Changing Dynamics of Procurement in MSME and SME Industries in India

Abstract

Introduction: The market is drastically changing, so are the industries. With every state of technology finding its place in the market, the industry is forced to adapt to such changes and it becomes the new normal. With the advent of COVID-19, the technologically challenged companies were the most impacted and if we look into the industry segment dimension, it’s the MSME’s and SME’s that are still struggling to find their pace. Will they continue on their earlier format or adopt the state of technology and enter into the digital space? Well, even if they don’t, they will have to, sooner or later. Purpose: The study focuses on procurement practices, that MSMEs & SME’s are currently operating on and where they are heading in the next 10–15-year time frame. COVID-19 has brutally exposed and severally impacted the business and those who were operating on technology-challenged platforms are the worst affected ones. The study also lays stress on the digital procurement practices and could this be the next new normal for these industries as well. Methodology: The study comprises of primary research with two phases of an interview with MSME and SME industries with a sample space of 108 and also focuses on several procurement practices and their hierarchy preferences through AHP (Analytic Hierarchy Process) and Factor Rating Method for supplier selection. Findings: The study will help to evaluate the current position of both the sectors and their current standard operating procedure and what could be the new normal for these industries in the next 10-year time frame.