Companies, particularly the micro, small and medium enterprises (MSMEs), are advised to improve their supply chain planning process to survive and thrive in the new normal amid the pandemic.
Charlie Villaseñor, chairman of the board of Procurement and Supply Institute of Asia (PASIA), underscored the need to reinvent the way their businesses work.
“You know what it’s not because you are a small or medium organization, you don’t have to care about (the) supply chain. The more you have to care because you don’t have enough resources, you don’t have the expertise, and you don’t have the skill. And your business is nothing else –the supply chain,” he said in a webinar.
“Your ability to survive as an organization is not dependent on your marketing, your sales, or finance. It’s really more on the supply chain. These things are being digitalized and how can you actually cope up?,” he added.
Villaseñor said firms should ensure the items they buy are just enough for their needs.
“Forecasting and demand planning is very important. So you have to make sure that you always have to look at your sustainability from getting the most advantageous bills from your suppliers. I’m sure you are buying stuff that you try to use. Make sure (that supply is) consistent and you are actually getting the right suppliers to actually support you,” he added.
Villaseñor said they also need to establish a mechanism to enable them to deliver goods in the most effective and cost economical way.
“So use of small warehouses, use of transportation, of ecommerce delivery, couriers and everything have to actually be well analyzed because you just don’t know it but a big cost of your business is on transportation, production or distribution,” he said.
Villaseñor said doing good practices in procurement and good logistics are also imperative.
“There is a move towards more digitalization. As an MSME, how can I even pay for this digital e-commerce area? You have to find a way, there are better options on that. But key to it is to also embark into some level of tapping e-commerce and there are a lot of e-commerce platforms. But MSMEs, a lot of you also support business-to-business (transactions), the big company, so you have to take a look (at) what are your channels of selling your services or your products also,” he said.
Villaseñor said supply chain planning is very important, considering it as an enabler of business survival.
“If you don’t fix up all of the things you do in the MSME arena, the purchasing costs, manufacturing, and everything, you will never get your return on investment. The money is here. Resources have to be balanced on how you are going to make profitability. This is the reason why many companies, large companies, have put a lot of emphasis on better supply chain so how much which is more important for MSMEs to actually make it work for them,” he added.