5 effective workarounds for MSMEs to improve their supply chains

During challenging times, it is vital for organisations to take care of their supply chains to ensure seamless operations and mitigate possible risks. Here are five ways MSMEs can enhance their supply chains.

5 effective workarounds for MSMEs to improve their supply chains

Saturday March 12, 2022,

4 min Read

Big or small, MSMEs need a powerful and robust supply chain to operate, grow, and transform their business successfully. An efficient supply chain is pivotal for better inventory turnaround, optimising resources, and bringing increased speed and agility to the overall system. It is also critical to serve customers in the best possible way and build long-term relationships. 


Currently, when businesses across shapes and sizes have suffered the whiplash of COVID-induced disruptions, the role of the supply chain becomes critical. 


From production to overall logistics to last-mile delivery, businesses are reeling under the pressure of increased uncertainty, muted demand, and a fragile overall business environment.

During these challenging times, it is very important to take care of the overall supply chain of the organisation to ensure seamless operations and mitigate possible risks.


Here are five simple yet very critical parameters that MSMEs can use to improve their supply chains and stay on top of their game.

Lay down the KPIs

The initial step connotes specifying the right Key Performance Indicators (KPIs). In the supply chain, there are a host of KPIs such as costing, inventory turnaround time, speed, customer satisfaction, overall rate of complaints, etc. 


The MSME should specify its KPIs, subject to the business and long-term strategy. It is important to give each KPI a weightage score. What might be very important for one business might not be essential for the other. Additionally, cost and resource optimisation are crucial but not as much as customer service. 


However, for a commodity-based business, this might not be the priority. (Or maybe, that depends!) Setting up the right KPIs (and weightage) can help in effectively planning and deploying a supply chain that is in sync with the long-term objectives of the business.

Set up an integrated platform

Even in an MSME, multiple functions operate simultaneously. It is important to develop a unified system that can integrate numerous individual functions such as production, operation, marketing, and logistics across a single system.

A unified system will ensure a real-time and seamless flow of data across functions and help the business get a complete view rather than working in silos.

It should be understood that silos and compartmentalised working are detrimental to an effective supply chain. The greater the transparency, the higher the synchronisation and symmetry in terms of the supply chain.

small business

Work with predictive analytics 

Analysing consumer preferences and forecasting demand accurately is paramount in the supply chain, as it helps in better planning. Demand forecasting aids in better inventory management, both for the raw materials as well as finished products. Consequently, it will enable MSMEs to avoid both stockouts and overstocking, thereby optimising costs. It might also help in understanding any shift in consumer behaviour.

Forge mutually beneficial partnerships

Identifying credible partners, including logistic resources and raw material suppliers, can be very helpful in the long run. Having the right partners and engaging them in open and frank communication can help in lowering uncertainty and strengthening your supply chain multifold. While dealing with partners, it is also imperative to know about their concerns so that a mutually beneficial and sustainable relationship can be forged.

Avoid unreliable partners as that will add to the challenges. Reliability and credibility in your partner are a must!

Address the HR challenge

In MSMEs, the supply chain function always takes the backseat, when compared to other functions such as accounting & finance, marketing, operations, etc. Mostly, there will not be a budget for a specialised supply chain team. 


However, in my experience, this is not a good idea, as it affects the business. No matter how small, it is always prudent to have a specialised supply chain team in place. This will not just help in operational compatibility, but will also be instrumental in the future scaling-up of the organisation.


(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

Edited by Teja Lele