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‘A resilient supply chain for CMSMEs is crucial for recovery ‘

Supply chains of the CMSME sector were disrupted severely by the Covid-19 pandemic

A resilient supply chain in the country’s Cottage Micro Small and Medium Enterprises (CMSMEs) sector would enhance business competitiveness, reduce cost of doing business and open up new market opportunities, experts said on Thursday. 

They made the observations at a webinar, entitled ‘Strengthening the Supply Chain of CMSMEs after COVID-19 Disruption,” organized by the Dhaka Chamber of Commerce & Industry (DCCI) in association with Friedrich Naumann Foundation for Freedom, Bangladesh. 

“The country’s cottage, micro, small and medium enterprises (CMSMEs) provide jobs to unskilled and semi-skilled people and contribute a lot in poverty alleviation. However, due to the Covid-19 pandemic CMSMEs  have overall been hit hard as sales have come down drastically,” said DCCI President Shams Mahmud. 

CMSMEs contribute 32% to GDP, with the sector creating employment opportunities for about 2.45 crore people or 40% of the country’s total employment.

Supply chains of the CMSME sector were disrupted severely by the Covid-19 pandemic. To recover from the pandemic and survive despite it, ensuring a sustainable and resilient supply chain in the new normal situation was  the key to business sustainability, said the business leader. 

Moreover, recent use of technology in the supply chain process had been increased to keep reliability, traceability and transparency. For CMSMEs, the country needed to strengthen the backward linkage industry to enhance efficient value addition in export, said Mahmud.    

Besides, an effective action plan was crucial to restore the supply chain for the sector and it would help recovery from the pandemic.   

“After the disruption caused by the Covid-19 pandemic, short, medium and long-term planning will boost the introduction of supply chains in the CMSME sector to fuel its export competitiveness, ” said Najmul Hossain, Country Representative, Friedrich Naumann Foundation for Freedom, Bangladesh.

For market promotion, a level playing field was important, he added.     

“CMSMEs are an important arm of the economic growth of Bangladesh. SMEs are playing increasingly important roles for the country’s economic development,” said Shankar Kumar Roy, corporate trainer and consultant of the DCCI, in his keynote presentation. 

 Lack of skilled manpower, old machinery, lack of information, limited access to finance, lack of access to harmonized tariff and non-tariff policies were some of the major challenges faced by SMEs in Bangladesh, said Roy. 

Incorporating supply chains in business allowed higher efficiency rates, decreased costs, increased output, increased profits and enhanced communication, he added. 

He also said implementation of a resilient supply chain would  help accelerate 40% – 60% revenue growth, improve 20%-40% customer satisfaction and lower 10%-20% transportation costs.

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