption of emerging technology in a strategic manner. Human resource planning, knowledge management, and the implementation of sophisticated technology have all been found to be undervalued by Indian SMEs. Managers of Indian SMEs are concerned about this. As a result, SMEs should concentrate on managing their knowledge and applying emerging technologies such as the Internet of Things, cloud services, big data analytics, and so on in the internet age of industry 4.0. Aside from that, SMEs should use these technologies to try to fulfill the circular economy's goal of competing in global marketplaces. 

For this purpose, OfBusiness is the right choice for SMEs as it is a tech-enabled platform that procurement of raw materials and incorporates technology into SME purchasing behavior. It also provides SMEs with a number of tech services. It makes available products at a better price to clients with both online and offline support. 

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Joined APSense since, September 2nd, 2021, From Gurgoan, India.

Created on Feb 10th 2022 07:08. Viewed 225 times.


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