LEARNING how big companies navigate the disruptions could be one of the saving tools micro, small and medium enterprises (MSMEs) could adopt to withstand future shocks and strengthen their supply chains against risks, such as the Covid-19 pandemic.
This was the highlight during the Asia-Pacific Economic Cooperation (Apec) Business Advisory Council’s (Abac) MSME Supply Chain Resilience Capacity Building Workshop in Cebu City on Wednesday, July 26, 2023. The Cebu Chamber of Commerce and Industry (CCCI) and several organizations co-organized the activity.
CCCI president Charles Kenneth Co said in an interview that they picked supply chain resiliency as the main theme of the workshop, learning from the Covid-19 pandemic ordeal that exposed the strengths and weaknesses of every business.
“We had problems bringing in goods during the Covid-19 pandemic because of the border controls and it exposed a lot of weakness that we have. There were some shortages because we couldn’t get goods on time. So this workshop aims to address this issue so that we can learn from the Covid-19 pandemic and, hopefully, be more prepared if there’s another round of supply chain disruption that would happen,” he said.
The half-day workshop held in Nustar’s Fili Hotel Cebu was attended by 200 delegates from various business organizations in Cebu such as the Mandaue Chamber of Commerce and Industry, Cebuano Filipino Chinese Chamber of Commerce and Industry, Philippine Retailers Association-Cebu Chapter and the People’s Management Association of the Philippines.
Best practices
The event was an effort to benchmark with the best practices from key industry segments such as food, retail, transportation, logistics, healthcare and e-commerce for MSMEs to develop flexible strategies and strengthen their supply chains against risks.
Abac said understanding supply chain resilience is a key aspect that determines the success and sustainability of businesses, especially in responding rapidly to operational disruptions.
“This workshop comes at an auspicious time for Cebu’s economy, responding to the rapidly changing disruptions. As we move forward, we actively strive to foster collaboration and progress, and the Abac MSME Supply Chain Resilience Capacity Building Workshop aligns seamlessly with CCCI’s continued commitment to supporting our business community with effective strategies and insightful guidance to navigate the ever-evolving business landscape,” said Co.
He noted that MSMEs will benefit largely from the workshop as they get to learn how big companies that are more equipped were able to handle or manage various disruptions.
Diversify
Co said MSMEs were advised to diversify their products, markets and suppliers to survive supply chain challenges.
“We should have more choices, develop more suppliers so that if one cannot supply, then we have alternatives. We were also advised to take into consideration the geopolitical risks because if one country isn’t available, they can tap other market sources,” he said.
In a separate interview, entrepreneur Rey Calooy, who champions the MSME sector, said his key takeaway from the workshop is for the country to develop and strengthen the local supply chain.
“We are an import-driven country and with the pandemic that we’ve just experienced, it opened our eyes to really look into our own backyard and source materials here,” said Calooy, stressing that such a strategy is important in attaining food security.
Global supply chain
Meanwhile, global supply chain woes have eased, according to Co, citing specifically that container costs have gone down.
“We’ve seen how costs have spiked at the height of the Covid-19 pandemic. Although it hasn’t returned to the pre-pandemic level yet, we are in a much better position now in terms of cost,” he said.
To help MSMEs win big in this post-pandemic business environment and help them cope with rising costs, Shivin Kohli, senior manager for Economics Strategy of Access Partnership, said there is a need for speedy regulatory harmonization for MSMEs to compete with other big business industries and reduce cost of logistics.
This is in response to concerns on how to support small entrepreneurs who are struggling to work with large companies and other logistics providers, and what specific programs are available to reduce the cost of doing business.
Kohli said there are various teams working to address these challenges and that even the largest logistics providers have their own MSME programs.
Government support
He noted that governments, local governments in particular, have the sources and means to support small businesses when these challenges arise. Trade industries can also provide support.
But Kohli said it is important for small entrepreneurs to first identify where their gaps are and invest time in exploring as many alternatives as possible.
Moreover, Kohli said regulatory harmonization can provide assurance that firms can manage the cost of compliance when importing from different places with different requirements.
“So even if the logistics costs are directly high, at least the cost of complying with different product categories can be eased,” he added.
While situations vary for different people, Kohli said it is important for them to identify key supply chains, logistics nodes and logistics providers to ensure smooth business operations.
MSMEs should also speed up their digital adoption.
Kohli said the pandemic has created a high demand for existing digital and physical infrastructure, leading to an increase in prices.
“So if the sort of supply of physical infrastructures speed up and digitalize, then the cost of trading will go down themselves,” Kohli explained.
He emphasized that investing in infrastructure and digitalization, and ensuring that logistics providers can continue their work in times of disruption, can help reduce the cost of trade.