Supply Chain Analytics for MSME Clusters

Supply Chain Analytics for MSME Clusters

Rapid technology advances and dynamic market forces have altered the business landscape and the existing business models fundamentally. Information and Communication Technology (ICT) usage and deployment have opened the doors for all enterprises and especially Micro, Small, and Medium Enterprises (MSME), to compete in any marketplace. The following examples illustrate the power of ICT, the Internet, and the worldwide web:

  • The largest media company in the world is Facebook, but interestingly Facebook does not create any content. This content is created by its 2.94 billion monthly active users in 112 languages.
  • The largest cab company in the world is Uber, but interestingly Uber does not own any of the taxi cabs that use its ride-hailing app to provide mobility as a service for the gig economy. 122 million people use Uber every month in 72 countries and 10,000+ cities.
  • The largest retailer in the world is the e-commerce giant Alibaba, but interestingly, Alibaba does not own or run any swanky stores in malls or shopping complexes. Alibaba is a pure online-play retailer in a crowded virtual marketplace with a turnover of US$ 134.5 billion in 2022, as per the company’s financial statements.

ICT adoption and deployment across various processes and links in the supply chain has become a determinant of competitive advantage for enterprises. Interestingly, many of the buzzwords in Supply Chain Management (SCM), such as Vendor Managed Inventory (VMI), Point of Sale (POS), Collaborative Planning, Forecasting and Replenishment, and Enterprise Resource Planning (ERP), stem from ICT usage. The Covid-19 pandemic has also accelerated the digital transformation of enterprises and their supply chains.

MSME Sector in India

Micro, Small, and Medium Enterprises (MSME) sector has emerged as a vibrant sector of the Indian economy over the last five decades. MSMEs contribute more than 29% to the GDP and are responsible for 50% of the country's total exports. They are also accountable for one-third of India's manufacturing output. MSMEs are complementary to big industries as ancillary units. As per the MSME ministry’s annual report of 2021-2022, there were 65 lakhs+ MSMEs registered in the Udyam portal at the beginning of 2021, but the actual number is in the order of 10 times that number in sectors including manufacturing, services, and trades. 99% are micro, with 0.52% small and 0.1% medium. The number of jobs in the MSME sector is estimated to be 15+ crores.

To be continued . . .

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