5 Supply-chain Issues MSME Manufacturers Are Reviving With New-age Tech While multiple challenges surround MSMEs in India, from inefficient infrastructure to a lack of timely credit, some grave supply chain issues are far more underrated

With around 63.4 million units spread across the country, MSMEs account for about 6.11 per cent of the manufacturing GDP, 24.63 per cent of the GDP from services, and 33.4 per cent of India's manufacturing output. The numbers showcase the segment's crucial role in fortifying the country's economy. Hailed as the accelerators of entrepreneurship, they are widely scattered around the nation and generate a variety of goods and services to satisfy the demands of regional, national, and international value chains. In a developing country such as India, MSMEs can contribute to employment growth by being labor-intensive by nature, thus impacting economic challenges such as industrial development, entrepreneurship, economic empowerment, etc.

In terms of exports, MSMEs have come a long way in making India one of the major powers in the global EXIM community. Contributing almost half of the country's total exports and creating jobs for over a hundred million people has been considered the load-bearing beam of the Indian economy for ages. The rising graph of exports from the sector witnessed a dent during the pandemic.

In FY21, the value of MSME exports decreased by 7.6 per cent. Additionally, the total value of the goods exported during the pandemic put small and medium businesses' capacity to handle complex situations to the test by requiring them to be flexible and resilient without enough time to plan or prepare, resulting in the onset of automation in many of these enterprises.

While multiple challenges surround MSMEs in India, from inefficient infrastructure to a lack of timely credit, some grave supply chain issues are far more underrated. We have tried to list some of them.

Shipment delays and hence delay in revenue recovery
Shipment delays have been a common problem for exporters, costing them extra expenses, revenue delays, loss of credibility, etc. It can be critical for micro and small businesses facing a cash crunch and constantly requiring cash flow to keep running. Multiple factors contribute to such delays, including late receipt of documents, cargo visibility, customs clearance, unforeseen accidents, bad weather, etc., which can severely hamper the day-to-day operations of these players and impact their balance sheets.

Lack of insight-driven data to make better business decisions
Shipping can face several difficulties, such as poor flexibility, vehicle breakdowns, and ineffective last-mile delivery. Supply routes severely lack visibility, leading to delays and making the entire process more time-consuming, inaccurate, and inefficient. These elements could lower service quality and client satisfaction.

Excessive manual intervention, which increased the costs and decreased the efficiency
A large section of businesses still uses human data entry for industrial processes, according to a 2019 survey on the level of automation in the manufacturing sector. Manual processes have been shown to be tenaciously persistent, even in industries with high levels of automation, particularly when it comes to operational duties.

Lack of real-time cargo visibility
When the pandemic broke, a survey showed that 75 per cent of the firms reported supply chain interruption. Around 44 per cent of them lacked a defined plan for handling it. This has led to poor shipment tracking. For instance, any missing link in the entire supply chain process, from the source to the manufacturer and importer, such as an unexpected delay in the component's delivery to the production plan where no one in the chain is equipped with real-time visibility, can lead to poor decisions. In the current scenario, manual data collection processes cannot keep up with the processing needs as exporters take measures to gather more data at quicker rates and in larger quantities. With the adoption of automated supply chains, businesses can be positioned securely to expand and succeed in the data-rich future. New-age technology is changing the game by projecting accurate ETAs and flagging delivery challenges in advance to assist exporters in making a course correction. It showcases real-time cargo tracking to keep constant monitoring of the cargo status and a 100 per cent automated process, leading to increased efficiency and reduced consumption of resources.

Lack of end-to-end transparency and predictive capabilities
Businesses have come a long way from simply sending out a single message to inform the consumer that their delivery is on the way to now providing real-time live delivery updates. In the past, it was incredibly tedious to pinpoint a vessel's exact location. Relying only on manual transmissions can get exhausting and tricky. However, the digital transformation of logistics systems has dramatically altered the game. We now have tools that enable enterprises to access real-time visibility of delivery operations on the ground level. All the information is easily accessible on a single platform throughout the day, keeping all stakeholders informed at every step. To achieve comprehensive end-to-end supply chain transparency in the long run, exporters should be prepared to accelerate digitalization, predictive supply chain planning, and intelligent logistics.