Cost optimization in the supply chain will always be a focus area for MSMEs

Supply chains are now all about service differentiation, increasing market share and even for drawing a good amount of revenue out of them. Additionally, new tech trends are also multiplying the opportunities for small businesses as they learn the importance of supply chains. However, a few challenges still remain, says Sumit Bhatia, CEO at Aksum Trademart.


India Inc’s success depends on supply chains. Technology is a part of this, but it’s not the whole story. There’s more to it! It’s also about changing business models. As new trends such as AI, machine learning and drone deliveries are making supply chains connected, efficient and seamless. Small businesses are embracing digital platforms that enable visibility and collaborations across the value chain. However, a few traditional challenges are still there that might be shrinking the avenues for advancement of the supply chains of the Indian small businesses.

“Cost optimization in the supply chain will always be a focus area, even in the face of the pandemic,” says Sumit Bhatia, Co-founder and CEO at Aksum Trademart Private Limited.

In an interaction with SME Futures, he talks about the newer trends that are reshaping the trends in this sector while discussing the various facets of the supply chains vis-a-vis the businesses.

Edited excerpts:

How has the pandemic reshaped the supply chain market in India? Did the pandemic offer opportunities to players like you to find intelligent solutions for the SMEs?

Covid-19 hasn’t been just a short-term crisis. It has had a long-lasting impact on how supply chains function. Corporate leaders across the world need to build long term resilience in their supply chains for managing their business growth and expectations. SMEs were the worst affected, considering they didn’t have the same capabilities and resources available at their disposal as any large corporate does.

This provided a unique opportunity for Aksum and businesses like us. Since we help SME’s build in sufficient flexibility in their supply chain processes to protect against future disruptions. We help them to develop a framework that helps them to plan and execute their procurement operations and working capital management in a more efficient manner.

Also Read: MSME Minister Narayan Rane flags off ICAI’s MSME Yatra

Since the supply chain is critical to any business, what is the one old challenge that small businesses don’t have a proper solution for yet despite their increased use of technology and digitization?

Cost optimization in the supply chain will always be a focus area, even in the face of the pandemic. Most of the small businesses operate in a restricted geographical location, thereby limiting the scope for not only sales but also procurement, which reduces the value discovery of these businesses. We help SME’s address multiple challenges by doing the following things for them-

  • Expanding their markets by making a wider pool of suppliers and customers accessible to them, thereby creating a higher value discovery for their businesses.
  • Reducing the leakages in their supply chains through transparent processes, ultimately helping them to increase their profitability.
  • Passing the advantage of bulk buying to the SME’s, thereby helping them reduce their price disadvantage in comparison to the large corporates.
  • Unlocking funds intelligently by helping them to leverage the available banking and financing tools.

Also Read: A digital supply chain can be a game changer for the SME sector in India

India Inc is aggressively working on drone deliveries to make them a part of their supply chains or for last mile deliveries. Understanding this is the next big thing. What factors do you think might make the MSME businesses shy away from using them or how will they struggle to leverage this trend?

The rising use of drones by end users such as e-commerce, emergency aids and others has led to market expansion. E-commerce platforms especially are seeking ways to reduce delivery time and costs. Short distance drone deliveries have grown in popularity due to the fact that shorter distance deliveries do not need a large battery backup. It is to be seen how the technology evolves to enable long distance deliveries and what is the weight of the package that they can manage.

Industrial supplies are usually bulkier and need to be done over a longer distance, which is beyond the current capabilities of drones. As per a recent report by McKinsey & Company, it is estimated that more than 2000 drone deliveries are occurring each day worldwide. The progress for drone delivery has been substantial but ultimately the regulatory environment will determine the scale and scope of drone delivery operations.

Also Read: Centre proposes amendment in export policy for certain types of drones

AI is helping businesses convert their operational data into insightful business intelligence to identify and quantify improvement opportunities and to ultimately drive supply chain performance.

We are in the process of building capabilities to ultimately leverage AI to help us respond more quickly, accurately and successfully to our customers’ demands. Improved optimal inventory level determination is one key aspect that we are working on using AI.

Climate change and sustainability is another trend. Can you elaborate on the factors that small businesses must focus on to implement greener business solutions in order to be more environmentally responsible.

Also Read: Business Intelligence: Utilizing a Data-driven approach for improving the MSME industry

Climate change is real, and its impact has created a wide range of risks for businesses, ranging from rising energy prices to supply chain disruptions and labour shortages. All businesses should do their part in helping to conserve the environment. A few measures that can help the small businesses do their part include –

  • Using renewable energies as much as possible.
  • Reducing the waste in their business processes.
  • Recycling as much as possible.
  • Optimizing the transportation of their workforces.

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