Assignment Sample on MS60047E – Managing Small and Medium Enterprises
Introduction
During the worldwide epidemic, companies have been confronted with a variety of obstacles, and how they responded has influenced their resilience and their prospects of surviving the crises. In attempt to accommodate to this changing climate, small and medium-sized businesses (SMEs) are altering their supply chain process. Davison Canners is the subject company for this study. The firm was incorporated in 1978 and employs 108 employees (Davison Canners, 2017).
The UK-based small sized firm produces a wide range of goods, including hot eat desserts for foodservice as well as retail, and materials for dressings, pastry fillings, jams, including fruit juice.
The aim of this report is to effect of Covid-19 on sustainable supply chain process of UK SME. Considering the objectives, the study will include evaluation of challenges face by the chosen SME of the UK in its sustainable supply chain process from the pandemic crisis. This study looks into how SME had dealt with the challenges brought on by the COVID-19 epidemic. This study attempts to learn which change factors they have chosen to concentrate on and what kind of sustainability they have chosen as a response to the challenge. The study will be based on secondary research process on the topic including books and journals, online sources and other published materials.
Findings
Effect of Covid-19 on sustainable supply chain procedure of UK SMEs
Small and medium-sized firms contribute for half of all income created by UK companies as well as employ 44 percent of the workforce. In general, the COVID-19 crisis has had a massive impact on SME operations throughout the United Kingdom.
It is identified that supply chain administration is an essential component of every company’s sustainability strategy (Papadopoulos et. al. 2020). Recognizing company suppliers’ as well as clients’ ecological, social, as well as financial effect as well as sustainability has become more prevalent as many sectors strive for a more sustainable future. Governmental demands are expected to be the driving force behind this shift, but business constraints on suppliers and distributors are indeed evident.
All had an influence on distribution networks of the small and medium-sized businesses in the UK, from limits on people’s mobility and how commodities could be moved to the human influence of the infection that made it more difficult to provide products or deliver operations. To overcome such short-term consequences, or distribution network disturbances, inventiveness as well as resilience were necessary, as well as ensuring that global demand systems operated effectively enough to supportive groups including trade.
It has resulted in significant changes in the way providers are handled, as well as the reworking of current governance systems as well as techniques to match with the increased demands and pressures imposed on people, businesses, and linked distribution networks.
Throughout the years, leading up to the epidemic, sustainable supply chain management, often known as fair trade, had become more prominent (Ali et. al. 2021). A crucial component in an effective sustainability plan is how companies match their buying habits with their broader corporate sustainability objectives. The outbreak has highlighted the link amongst good sustainability performance as well as robustness, but it is with it in perspective that all see possibilities to ‘build out sustainable’ spread throughout the industry. More ethical and sustainable distribution channels will undoubtedly be critical to accomplishing the aim of rebuilding better.
Change of behavior in supply and sustainable management of the supply chain
The disruption and restriction within the UK influence the operations of SMEs like Davison Canners. The direct effect is on the changed behaviour of supply as the local sourcing is being disrupted. Many firms’ capital expenditures have been impacted by the Covid-19 crisis. Small businesses are more likely than bigger businesses to engage in areas impacted by the crisis, including lodging as well as food, creative industries, including infrastructure.
The biggest impact on activities is a drop in demand as well as the necessity to interrupt corporate activities. For several SMEs, secondary effects like as sustainable distribution network interruption as well as the cost of compliance with COVID-19 limitations posed further problems. A percentage of firms, from the other hand, said the epidemic had provided possibilities while others said it had stripped away advantages like a seamless changeover to new collective agreements.
Approximately half of the food consumed in the United Kingdom is imported, with fresh fruit accounting for 84 percent of the total. It relies significantly on EU nations like Spain for veggies including salads, as well as Italy for environmental products like canned tomatoes as well as pasta (Chowdhury et. al. 2021). Despite advancements in sustainable SCM as well as transportation, increased sourcing effectiveness has rendered supply chains more susceptible to interruptions. Several SMEs could find it difficult to re-establish ties with previous sustainable processes throughout the long run, after supply chains are being disrupted as well as ex partners have formed new partnerships and commercial contracts.
On the positive side, it has been identified that the business as if Davison Canners also reap the benefit as the global operations are being shut down and it enhances the approach of local and ethical sourcing for their materials (Abed, 2021). Apart from this, the costs are being increased that is considered the negative impact and SMEs in the region are struggling to reduce the cost of delivering the products and sourcing the raw materials.
Interruption spread up as well as down the supply chain in both ways: some businesses failed owing to a shortage of materials or finance, whereas others failed because their customers went bankrupt or cut their purchases. Distribution network concerns are simply one facet of the larger contingency plans challenge created by COVID-19 or amplified by it.
Challenges facing the business
Considering the basic challenges, it has been identified that in the context of demand side, an abrupt as well as sudden drop in demand and income for Davison Canners has a significant impact on their capacity to operate and produces serious cash difficulties. Moreover, customers face financial losses, concern of spreading the disease, and increased uncertainty, all of which limit expenditure as well as consuming. These consequences are exacerbated by the fact that employees are thrown off and businesses are unable to pay their employees.
This created major challenges for the firm in their supply chain sustainability for sourcing food materials, production, and delivery of the items.
The demand is being fluctuated for Davison Canner’s processed food items after Covid-19 hit as people had increased demand of the preserved products that can be used for the longer run. However, lack of supply of labour has affected due to the Covid-19 and it affects the supply of products in the marketplace.
