Role of technology in boosting MSME’s ability to handle supply chain volatilities

Role of technology in boosting MSME’s ability to handle supply chain volatilities

By providing employment to 130 million people in India, the MSME sector contributes to 33% of India’s GDP today. As the Annual Report of the MSME Ministry, a total number of 5,36,677 enterprises were registered under the manufacturing category while 8,65,058 were registered under the service sector with food, textile, apparel, fabricated metal, and machinery & equipment making the top five categories which have witnessed an increase in registration. The decision to automate and digitalize businesses has been very challenging for MSMEs as it has kept them on their toes in the run of technological advancements.

Supply chain is one of the major functions which is essential for any organization’s success. The supply chain is the epicenter that covers all phases which are involved in placing a product in the ambit of the consumers right from acquiring raw materials, manufacturing, and distributing to warehousing and shipping the finished products.

With global sectoral digitalization especially post-pandemic, software related to Logistics, inventory management, and supply chain management has quickly found its way and made an integral place in the sector. One cannot think of Supply chain management without SCM Software today. An Outlook Survey done by KPMG at the start of 2022, mentions that nearly 65% of Indian CEOs feel the need to reinvent their supply chain systems. Evaluating the process of the role of data helps assess how sustainable and profitable the business is.

RFID and barcode technology are now being used extensively for inventory management, tracking, vehicle route tracking, and logistics. These technologies have enabled better transparency and helped businesses with advancements in the field of automation. Warehouse bots and drone delivery are among the most promising modern tech trends in supply chain automation, which play a pivotal role in ensuring customer satisfaction, resource optimization, waste elimination, and building up a sustainable business amidst the fast-changing global supply chains.

Cloud technologies have given MSMEs the ability to process big data, which has further helped them understand customers’ pain points as well as their preferences. Through cloud solutions, MSMEs would be able to formulate correct KPIs and develop a digital transformation strategy aimed at customer convenience. This highlights the critical roles that intelligent automation solutions can play in enabling MSMEs to withstand the supply chain volatilities and address the concerns of the stakeholders. The major portion which MSMEs need to look at is to increase real-time visibility of overall supply chain operations. Access to real-time data relevant to production, transportation, and consumption helps in gaining insights into how resources are being utilized. By only understanding and harnessing the digital technologies, the MSMEs would be able to understand the customer preferences.

Another significant contribution that technology has made to the supply chain is building visibility. The smallest error of discrepancy in the supply chain network can convert into confusion at every level. To prevent this AL, intelligent tools are the most appreciated and widely accepted. These give access to the vendors to understand consumption patterns and depending upon the same, the entire supply chain can be altered to modify its supply materials to the manufacturer. It not only removes the hassle of inaccurate forecasts and delays in purchase orders but also removes waste from the entire supply chain. One of the major volatilities of the supply chain is road accidents. It is the biggest concern for which AI is the best solution as there are AI-enabled driver-facing camera systems that are capable of generating an alert in case of driver drowsiness or fatigue. AI is tracking it effectively by real-time analyzing the driver’s facial expressions.

With continuous ongoing government support and technological advancements, MSMEs will surely handle the volatilities and ensure resilience in the post-pandemic world.

(The writer is Founder and Managing Director ValueScale Technologies)

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