Inflation, economic worries among top supply chain concerns for SMBs

As supply chains of all sizes struggle through disruptions, inflation, talent shortages and cybersecurity concerns, these issues are particularly acute for small and midsized businesses (SMB) according to a new report from Software Advice.

The survey, which was conducted online in February among 1,100 respondents in the U.S., UK, France, Germany and Australia, found that 45% of SMS supply chain managers cited inflation as their top concern, and 33% are most worried about a recession.

Respondents were screened to ensure they came from a business with less than $500 million in annual revenue and fewer than 1,500 employees.

“Along with these macroeconomic concerns, our recent study finds that supply chain leaders are struggling to hire skilled workers, safeguarding supply chain operations against cyber threats, and increasing technology investments,” wrote report author Olivia Montgomery. “SMB supply chain leaders should adopt diverse, strategic measures to address these challenges and build resilience in effective, scalable ways.”

The full report is available on Software Advice’s website.

Among other key findings:

• 80% of respondents report struggling to attract and retain talent
• 41% have experienced one or more cyberattacks in the last 12 months
• At least half of businesses in the U.S., UK, and France allocate 6% or more of their budget to supply chain technology spending
• In Australia, 51% report spending less than 5% of their budget on supply chain technology

Key strategies to improvement

The survey found SMBs are employing four key strategies to improve their supply chain operations, and it starts with diversifying their cost management. More than half (53%) report  negotiating supplier/logistics contracts while 39% said they are in a group purchasing organization to create more purchasing power.

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The company recommends enhancing employer branding and reputation, fostering a more positive work environment, and implementing flexible work arrangements such as hybrid and remote work or flexible hours are ways SMBs can mitigate talent shortage issues. Thirty percent of respondents said talent shortages are impacting their procurement abilities.

Investments in tech security are going up, with 46% saying they are maintaining or increasing their cybersecurity investment, which is higher than the number investing in artificial intelligence (44%). Still, more can be done. Software Advice suggests investing in employee training and conducting regular risk assessments.

And finally, the company recommends more technology investment which can lead to improved visibility and better analytics that can be leveraged in additional ways to reduce risk, better forecast demand, and optimize inventory levels among other benefits.

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