Another challenge the firm has faced in the pandemic is engaging with the employees and continuation of the operations. Owing to the unavailability of sales volume as well as direct consumer access, the firm impacted by recent UK disasters may have destroyed their business premises as well as goods, including being unwilling to engage or keep personnel. If key vendors were in crisis-affected areas, affiliated firms outside the region could well have faced supply chain problems (Abed, 2021). The administration’s rapid response throughout the shape of policy indicators demonstrates that it recognises the threat posed by the growing crisis to the UK economy.
In the context of sustainable supply chain process, it has been identified that the government regulations of limited workers’ accessibility in the outlets, social distancing norms and other measures are also challenging the firm to manage the process of supply chain. It has direct impact on the effectiveness and productivity of the company. Challenges arise because of “blocked distribution networks,” in which commodities or resources are either in limited supply or could not be supplied (Chowdhury et. al. 2021). There might be additional key interconnections that prevent the distribution network from performing well. Delays in essential infrastructure maintenance, for instance, may cause the whole system in which the production line is located to reduce speed.
Government support measures
A variety of government measures have indeed been implemented to assist SMEs and big corporations affected by the corona virus. In this critical situation, government of UK introduced some relief and supportive strategies and policies for the SMEs. Small and medium-sized firms (SMEs) are especially vulnerable to the immediate effects of the actions adopted, since they generally have limited options than bigger corporations to endure lengthy cost hikes as well as cash flow interruptions. As a consequence, the looming health problem has swiftly turned into a financial catastrophe for so many.
For example, Furlough Plan by the government has helped SMEs with their financial strain that helped the firm in coping up with the challenges (National Federation of Self Employed & Small Businesses Limited, 2021). Small business can borrow anything from £25,000 to £10 million. Any company (excluding banks and insurers) can qualify before December 31, 2021, even those that have already borrowed via COVID-19 lending programmes.
Pay as You Grow (PAYG) is a new administration relief program which enables companies with Bounce Back Loans to change their payment plans in several ways to reduce their financial burden. Companies can choose to obtain a loan term extension from six to ten years at the very same reasonable interest rate of 2.5 percent. By spending only interests for 6 months, they may lower their regular expenses. As per the UK Business Bank, such alternatives could be utilised separately or in conjunction. It is indeed important to note, though, that any of these alternatives might result in a higher ultimate outstanding balance.
The administration’s rapid response throughout the shape of policy indicators demonstrates that it recognises the threat posed by the growing crisis to the UK economy. These actions are intended to mitigate the most serious effects as quickly as possible. In the following days, weeks, as well as months, more actions and implementation stages are anticipated.
Apart from this, government also support the SMEs with different new technologies and strategies for the small sized businesses like Davison Canners so that the firm can streamline the sustainable supply chain. The support in terms of tax reduction, loan support, financial and labour support also enable the firm to manage the crisis within the region. Apart from this, it has been identified that the government is also enabling local sourcing and other support policies that encourage consumers for sustainable processing of the operations.
Conclusion
By summing up the analysis, it has been identified that during the worldwide epidemic, companies have been confronted with a variety of obstacles, and how they responded has influenced their resilience and their prospects of surviving the crises. In attempt to accommodate to this changing climate, small and medium-sized businesses (SMEs) are altering their supply chain process. Further, the evaluation heighted that Covid-19 had an influence on distribution networks of the small and medium-sized businesses in the UK, from limits on people’s mobility and how commodities could be moved to the human influence of the infection that made it more difficult to provide products or deliver operations. To overcome such short-term consequences, or distribution network disturbances, inventiveness as well as resilience were necessary, as well as ensuring that sustainable demand systems operated effectively enough to supportive groups including trade.
Recommendations
SMEs are suggested to invest in digital supply chain instead of traditional for enhanced sustainability. As, new supply chain solutions are developing that substantially increase visibility throughout the end-to-end distribution chain, allowing businesses to better withstand such disruptions. The conventional linear distribution network paradigm is being replaced by digital supply networks (DSNs), which offer end-to-end transparency, collaboration, flexibility, including optimization by breaking down data silos and connecting companies to their entire supplier network.
Along with it, a robust distribution network that aspires to be adaptive and agile relies heavily on collaboration. In a supply chain, providing data is the most effective approach to improve visibility as well as decrease risks.
References
Books and Journals
Ali, M.H., Suleiman, N., Khalid, N., Tan, K.H., Tseng, M.L. and Kumar, M., (2021). Supply chain resilience reactive strategies for food SMEs in coping to COVID-19 crisis. Trends in Food Science & Technology.
Chowdhury, P., Paul, S.K., Kaisar, S. and Moktadir, M.A., (2021). COVID-19 pandemic related supply chain studies: A systematic review. Transportation Research Part E: Logistics and Transportation Review, p.102271.
Papadopoulos, T., Baltas, K.N. and Balta, M.E., (2020). The use of digital technologies by small and medium enterprises during COVID-19: Implications for theory and practice. International Journal of Information Management, 55, p.102192.
Online
Davison Canners, (2017). [Online]. Accessed through <http://www.davisoncanners.com/>.
National Federation of Self Employed & Small Businesses Limited, (2021). Pay As You Grow and COVID loan repayment support. [Online]. Accessed through <https://www.fsb.org.uk/resources-page/pay-as-you-grow-and-covid-loan-repayment-support.html>.
Bank of England, (2020). How has Covid-19 affected small UK companies? [Online]. Accessed through <https://www.bankofengland.co.uk/bank-overground/2020/how-has-covid-19-affected-small-uk-companies>.
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