Innovative Supply Chain Changing the SME Game

Small but not slow, SMEs (Small and Medium Enterprises) in Southeast Asia (SEA) are quickly adopting new technologies to lower the barrier of entering markets and catch up with more prominent players - much like their enterprise counterparts. Lean, agile teams that are free from the burden of legacy infrastructure are nimbly adopting off-the-shelf, innovative technology in their supply chain.

These companies are especially emboldened by SEA's conducive business environment. Business owners can look forward to significant support from governments for digital investment and adoption. Thailand has been providing strong support for local micro-SMEs undergoing digital transformation - a national agenda introduced this year. Within Singapore, recent initiatives such as the SMEs Go Digital and Industry Digital Plans were rolled out to help local SMEs uncover digitalisation opportunities.

More than ever, SMEs are poised to make great strides in today's digital economy through harnessing the power of an innovative supply chain.

Here are three ways in which SMEs in SEA are disrupting the traditional ways of doing business:

1. Overcoming lean resources with a competitive supply chain

Limited resources and capacity have traditionally hindered smaller businesses from dreaming big. However, SME owners today can strategically adopt solutions that maximise their use of resources while maintaining the highest quality of products and services. The rise of supply chain technology in recent years - accelerated by industry initiatives focusing on innovation and smart solutions - is opening up new possibilities for SMEs that are looking to improve their go-to-market strategy. Gartner revealed that the top eight supply chain technology trends for 2019 include artificial intelligence (AI), Internet of Things, automation, and blockchain - all of which are seeing high uptake in SEA.

In the context of meeting and shaping demands, cutting-edge logistics solutions will play a pivotal role in helping SMEs improve visibility into the market, remove unnecessary links, optimise resources, and improve productivity. The foundation is laid for SMEs to go on to transform the business landscape with unique customer experience and cost-savings opportunities.

2. Taking on the world with a global logistics network

Increasing connectivity and relaxed trade regulations can create an environment ripe for business expansion. But a borderless economy also comes with challenges such as difficulties in navigating international territories, complex customs requirements, and high costs, just to name a few. Whereas SMEs might have lacked the knowledge and experience to deal with these challenges in the past, they can now tap into the dynamic global supply chain to handle goods distribution and last-mile delivery in overseas markets. Strategic 3PL logistics partners with deep expertise in international trade routes, for instance, can help SMEs mitigate risks by providing data-backed guidance into freight matching, real-time communications, and demand predictions.

3. Differentiating through a focus on ethics and sustainability

Consumers are increasingly conscious of where and how products they buy are made, with a whopping 81 percent of global respondents feeling strongly about companies' environmental accountability, according to a Nielsen study. Leveraging on these sentiments, the supply chain stands out as an opportunity for SMEs to differentiate.

Across industries, investments in solutions that improve supply chain transparency and sustainability - important determinants of purchasing decisions today - are on the rise. There is much vigour in the blockchain conversation, particularly around its potential to track goods movements through every step of the way. AI and ML (Machine Learning) also play an important part in injecting more intelligence into logistics and giving rise to more accurate processes, such as shipping and resource planning, thus contributing to sustainability efforts.

There is still a general perception amongst business leaders that ethical practices will overhaul the supply chain and drive up operation costs. On the flip side, there is much to be gained from building a reputation as an ethical company. Going against the grain, SMEs are embracing new supply chain technology and changing the nature of business.

The writer is director of Southeast Asia at C.H. Robinson.