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How digitalising the supply chain can help MSMEs stay ahead

Tracy Liu
Tracy Liu • 5 min read
How digitalising the supply chain can help MSMEs stay ahead
Here are some tips that MSMEs can look out for to ensure the reliability of their supply chains and scale their business. Photo: Unsplash
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In the dynamic Southeast Asian economy, Micro, Small, and Medium-Sized Enterprises (MSMEs) are undoubtedly the unsung heroes in terms of driving growth and employment. To put things into perspective, MSMEs account for a whopping 97% of businesses in the region, contributing up to 28% of a country's economic output.

The region recognises the importance of these vital entities, having dedicated MSME stock markets in Indonesia, Malaysia, the Philippines, and Thailand to bolster financing. As MSMEs pivot towards vertical sectors like ecommerce, finance, and tech, they face mounting obstacles, ranging from larger competitors with abundant resources to geopolitical tensions. In today’s evolving digital landscape, staying competitive demands for MSMEs to embrace digital transformation in order to remain agile and efficient. This is especially crucial for retail businesses involving cold chains and cross-border logistics support.

However, the significance of digitalisation goes far beyond mere trend adoption; it entails cost reduction, adaptability, optimising operational efficiency, and gaining a competitive advantage. To ensure that their supply chains remain adaptable, reliable, and cost-efficient, MSMEs can look into collaborating with technologically forward logistic companies and suppliers to protect their supply chains.

Here are some tips that MSMEs can look out for to ensure the reliability of their supply chains and scale their business.

Responding swiftly to supply chain instability

Ongoing geopolitical tensions and fluctuations in oil and commodity prices have amplified the volatility in supply chains around the world. To counter these supply shocks, MSMEs can pivot by seeking the support of logistics providers capable of leveraging new technologies such as automation and the Internet of Things (IoTs), to maintain a reliable and responsive supply chain.

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From our phones to teleconferencing cameras, IoTs are a lot less foreign in our daily lives, improving our productivity and work experience. Coupled with automation, which can take the form of automated inventory checks or processing paperwork, this innovation can increase the efficacy of processes. Integrating IoT and automation into logistics solutions enhances supply chain agility and monitoring, ensuring adaptability for the organisation. At the first instance of a supply chain disruption, the automated processes will be regulated by the data received from IoTs, mitigating any potential negative impact. These businesses can then determine the issue and counteract the problem.

In the case of last-mile delivery services, the usage of an app on customers’ phones is an example of an IoT application whereby businesses are empowered to manage the inflow of data and address issues in a more seamless, fuss-free manner. Besides being able to automatically collate customer requests for delivery, app-based platforms are also able to push out automated updates around the delivery status of the parcel in real-time, improving the efficiency of the overall delivery process. To illustrate, 77% of Singapore-based deliveries arranged via the mobile app for last mile deliverer J&T Express Singapore wind up being delivered within the next working day, even when these packages are slated for standard delivery of between 1 to 3 working days.

To add on, logistics partners with end-to-end transport management systems in place are capable of bridging data from these app-based platforms to the corresponding warehousing solution – a point that becomes key to maintaining the quality of the overall customer experience in the case of sudden supply shocks. From warehousing solutions to cross-border delivery options, businesses that work closely with third-party logistics partners that have a full suite of delivery services stand to gain productivity benefits and elevate the customer experience while keeping costs at a minimum.

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Bridging technological gaps with a human touch

While it is more important than ever for MSMEs to tap on AI and automation tools to elevate customer service and facilitate more efficient warehousing and network planning, delivering a satisfactory customer experience remains a key consideration that should not be overlooked. Businesses would do well to strike a balance between leveraging technological innovations with the need for personalisation and interactivity.

AI-powered customer relationship management systems, otherwise known as chatbots, serve as a prime example of how technologies can be leveraged to elevate the customer experience. Through a series of carefully crafted personalised messages, customers are able to find quick solutions to issues encountered on the platform. This frees up inefficiencies involved in relying on live agents, increasing the rate of problem resolution. However, in cases where customers are still unsatisfied with the responses provided by these chatbots, they will be directed to an agent ready with insights from the AI-supported system, creating a virtuous circle of better service, higher satisfaction, and increasing customer engagement.

Businesses will do well to recognise that tapping on new technologies does not always automatically translate to automation. By focusing on building strong relationships with their network of customers, MSMEs can differentiate themselves against competitors.

Constructing a collaborative MSME ecosystem

While digitalisation of supply chains can be a daunting process that requires multiple levels of upskilling and retraining, it is imperative for businesses to remain adaptable. In the face of the challenges involved in digital transformation, the best way forward would often involve collaborating with ecosystem partners, such as suppliers and logistics providers, to keep costs low and ensure a more seamless transition. With such partnerships, logistics partners can focus on increasing the responsiveness and productivity of supply chains, leaving businesses to focus on preserving the human connection with their customers. Ultimately, businesses that will stay ahead of the curve are those able to strike the balance between digitisation and enhancing the customer experience.

Tracy Liu is the sales and marketing director at J&T Express Singapore

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