How SMEs start their digital transformation journey, with Bing Wu
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Sales reflect how well a company is doing but supply chain determines whether the company will survive or not.
In a highly competitive market where supply and demand are closely connected, supply chain has become the foundation of every business. It is widely agreed that digitalization is increasingly necessary to build more resilient supply chains with technological enabling and e-commerce platform integration. However, SMEs are often at a loss with how to start their transformational journey in this increasingly digital world.
The main challenges that SMEs often face during their digital journey are:
• Financial pressure – Budget, manpower limitations and failure to get quick results at the beginning of their transformation journey towards digitalization
• Integration issue - ‘Silo Effect’, which means that there is no proper communication system integrated between different departments, for example, Supply Chain information is not interconnected with Finance, Sales or Warehousing departments
• Scalability failure – The lack of efficient backbone ERP and Warehouse Management Systems makes it harder for businesses pursuing E-commerce to scale up quickly when given the opportunity to do so.
How can SMEs overcome financial stress while building a strong supply chain through digitalization?
In this week’s episode of The Stephanie Show, I interviewed Bing Wu, Managing Director of Inossem Canada, and he had some great advice on digitalization for SMEs in all industries.
Here are Bing’s top 3 tips that will help identify a starting point for an SME’s digitalization process.
• Build trustworthy partnerships with proper IT service providers
Building a partnership is not the same as simply finding a competent supplier. A trustworthy partner needs to be involved in the process starting at its origin, with high levels of contribution to the overall digital transformation strategy and roadmap, fostering a symbiotic business relationship that compensates for operational deficiencies by business partners. As an SME, you are familiar with your own operational structure, but you might lack the knowledge to utilize new technologies (such as Artificial Intelligence and Internet of Things) in the best possible way, or correctly identify which technology trends are appropriate for your company in that phase of time. A trustworthy partner does not only provide cookbooks to help an SME get rapid results with inexpensive SaaS-based solutions and agile methods, but also sets a feasible roadmap with a step-by-step approach and builds a long-term relationship that guides you through different phases in your journey of growth.
• Identify any bottlenecks and silos within your business processes
Bottlenecks pose a serious negative impact on the successful functioning of your finance and operations; however, it is from this that digitalization solutions can first be implemented. The bottleneck location varies from company to company or industry to industry, but the most common issues are that SMEs have finance systems, such as Quickbook, which are not interconnected with their Sales Order system or inventory/warehouse management systems. The information from one does not flow automatically to another, therefore, the operational efficiency suffers. Integrated systems such as SAP or ERP can help to remove “silos” if implemented properly at the right cost and quality.
• Enhance the core value of your finance and supply chain
In the past, supply chains served a similar purpose across all companies - ensuring supply flow. However, as the supply chain theory evolved, companies began to re-evaluate value proposition within their own supply chain. For example, in the retail industry, a successful high-performance supply chain must guarantee fast inventory turnover and low operational costs to ensure it squeezes the highest possible profit margin for your business. Finance, on the other side, needs to serve a centralized controller and analytical brain of the company, which means that it must get the reliable and real-time data from operations. Enhancing these core values will prepare the SMEs and make them ready to scale up when the fluctuating market provides them with opportunities.
A recent use case of digital transformation during the COVID-19 pandemic was a medium-sized Aluminum company based in Montreal, Canada. We helped this client implement cloud-based Smart warehouse solutions with IoT capabilities to accommodate their long-term strategy. The agile approach adopted by Inossem helped this client achieve quick results in just three months, and significantly increased their warehouse accuracy as well as their operational efficiency. Owing to their long-term and trustworthy partnerships with us, the same company expanded quickly their business and related solutions to new areas during the COVID-19 crisis.
Book : Discover Your True North by Bill George
Listen to the episode : How I made a major career change in my 30s, with Elke Rubach.
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