Skills SMEs need for better supply-chain management in 2023

In an uncertain economic climate, supply-chain supply chain management is a must-have. (Image: Unsplash)

In the last edition of Smart Growth, we discussed the critical challenges in supply-chain management that small and medium enterprises (SMEs) will face in 2023. The question is whether SMEs in India have the skills to manage and overcome such challenges.

Supply-chain management skills can vary widely, depending on a variety of factors, including the sector, location and the size and sophistication of the business. Some general observations, however, can be made about their supply-chain management capabilities.

India is home to a large number of SMEs, which account for a significant portion of the country’s economic output and employment.

Many of these businesses operate in fragmented and informal markets with limited resources, access to technology and advanced supply chain management tools. As a result, many SMEs in India struggle to manage their supply chains effectively.

They lack the knowledge and expertise to optimise procurement, production, and distribution processes, resulting in inefficiency, delays, and higher costs.

Moreover, they face challenges in accessing finance and building partnerships with suppliers, customers and logistics providers, which can limit their supply-chain management capabilities further.

Also read: Supply-chain headwinds that await SMEs in 2023

However, many SMEs have successfully implemented best practices in supply- chain management such as adopting digital technologies, building collaborative relationships with partners, and investing in training and development programmes.

These businesses have been able to improve operational efficiency, reduce costs, and enhance competitiveness in the marketplace.

While SMEs may face challenges in developing adequate supply-chain management skills, there are opportunities for them to improve their capabilities and achieve greater success in the global economy.

Let us look at some of the critical supply-chain skills that SMEs need for better efficiency and to meet critical challenges:

1 Digital literacy: As digital technologies continue to transform supply chain management, SMEs will need to develop a strong understanding of how to leverage technology to improve their operations. This includes skills such as data analysis, inventory management, and process automation.

2 Analytical skills: SME employees will need to possess strong analytical skills to analyse and interpret humongous amounts of data, including sales forecasts, inventory levels, and production schedules. They will also need to be able to identify trends, patterns and opportunities for improvement in the supply chain.

3 Communication: Effective communication skills will be essential for SME employees to work with suppliers, customers, and internal stakeholders. They will need to be able to communicate clearly, resolve conflicts and build strong relationships with key stakeholders.

4 Collaboration: Effective supply-chain management often involves working closely with suppliers, logistics providers, and other partners.

SMEs in India will need to develop strong negotiation skills, as well as the ability to build and maintain collaborative relationships with key stakeholders.

5 Problem solving and decision-making: SME employees will need to possess strong problem-solving and decision-making skills to respond quickly and effectively to supply-chain disruptions, shortages and other challenges.

They will also need to be able to make data-driven decisions, evaluate risks, and prioritise actions to minimise the impact of supply chain disruptions.

6 Adaptability and flexibility: As supply chain management continues to evolve, SME employees will need to be adaptable and flexible to respond to changing market conditions, new technologies, and emerging trends. They will need to be able to quickly learn new skills, adjust to new processes and systems, and embrace change.

7 Strategic planning: Indian SMEs must have a clear understanding of their supply chain goals and objectives, and how to align their strategies with the needs of their customers, suppliers and other stakeholders. This requires skills in areas such as forecasting, risk management and performance measurement.

8 Talent management: A strong supply chain depends on a skilled and motivated workforce. SMEs will need to invest in employee training and development as well as effective recruitment and retention strategies to build a high-performing supply chain team.

In essence, SME owners need to ensure that their employees possess a range of critical supply chain skills in 2023, as enumerated above. They should support the development of these skills through training and development programmes, mentoring and coaching, and providing opportunities for employees to gain hands-on experience in supply chain management.

Developing these skills will enable SMEs to build a strong, resilient, and competitive supply chain that can meet the needs of customers and ensure the enterprise’s long-term growth and success.