 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.
Transmission of Information
 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
Cost in adapting to new
technology
 Large costs associated with regular
Developing Modernized
Infrastructure
 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
 Formation of consortia
 Better bargaining power & economies to
scale
 Integration supply chain network of
SMEs
 Appointment of common consultant
 Reduce regional differences
 Re-aligning logistics operations,
integration with regional service providers
 Reduce currency and political risk
through operational hedging
 SMEs should develop web of internal &
 Government Incentives
 Assists local enterprises to springboard into the region
 Trade Net System
 Digitize paperwork and reduce financial cash cycle
 Emphasis on Quality Infrastructure
 Airports , Sea ports , communication and Logistics
professionals
 PSB proactive in providing Financial
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
 National Cost of Quality Program
 Cost Management and increase competitive
edge increase profits
 Business Fusion Program
 Collaborate , share information and form fusion
groups
Braja|Eshita|Manu|Nitin|Siddharth