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Group 4a Scm_sme

Group 4a Scm_sme

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Published by Arun Sharma

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Published by: Arun Sharma on Sep 29, 2009
Copyright:Attribution Non-commercial


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Conservative – Start small, remain small Awareness of good SCM practices remains low Slow to implement SCM SCM is limited and localized Information Sharing is Lacking Low Level of IT Usage for SCM Lack of government support Risk of cost fluctuations Lack of right knowledge about demand forecasting resulting in a bullwhip effect

Security Infrastructure
 

Increased need for added security  Counterparty authentication software Security & consistency in transmission of Documents over the internet Trade off between Increased Security Vs Cost

trade-off between Reliability Vs Sustenance

IT Systems Fragmentation/Integration

POS Data collection and Warehouse management

Knowledge & Training
 

Lack of Technical training and technology exposure in Family owned SME’s. Low awareness of good SCM practices among SMEs. Low awareness of good SCM practices among SMEs Lack of information sharing between suppliers, customers and vendors adding to inefficiencies eventually leading to a bullwhip effect

Transmission of Information
 

Cost in adapting to new technology

Large costs associated with regular

Developing Modernized Infrastructure
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Lack of Technical training and technology exposure in Family owned SME’s. Internet Enabled modernized infrastructure necessary. Instant access to global customers and suppliers – must have. High Cost of Infrastructure factored into price of product

Solution Mismatch

Mismatch of Available technology solutions – most solutions address larger organizations . Lack of volume – huge cost of customization

Focus primarily on lowest costs of production and hence finished products usually of relatively minimal features (lean) and hence less lucrative. Constrained resources, for example electricity, insufficient budgets would lead them to resort to domestic power lines where as large scale industries would have dedicated sources of power adding to their advantages. No budget for R&D leads to dependency on third party vendors/groups which adds to hiring & licensing costs. Inferior logistics infrastructure in developing and underdeveloped economies

Limited application of available Inventory Management tools & techniques due to budget constraints which leads to inefficiencies within the system. No budget for IT implementation which further adds to the various production inconsistencies, overheads & ineffective communication of information among the units. The SMEs are usually quite stunted with production capacity and hence do not lay focus on volumes. Low focus on volumes leads to lower economies of scale and hence higher fixed costs.

Lack of coordination between different transportation and logistics authorities often leads to excessive documentation, poor connectivity between nodes prolonged transit times and order cycles in the logistics pipeline. Reduced bargaining power in operations with external 3PL due to small volumes. Reduced automation & efficiencies leading to increased cost per unit in quality certification efforts. Most SMEs face mental export barriers and are unaware of export assistance

Pro-SME policies

Interest free loans and subsidies to encourage IT usage Better bargaining power & economies to scale

Formation of consortia

Integration supply chain network of SMEs

Appointment of common consultant Re-aligning logistics operations, integration with regional service providers

Reduce regional differences

Reduce currency and political risk through operational hedging

SMEs should develop web of internal &

Government Incentives

Assists local enterprises to springboard into the region Digitize paperwork and reduce financial cash cycle

Trade Net System

Emphasis on Quality Infrastructure

Airports , Sea ports , communication and professionals


PSB proactive Assistance




Local Enterprise Finance Scheme (LEFS) to establish businesses and upgrade the operations

BusinessConnect Program
 Enable

SME seek new businesses and alliance with foreign partners Management and increase competitive edge increase profits , share information and form fusion

National Cost of Quality Program
 Cost

Business Fusion Program
 Collaborate



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