‘Low-cost innovation by MSMEs are key to minimising supply chain disruptions amid Covid-19’

Published: April 13, 2020 11:58:32 AM

Technology for MSMEs: As the country fights the Covid-19 pandemic, leveraging low-cost innovation and agility shall be the key to recovering from the disruptions caused by the outbreak.

The textile businesses in the MSME sector conventionally contributed to the production of apparel and garments.
  • By Rahul Garg

Technology for MSMEs: The capabilities of the MSME sector to provide low-cost innovation are crucial to combat the Covid-19 pandemic. There are 63.4 million units in the country that provide employment to 120 million people, that is, 24 per cent of the total workforce of 496 million people in India contributing 33.4 per cent of India’s manufacturing output and 45 per cent of the overall exports. The MSME sector in India has a proven history of providing low-cost innovation and agility. Two instances that assume significance are those of the lunar mission Chandrayan 1 and the mars orbiter mission Mangalyaan. Interestingly, MSME Tool Rooms supplied key components to both the missions including at least ten components for the Mars orbiter mission Mangalyaan and enabled unparalleled cost-efficiency.

Pivoting to Safety Equipments

The textile businesses in the MSME sector conventionally contributed to the production of apparel and garments. They have quickly shifted gears to the production of masks, gloves, and aprons needed to support the frontline Corona warriors across healthcare, sanitation, civil services, and utilities. One of the key reasons behind their agile transformation is the low investment into fixed assets, in-built flexibility, and granularity in their production lines and economies of scale derived from the hands-on expertise.

Enabling Hyperlocal Commerce

The unorganized retail sector that consists of the local grocery stores is enabling agile deliveries of essential goods of people to their doorsteps thereby reducing the turnaround time of procurement of essential goods and also reducing the risks of community transmission by reducing the need for people to come out of their homes and travel.

Also read: Covid-19: Small businesses in khadi, village industries plug mask shortage; make reusable face masks

Enabling Logistics

A lion’s share of the local mobilization of the cargo of essential goods is being undertaken by local logistics service providers. Such small scale logistics service providers employ local people, have an advantage of the know-how of local topography and shortest routes for milk-runs deliveries from local warehouses and depots to the nearby markets. In the absence of aggregators and inter-city solutions, logistics services being provided on a smaller scale using trucks or even hand-drawn carts have been helpful.

Post COVID-19 world

As the country looks ahead in the fight against the Covid-19 pandemic, leveraging low-cost innovation and agility shall be the key to recovering from the disruptions caused by the Covid-19 pandemic. A three-pronged approach focused on safety equipment, retail, and logistics sectors can enable the quick circulation of money in local economies, generate employment in a short time and ensure the outreach of social progress to the remote corners of the country. In the face of such unprecedented challenges, MSMEs that have traditionally served local Indian markets offer the best prospects of minimizing supply chain disruptions with their ability to provide on-ground support to communities of people through low-cost innovations. Such sector-specific MSME partnerships shall enable low-cost innovations, create horizontal equity in the economy and ensure that outcomes of economic recovery generate employment opportunities at the bottom of the pyramid.

Rahul Garg is the Founder of B2B e-commerce company Moglix. Views expressed are the author’s own.

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