How global disruption can have local implications

July 16th, 2020 – The global impact that the Covid-19 pandemic has had not only on public health, but on business, cannot be underestimated. It’s prudent to consider the impact such a global disruption of trade has on small and medium businesses. Anticipating and mitigating for the impact of unforeseen global events on supply chain management is crucial if SMEs who are reliant on goods from an affected area are to survive.

Small businesses are often the most vulnerable to unanticipated events and threats due to their size and lack of resources. These SMEs also often do not have a plan in place to deal with supply chain disruptions. SMEs are important drivers of economic growth in Africa, accounting for up to 90 percent of businesses in sub-Saharan Africa, an SME Initiatives advisory by the International Finance Corporation reports.

One thing we’re clearly seeing emerge from the global Covid-19 pandemic is that small and medium enterprises’ (SMEs) supply chains from hub regions across the globe have been severely disrupted on an unprecedented level, and with an unpredictable timeframe for resolution as the virus continues to impact industrial production. Companies that would usually import items to sell, particularly SMEs, are unable to continue with business as usual because of trade disruptions. So, the question we must ask is, how do these SMEs make their supply chain anti-fragile?

Digital commerce platforms and advances in fields like digital analytics and artificial intelligence can significantly help to mitigate the risks of supply chain fragility. Flexible cloud computing solutions, data collection and analysis and automation software can all contribute to the success of SMEs in the digital era. Cloud computing also gives businesses the ability to scale, cost-effectively, to new markets. This is particularly beneficial for SMEs, who often lacked the resources or infrastructure to expand before. Partnerships with companies like Jumia in Kenya and Nigeria also make Microsoft products available to SMEs in local currency.

The challenge now is to establish new supply chain avenues within Africa. The African Continental Free Trade Agreement (AfCFTA) can play the role of unlocking innovation, growth and productivity on the continent, especially for its SME segment, by translating spending power into economic development.

More…https://news.microsoft.com/en-xm/2020/07/16/how-global-disruption-can-have-local-implications/

Written by Microsoft

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