Helping SMEs counter supply chain disruption

By Carolina Cipres, ZLC Director of Research, Dr. Alicia Martínez de Yuso, ZLC Project Manager and Dr. Teresa de la Cruz, ZLC Project Manager.

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Small and medium sized enterprises are critical partners in most supply chains. But they also pose considerable risks. Often they are a speciality, or even a unique, supplier of goods or services that are not readily replaced. Meanwhile, they themselves may be dependent on inputs from a narrow supply base that is itself vulnerable. Impending supply chain threats that are specific to a small set of SMEs may not be flagged up by the usual sources of business intelligence. SMEs may lack the human resources to monitor threats closely, or the financial resources to take mitigating actions such as holding large buffer stocks.

Threats to supply chain resilience aren’t just one-off events such as factory fires, or well publicised crises, of which there are too many to mention; there can also be the more subtle effects, sometimes unintended, of changes in legislation, or innovations in technology.

And while SMEs are themselves the primary drivers for most of industry’s innovations, ironically they often lack knowledge of, and access to, innovative technologies and techniques that could make them more resilient to supply chain disruption.

This conundrum is being addressed by a new project, RISE-SME, to which ZLC has been appointed co-ordinator. Funded from the Horizon Europe budget, Resilient Industry Supply chain Enhancement for SMEs aims to develop a model which can help smaller companies detect and anticipate supply chain disruptions and identify advanced digital technologies that can enable more flexible, agile, adaptable and resilient supply chains, while at the same time becoming both more sustainable and more competitive (neither sustainability nor competitiveness is easily achievable if a firm is constantly fire-fighting in the supply chain).

RISE will build on previous Horizon Europe projects with which ZLC has been associated, including AI-Cube, ReSchape and Next-Net. We are starting by mapping parts of the industrial ecosystems and associated supply chains, with their critical supply chain nodes, edges, and dependencies, in four distinct industries – agrifood, digital, mobility-transport-automotive, and textiles – and geographical areas. They have been selected, not just because their ecosystems are in many ways very different, but because they enjoy ‘clusters’ of somewhat similar SMEs and host digital innovation hubs (DIHs), and they are in areas where industry has previously shown a willingness to work on development. We will be building on the existing Supply Chain Resilience Framework (itself developed around the three dimensions of readiness, response, and recovery) and create a new Supply Chain Resilience Index that will measure resilience ‘maturity’ across companies and ecosystems.

From this we will develop a methodology that can be used to detect and anticipate disruptions likely to have long-term supply chain effects, and thus guide firms in reducing their more critical dependencies and weaknesses, especially in advanced technologies.

We then want to map out the advanced and digital technologies and solutions that could be used by SMEs (and identify gaps in provision and uptake) to make their supply chain processes less uncertain and complex. We aim to develop a ‘matchmaking’ tool between technology suppliers, SMEs, both those that are already to some extent ‘tech-savvy’ and those with a more traditional approach, and other key supply chain actors. We will build these alliances around the existing clusters and DIHs, resulting in a pilot implementation plan for each one of the ecosystems.

The range of technologies that could be relevant is large (and so we will be looking for input from many technology partners). Included may be robotics, AI, IoT, blockchain, edge computing, AR/VR solutions, B2B digital platforms, Big Data and analytics, 3D printing, advanced materials, micro- and nano- technologies and photonics – the usual suspects but also some that may be less obvious.

For more information please contact Carolina Cipres [email protected]