Globalization, the developing trend in which companies expand their operations internationally, has been both a blessing and a curse. Globalization has been a blessing as it opens up commercial opportunities beyond natural boundaries; improves free trade and improves the global economy on a large scale. On the contrary, it was a curse because it creates a competitive scenario that is not shared between SMEs and larger global players.
A study conducted by the World Bank Group claims that there are up to 445 million SMEs in emerging markets with up to 70 million of them classified as formal SMEs. The Competitiveness of Small and Medium-Sized Enterprises (COSME) program of the EU states that SMEs provide 85% of new jobs.
The table below shows the turnover of companies in the micro, SME and multinational companies shows how the shares are stacked against SMEs in terms of turnover compared to the important position they occupy in the economic scheme of things. So, there is an incredibly strong reason to ensure the sustainable survival of SMEs in an increasingly competitive economic climate.
Interestingly, SMEs can effectively compete against larger brands by exploiting their size to use proactive asset management systems. Supply management solutions can offer new levels of efficiency by optimizing product delivery times or ensuring minimum stock levels. The optimization of the supply chain can help reduce costs, eliminate waste and guarantee greater customer satisfaction. This article provides an overview of current challenges with supply chain management for SMEs and how Blockchain technology could be a disruptive solution.
Supply chain problems faced by SMEs
Supply chain management systems can level the competitive landscape for SMEs and large companies. According to an LLamasoft study (see table below), approximately 91% of customers using SCM have declared a 31% efficiency in overcall costs. In particular, they achieved savings of 8% on inventory costs, a 19% saving on production costs and a 13% saving on transport costs.
However, current supply management systems are somehow unable to provide the proactive efficiency needed in today's hectic commercial environment. Firstly, many of the supply chain systems on the market are tailor-made for large companies to manage procurement logistics and distributions. SMEs often find it difficult to use the same systems because they are expensive or sometimes unsuitable for their smaller supply chain operations. SMEs often find themselves excluded from the advantages offered by supply chain management systems. Without an effective supply management system, SMEs will find it increasingly difficult;
- reach the visibility of the supply chain
- control costs, in particular those relating to transport
- identify and mitigate logistics risks
- build and maintain vibrant relationships between suppliers and partners
- meet the high expectations of customer service.
Another challenge with the current nature of supply chain management (especially in retail) is that consumers have no way of monitoring pre-delivery phases of their orders. Consumers are more and more attentive to health, ecology and socio-political conscience: consumers want to be sure that their food products have not been in contact with toxic insecticides, they want to be sure not to buy clothes made with labor exploited by children and want to be sure that their purchase is not inadvertently financing terrorism.
Blockchain solution for supply chains
Blockchain technology has introduced an unprecedented level of disruption between industries, markets and economies. As the mass market adoption of Blockchain technology continues to take shape gradually, it is reasonable to expect that the corporate environment will suffer some of these problems. TEMCO is a project based on the blockchain that wants to solve some of the problems inherent in the supply chain management ecosystem.
TEMCO is developing an RSK blockchain supply chain data platform – this is the same blockchain that powers Bitcoin. Using blockchain technology, TEMCO connects isolated supply chain systems to provide improved data services. Businesses can use the BI (Business Intelligence) tool to obtain in-depth business information while consumers can use an app to track real-time supply chain data on an online market platform facilitated by a system of cryptocurrency payment.
Blockchain technology can make a difference in supply chain management and IBM has been promoting this story over the past two years with its IBM blockchain for the supply chain platform.
IBM Blockchain offers a complete view of supply chain management focusing on logistics. IBM is particularly interested in ensuring traceability and transparency in logistics and supply chain management. The company boasts that its blockchain can optimize business transactions and business relationships with secure and secure global business networks.
Will Blockchain survive the downward trend in the crypt?
In recent months, the Blockchain projects and the ICOs in general have suffered a great deal of criticism, denigration and disdainful contempt since the cryptocurrencies have suffered a hard bearish market. The huge losses suffered by cryptocurrencies and the negative effects of Blockchain projects are enough to force people to rethink investments in the sector.
However, the Asian firms of VC have ignored the general air of pessimism in the market. KIP, a South Korean company that has invested in TEMCO and its potential to disrupt the supply chain management sector, and this is just one example. These VC investments at a time when all other crypto investors are rushing to exits also issue a vote of confidence in the potential of TEMCO to alter the narrative for the supply chain industry.