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Impediments to supply chain integration: An SME perspective

Guest post by
Kamaljeet Singh Bhatia, Lead Consultant, Infosys

 

The last few decades has witnessed numerous examples of significant competitive advantages through supply chain integration. Information sharing through superior technology is making enterprises capable to innovate and integrate in the complex networked environment. However information integration in supply chains is limited to large enterprises and small to medium scale enterprises (SME's) significantly lag to leverage technology for supply chain integration.

There has been abundance of research to identify and analyze the impediments to supply chain integration for SME's. The significant barriers indicated are:

  1. Lack of Strategic focus: SME's often lack a long term business and IT strategy, The management focus in often on short term gains. Business growth is limited to business manager's capacity to manage growth and ability to discover and exploit new growth opportunities and are often less aware of the full potential benefit of technology.
  2. Organizational capability and readiness: It is often difficult for SME's to garner funds to support dedicated technological innovation projects. Most small firms do not have funds to hire consultants. Less costly, Informal contacts can result in poor/Limited advice.
  3. Lack of external pressure (by suppliers or customers): External pressure to integration from supply chain partners like supplier or customer has been cited as one of the main reasons/motivation by SME's to adopt supply chain integration. External environment like industry, Region, Competition etc might lack thrust for SME's to adopt technology.
  4. Limited knowledge and expertise in IS: Lack for training in the rapidly changing technological environment often leaves the firm way behind the market. Lack of knowledge results in lack of vision within the management.

Despite the technological barriers, SME's have and would continue to play significant role in increasing global economy, SME's drive economic development by creating valuable source of employment specially the developing countries. It is hence important to remove these impediments and enable these enterprises to compete and connect to the global supply chain.

The onus lies not only on the enterprise itself but also on the consulting and Technology companies to be enabler and help small to medium size firm innovate. The next part of the blog would evaluate the options available, specifically technological products and tools provided by Oracle (Oracle EBS for SME's) that can be adopted with fewer resources in terms of capital and time.

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