SMes need supply chain focus

June 23, 2009
by Purchasingb2b staff

Canada’s small- and medium-sized enterprises (SMEs) are struggling with rising costs and higher inventories caused by the recession, according to the UPS Business Monitor Canada.

The report found 32 per cent of SME owners list increasing costs as their main business issue. Meanwhile, 36 per cent of SMES conducting international trade say they’ve been affected by the cost of complying with new trade policies.

The data was corroborated by statistics in Canadian Manufacturers & Exporters’ (CME) most recent monthly "Business Conditions Survey," released June 24.

It shows 59 per cent of CME members are vexed by rising costs, while 31 per cent report excess inventories of raw materials and components. A comparable number say they have an overabundance of finished product.

“To survive the current recession and remain profitable, SMEs will have to set their sights on total supply chain effectiveness,” said Jayson Myers, president and CEO of CME.

“Twenty-first century supply chain management is an enigma to most SME owners and many don’t realize how powerful a tool it can be in cutting costs, inventories and considerable administrative time.”

SMEs must tackle the challenges by shifting their focus from traditional cost-cutting measures, such as staff reductions and streamlining internal operations, to optimizing their supply chains, he added.

—Photo credit: UPS