Sustaining SMEs Through Supply Chain Innovation in the COVID-19 Era

Sustaining SMEs Through Supply Chain Innovation in the COVID-19 Era

Yanamandra Ramakrishna
DOI: 10.4018/978-1-6684-4503-7.ch066
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Abstract

The COVID-19 pandemic has negatively affected the small and medium-sized enterprises (SMEs) in a significant manner. It has thrown some SMEs into a financial crunch, forced them to reduce/remove their workforce, hampered production due to prolonged lockdowns, halted their logistics and supply chain activities, and delayed their delivery schedules enormously. The revival of the SME sector is very important for the survival of the economy. One of the most important aspects of this revival strategy would be to innovate their existing supply chains for more visibility, transparency, and robustness through the adoption of affordable digital technologies. In spite of advanced studies in SC innovation, the in-depth studies related to this area of SMEs towards sustainability are still very scanty and inadequate. Therefore, this chapter proposes to develop a framework of SC Innovation for the sustainability of SMEs through a systematic literature review. This framework will be very useful to the owners and employees of SMEs and various researchers.
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Introduction

The Covid-19 pandemic has affected many business sectors in the world. Most significantly, it has caused huge losses to the Small and Medium Enterprises (hereinafter abbreviated as SMEs) sector in every country and to the global economy (Ahmad et al 2020; Hakovirta and Denuwara 2020). Many SMEs have been facing several difficulties in operating their enterprises and some of them have even reached the stage of closing their businesses. Growth of SME sector is backbone for every economy due to its significant contribution in multiple businesses (Winarsih et al 2020). SMEs faced severe financial crunch, production halts due to prolonged lockdowns in several countries, problems due to the resizing of manpower, non-availability of raw material on a continuous basis and lack of demand (Hakovirta and Denuwara 2020; Sharma 2020; Smith-Bingham and Hariharan 2020). SMEs were unable to meet their targets and adhere to the delivery schedules given to the clients. All these problems landed SMEs in a threatening situation questioning their survival and sustainability in long run. Several governments have announced initiatives and incentive packages to these enterprises proactively to counter the situation to bring them back to the normalcy and to enable them towards achieving sustainability.

Revival of SMEs is an utmost priority and need of the hour to boost up the suffering economies worldwide (Storey 2016; Ivanov 2020). Providing tax incentives and simple announcement of financial packages may not solve the issues and challenges of SMEs totally, unless a strategic approach is adopted by them. SMEs also need an appropriate guidance and training by researchers, professionals, and practitioners towards developing such strategic approaches for their sustainability in the Post Covid-19 era. Among the strategies to be adopted by SMEs in future towards sustainability, the role of Supply Chain Management (SCM) will be highly significant. Adoption of Supply Chain (SC) practices by SMEs is found to improve the efficiency, enhance product availability, increase productivity, reduce costs and improve customer satisfaction. Many SME have already achieved these positive outcomes through SCM (Koh et al 2007; Kot et al 2020). At the same time, mere adoption of SC practices is also found to develop a saturated condition for several enterprises in achieving long-run sustainability, including the large size enterprises also. Therefore, the focus got shifted towards innovating the supply chains, known as Supply Chain Innovation (SCI), especially in SMEs to counter the pandemic situations successfully and achieve reasonable sustainability. Innovating the existing SC provides visibility, transparency, networking ability, development of mutual trust through collaboration, resilience, integration of processes by using affordable digital technologies (Sharma 2020; Shibin et al. 2020; Arunachalam 2017; Kot et al. 2020). Acquiring these abilities take SMEs towards long-term growth and sustainable situation in the post-pandemic era.

Many authors have developed theories, frameworks and models related to SC, its concepts, strategies, practices, performance measurement, and positive outcomes by focusing on large size organizations only (Hong 2006; Koh et al 2007; Ivanov 2020). Though there are studies in these areas which focused on SMEs, very few of them have focused on SC innovation in SMEs, especially by relating them to achieving sustainability during pandemic situations (Victoria 2009; Arunachalam 2017; Kot et al 2020). Therefore, considering this research gap, the chapter develops a framework of sustainability in SMEs by integrating SCM practices to be adopted during post-pandemic situation to achieve SC innovation, which leads to the sustainability of SMEs through the help of digital technology enablers. A systematic literature review methodology has been adopted to develop the framework. The framework will add value to the existing body of knowledge and provides an awareness to the owners and managers of SMEs for successfully achieving sustainability to a reasonable level during the pandemic and post-pandemic situation.

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