YourStory SMB Week: Manufacturing SMBs bat for cost-saving through cloud technology amidst coronavirus lockdown

Due to the nationwide lockdown following the novel coronavirus pandemic, Indian Small and Medium Businesses (SMBs) are worried about ensuring business continuity. With restrictions on manufacturing, closure of units, and limited supply of goods, things look difficult for manufacturing SMBs.

At a time when revenues are hit due to the lockdown, manufacturing SMBs are wondering how to manage their fixed costs like rent, salary, interest, inventory, etc.

During YourStory’s “SMB week - Converse, Combat, Conquer”, a special, first-of-its kind WhatsApp chat series, powered by Amazon Web Services (AWS), industry experts from the manufacturing sector came together to advise SMBs how to manage fixed costs.

During the chat, the experts agreed that cutting expenses was critical to ensuring business continuity in the manufacturing sector.

Sukrit Bansal, Managing Director, Eauset, said, “I told my team to think and act as if there is no cash at all in the system. We started scrutinising all our expenses to understand why we were spending on certain areas, and figure out how to optimise these costs.”

He added that when the lockdown is lifted, his bathware and sanitaryware manufacturing company would only focus on making fast-moving SKUs to boost the number of incoming orders from suppliers.

Travel and tourism is one of the worst-hit sectors, and manufacturing companies related to the hospitality sector are uncertain about the way forward.

Rajat Jain, Managing Director, Kimirica Hunter International, said, “We manufacture hotel amenities for the hospitality sector. Now, we are focussing on supplying other products like hand sanitisers. We will need around six months to optimise our inventory levels.”

Cost-saving through tech solutions

Halting production, altering the manufacturing model and deferring payments are not the only ways manufacturing SMBs can optimise costs in the wake of the nationwide lockdown. The experts on the panel said that adopting technology such as cloud platforms can help SMBs not only to manage costs but also lower them.

He added that before adopting a cloud solution, SMBs need to ask a few questions about the solution’s key elements. First, they need to ask themselves if the solution will address their current and future needs. If it doesn’t, it could evolve into technology debt. Second, SMBs need to figure out if the cost of experimentation is low, and if the solution doesn’t work for them, if it can be discontinued easily.

The third question is if the cloud solution improves the SMB’s resilience, enhances its security, and boosts the availability of business operations. Lastly, SMBs need to see if the solution has been adopted by other companies in similar industries.

Gaurav Jalan, Founder, Packman Packaging, said, “The cost-saving benefits of cloud computing are paramount. Irrespective of the size of the business, there is a significant saving through the reduction of spending on computer accessories, IT resources, software, etc. Cloud computing can provide a small business with affordable access to various tools, programmes, and applications they require. The comparatively low costs of moving to the cloud make it a worthwhile consideration for almost every SMB.”

Cloud technology - the new normal?

Cloud technology allows solutions such as CRM, ERP hosting, web servers, IoT solutions in manufacturing, analytics stacks, and enterprise/custom applications to go global in minutes. Further, it can provide Infrastructure as a Code, DevSecOps, new development tools, and serverless frameworks to developers so they can build custom solutions for their own business use cases.

Due to these reasons, the experts argued that cloud-based technologies could become the new normal for manufacturing SMBs post COVID-19 to manage their business needs, reduce costs and boost productivity.

Ashok Rajpal, CEO and Managing Director, Ambrane India, said, “Without a doubt, cloud adoption will see a rise among SMBs. It gives SMBs access to the same technology and computing power used by large enterprises, without having to invest heavily in capital expenditure. We will also see the adoption of newer technologies, such as AI, to help SMBs streamline their supply chain and help in faster recovery after the lockdown.”

Arjun Bajaj, Director, Videotex International, echoed Ashok’s thoughts.

He said, “Cloud solutions allow us to manage our operations remotely. Also, since everything is in one place, we do not need additional licenses or software to formulate reports, record manufacturing, dispatches, accounts, etc. This helps us be more organised and saves time, which automatically improves efficiency and performance of our team, resulting in decreased costs.”

With the nationwide lockdown extended till May 3, 2020 for now, SMBs need to do everything they can to minimise expenses and stay afloat. The adoption of cloud technologies is poised to significantly impact cost-cutting for SMBs and play a role in determining which businesses survive and which shut shop.

Amazon Web Services (AWS) provides trusted, cloud-based solutions to meet the business needs of small and medium sized companies around the world. Whether you are running applications that share photos or you’re supporting the critical operations of your business, the AWS cloud provides rapid access to scalable, secure and low cost IT resources. For starting your digital journey you can reach out to us at https://aws.amazon.com/contact-us/