SMEs bear the brunt of global supply chain disruptions: Research

Small businesses are bearing the brunt of disruptions to global supply chains as the pandemic and geopolitical tensions push the price of shipping higher, new research has found.

Research by Asialink Business, supported by shipping company Toll Group, has found smaller businesses are less resilient to supply chain disruptions than larger companies that have the resources to invest in sophisticated technology.

Released on Wednesday, the research found that businesses are able to overcome structural pressures on supply networks by moving production on-shore, adopting e-commerce, and using technology to build resilient supply chains.

Robert Law, director of research and advisory at Asialink Business, says the research shows that recent disruptions to supply chains are going to continue in the longer term. 

“The challenge now is how these small and medium businesses transform their supply chain and also take advantage of the opportunities that are available in the region,” Law tells SmartCompany.

Asialink Business — a research and advisory organisation — found that businesses need to think about supply chain resilience in broader terms than on-shoring production or diversifying suppliers.

“These approaches need to be coupled with real transformation of supply chain management, and particularly investment in technology,” Law says.

Law says businesses across Asia are rapidly adopting supply chain technology and Australian companies also need to invest in technology to keep pace.

“One of the things we saw, for businesses selling to Asian consumers via e-commerce, is that when they have the right partner they are able to take advantage of the trends in the region and respond to this exploding demand via e-commerce,” he says.

The research found that the small and medium businesses that were able to change how they engaged with their in-market partners and suppliers could capitalise on the growing popularity of e-commerce in Asia.

E-commerce in Asia is forecast to grow to $3.3 trillion by 2024, according to Asialink, which is why the organisation wants to identify how Australian businesses can capitalise on this growth.

“But businesses need to make sure that they plan, understand the market, decide on optimal channels and have a good market entry strategy,” Law says.

The release of the research comes after the competition regulator announced it will investigate alleged price gouging by businesses in the shipping container transport industry. 

On Tuesday, the Australian Competition and Consumer Commission (ACCC) revealed it will examine whether anti-competitive conduct has contributed to higher freight costs.