5 logistical strategies for MSME exporters to win big amid supply chain crisis | The Financial Express

5 logistical strategies for MSME exporters to win big amid supply chain crisis

Trade, import and export for MSMEs: As the global markets opened a few months back, the trade dynamics and Export-Import (EXIM) gimmicks have changed considerably, and MSMEs will have to catch pace with these changing times.

5 logistical strategies for MSME exporters to win big amid supply chain crisis
Blockchain, IoT, and other new technologies and tools must be tested and adopted quickly, allowing enterprises to establish a future supply chain. 

By Sanjay Bhatia

Trade, import and export for MSMEs: With over 63 million operational units and 30 per cent of the total GDP, MSMEs have emerged as one of the most significant drivers of the Indian economy over the years. MSMEs currently employ over 11 crore people, making them the second largest employment generator after agriculture. As the pandemic hit the world in early 2020, this sector was one of the worst hits, rendering it to bankruptcy and the closure of many units. However, with government assistance and some course correction, this crippled industry has begun to recover, demonstrating its strong position in the Indian market. 

As the global markets opened a few months back, the trade dynamics and Export-Import (EXIM) gimmicks have changed considerably, and MSMEs will have to catch pace with these changing times. Let us look at a few supply chain strategies that, if implemented, would help MSMEs emerge as leaders, driving the Indian EXIM industry. 

Automating processes with an integrated platform 

Business operations have undeniably been transformed by technology. The pandemic has boosted the adoption and growth of technology even more. According to a Google-KPMG study, SMEs with digital capabilities are expected to grow their revenue at a rate that is roughly twice as fast as offline SMEs. MSMEs must invest resources in the automation of robotic processes, Artificial Intelligence (AI), and Machine Learning (ML). Similar technologies can be used to unify a system that can incorporate various single functions involving production, marketing, operation, and logistics into one dashboard, guaranteeing the unification of other components and real-time seamless data flow. 

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Analysing, forecasting and optimising 

Analysing consumer data and predicting demand accurately helps in better inventory management. It leads to better planning for managing raw materials and finished products, as well as helps avoid stock-outs and overstocking. 

Most MSMEs work on repeat business. Generally, an exporter will find a buyer in a specific country who will place an order twice. Once trust is built, it becomes a regular business. Therefore, having software in place for demand forecasting and inventory management will positively impact the whole supply chain ecosystem. There are digital freight forwarders, who have successfully implemented tech that offers visibility and AI-enabled forecasting. With digitisation on the country’s plan, MSME exporters should avail of services by digital freight forwarding that will benefit them in many ways.

Forming and maintaining mutually beneficial relationships 

Finding trustworthy partners, such as logistical resources and suppliers, can be helpful in the long run. Having the proper partners and engaging them in open and honest communication can benefit your supply chain in various ways, including minimising uncertainty and strengthening the structure. 

Becoming adaptable 

Organisations must reorganise their operations and supply networks to thrive in the fast-evolving environment. Design, systems, procedures, and people must all be flexible. Blockchain, IoT, and other new technologies and tools must be tested and adopted quickly, allowing enterprises to establish a future supply chain.  

Managing the value chain 

A value chain is a business model that outlines the entire process of creating a product or service. The stages involved in moving a product from conception to distribution, as well as everything in between—such as obtaining raw materials, manufacturing operations, and marketing activities—make up a value chain for organisations that manufacture things. 

A well-organised value chain management system is the key to streamlining business operations while maximising revenues. Digital integration with service providers in the value chain would also benefit enterprises to be more reactive. 

The MSME sector, which is aptly referred to as the backbone of the economy, has the potential to foster growth and generate jobs. The benefits of fusing them with technology will allow India to develop, broaden its digital footprint, and achieve its $5 trillion economic goal. So, the emphasis should be on swiftly integrating and implementing new technologies that will take the industry to new heights. 

Sanjay Bhatia is the Co-founder and CEO of Freightwalla. Views expressed are the author’s own.

Also read: ECLGS: Finance ministry’s nearly 4x jump in credit support limit to airlines irks MSMEs?

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First published on: 08-10-2022 at 13:16 IST