In the evolving digital landscape, staying competitive requires businesses especially MSMEs to move beyond conventional approaches. Recognising the importance, MSMEs are adopting digital technologies and embracing transformation to remain agile and efficient. At the heart of this transformation is digitising supply chains.
Factors like global pandemic, dynamic customer preferences and large-scale digitisation have led to revolutionising the supply chain system across businesses. This brings us to the topic of discussion for this article - “Digitising Supply Chains”. This article is a part of the podcast series presented by DBS Bank and Moneycontrol which highlights the transition journey of SMEs from "Small Business to Smart Business".
To grasp the advantages, prospects, and obstacles encountered by MSMEs when embracing digitisation in supply chain management, we engage with industry leaders and experts including Mr. Venkatesh Seshadri (Head – Supply Chain Consulting, Confederation of Indian Industry), Mr. Sandeep Kulkarni (Chief Supply Chain Officer, Tata Cliq), and Mr. Divyesh Dalal (Managing Director and Head – Global Transaction Services, DBS Bank India) to draw valuable insights on the topic.
Embracing digitisation in supply chain management
Over the past few years, the notion of digitisation has emerged as a transformative force spanning various industries. For MSMEs, the significance of digitisation goes far beyond mere trend adoption; it entails cost reduction, optimising operational efficiency, reducing time-to-market, maximising productivity, and gaining a competitive advantage.
Furthermore, a robust supply chain enables seamless operations and is crucial for the growth of a business. It plays a vital role in delivering better customer experience and nurturing long-term relationships with the customers. Not just customers, it helps to nurture collaboration and communication between MSMEs and their vendors, thus leading to accelerated synchronisation and reduced lead durations.
Supply chain digitisation brings enhanced visibility and transparency across the supply chain, empowering MSMEs to identify growth hurdles, streamline operations, and make informed decisions. In addition, it unlocks opportunities for insights driven by data, enabling predictive analytics that can guide inventory management and forecast demand trends.
Unlocking effective digitisation at optimal costs
While digitisation in the supply chain offers numerous benefits, it is important to understand that digitisation doesn't necessarily require cutting-edge technology. Small businesses can achieve it by integrating existing tools and systems through APIs.
Mr. Sandeep Kulkarni puts across a very interesting point in this context. He says, “For a cost-effective and valuable digital transformation, it is crucial to adopt a value-driven approach over a technology-focused approach. Before rushing up to implement technology, MSMEs should define the value their supply chain should provide, assess the needed digital capabilities, modify existing processes, and consider the environment.”
Leveraging optimal logistics for competitive advantage among MSMEs
Logistics play a critical role in supply chain management. Mr. Venkatesh Seshadri throws light on how effective logistics drive small businesses to excel. He says, “By boosting logistics competitiveness, SMEs and MSMEs can gain a competitive edge in the business. It can be achieved with a collaborative approach by involving larger corporations to leverage their expertise and buying power to aid SMEs.”
He further highlights the pivotal role of industry bodies like The Confederation of Indian Industry (CII) in assisting MSMEs targeting export markets with logistics through engagements and best practices. He adds, “Engagements with export organizations and collaboration with the Ministry can help identify and address logistics challenges faced by small exporters.”
Challenges encountered by MSMEs in digitising supply chains
MSMEs encounter several challenges in their digital transformation journey. One of the biggest challenges is access to subsidised credit. Often MSMEs lack knowledge of available subsidised credit or how to access it, which hinders their growth. Besides, MSMEs also encounter a problem in getting quick and efficient access to digital financing without the burden of extensive paperwork.
Another challenge is access to customer demand information for their products or services. MSMEs need this information to make informed decisions. Lastly, integrating with various platforms for exports or imports can be complex and time-consuming without proper digital interfaces.
DBS Bank is empowering MSMEs through tailored digital solutions
DBS Bank plays a pivotal role in addressing the above-mentioned challenges and in supporting supply chain digitisation across MSMEs. Mr. Divyesh Dalal shares several initiatives taken by DBS Bank to empower MSMEs.
He says, “DBS Bank’s online platform enables access to faster and simplified financing, thus reducing turnaround times. The bank also provides efficient liquidity solutions for temporary liquidity challenges faced by MSMEs.”
He further adds, “Bank’s integration with accounting software like Tally facilitates seamless payment and banking solutions. Moreover, our partnership with platforms like ODeX ensures smoother integration with ports and shipliners, aiding smoother export/import processes for MSMEs.”
Key benefits of integrated digital and supply chain financing facility
Integrated digital and supply chain financing offers significant advantages for MSMEs. Firstly, it simplifies the lending process by connecting SMEs with willing banks through digital channels, expediting access to funds. Secondly, this approach enables SMEs to capitalize on sales opportunities by providing financing based on purchase orders, allowing them to fulfill more orders and expand their market presence.
The integrated solution also aids in liquidity management by offering efficient liquidity solutions and passive investment options, contributing to better financial management during temporary liquidity challenges.
Mr. Divyesh Dalal further shares, “Online platforms provide working capital financing, ensuring that SMEs can maintain smooth operations. Besides, with transparent foreign exchange solutions available online, SMEs can navigate international transactions more effectively.”
Overall, integrated digital and supply chain financing solutions empower MSMEs to enhance their operational efficiency, expand their reach, and achieve sustainable growth.
Conclusion
Digitising supply chains can bring the world to MSME’s doorsteps and collaborating with growth partners like DBS Bank can help these MSMEs unleash their full potential amidst the evolving business landscape.
Moneycontrol Journalists are not involved in creation of this article.
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