SMEs Spend Triple on Logistics Versus Larger Firms

Mexican SMEs spend up to three times more on logistics than larger companies, according to GS1 Mexico. By professionalizing their supply chain processes, these smaller companies could stay competitive in both local and global markets.

SMEs allocate about 28% of their sales revenues to logistics expenses, while larger companies spend just 9.7%, says Juan Molina, Director General, GS1 Mexico. Molina highlights that SMEs need to professionalize supply chain processes, as improving operations such as production, transportation, logistics, packaging, and recycling is crucial for ensuring long-term success.

"Although Mexican SMEs play a critical role in job creation, wealth generation, and innovation, both in physical stores and ecommerce platforms, many struggle to grow due to these operational challenges. Addressing these gaps is essential for them to reach their full potential and advance to the next level," says Molina.

As part of ongoing efforts to support SMEs, GS1 Mexico signed a partnership agreement with Tlaxcala’s Ministry of Labor and Competitiveness (STyC) during the second edition of GS1’s Business Factory event. This collaboration aims to drive the growth and professionalization of Tlaxcala’s SMEs by introducing global standards, such as barcodes and the Syncfonía electronic catalog, as well as technology and best practices.

GS1 Mexico has 127 partners in Tlaxcala, and aims to help more companies in the region adopt these global standards. This approach will enable local businesses to sell their products in larger commercial chains, online marketplaces, and export markets. "We are very excited about signing this agreement because it represents a true partnership to adopt GS1’s best practices in the digital transformation that our companies need today. There is no doubt that when we talk about competitiveness, we are also talking about digital transformation, which will enable businesses to engage with global markets," says Tlaxcala’s Minister of Labor José Altamirano. 

This agreement adds to a series of recent collaborations with various states across the country, including Mexico City, the State of Mexico, Tamaulipas, Hidalgo, and Quintana Roo, all aimed at fostering the growth and competitiveness of SMEs nationwide.

Supply Chain Opportunities

The complexity of logistics in industrial operations requires companies to choose the right partners, particularly SMEs looking to expand locally and internationally, according to Itzel Castañeda, Public Relations Coordinator, Nauta Global. “Navigating the supply chain can be challenging for SMEs, especially when it comes to imports and exports. That is why having access to services like customs brokerage, transportation, and international sourcing is critical. A tailored approach, based on the specific needs of each company, can make all the difference in ensuring smooth operations,” says Castañeda. 

Martha Munguía, Marketing Director, Tiastica, highlights the need for SMEs to focus on generating data and measuring KPIs to optimize their logistics operations. By tracking data, SMEs can identify the best routes and improve storage management. Technology plays a crucial role in this process. Munguía adds that many SMEs hesitate to adopt technology due to the misconception that it is expensive and only suited for larger companies. 

“It is important for us as service providers to offer strong support to SMEs, particularly in providing the best guidance. Many SMEs tend to look for specific products or consultancy services, but they often lack advisors who can help them determine which technologies or innovations are truly compatible with their business in the short, medium, and long terms,” says Yuliana Díaz, CEO, Tiastica, to MBN.

The lack of technological infrastructure is a significant challenge for SMEs, hindering the management of their supply chains, says Jocelyn Romero, Director General, Multimodal Solutions Cargo. Many SMEs still rely on manual processes, which could be streamlined through technology. Additionally, limited access to various transportation modes restricts companies' ability to reduce costs and improve delivery flexibility. 

Although SMEs often perceive railway transport as expensive, there are accessible market solutions available that can help them lower their costs while meeting their logistics needs. "We transport cargo primarily using a train-truck combination. Some clients have experienced savings of about 25% on transportation costs, which significantly reduces their overall expenses. However, clients can achieve even greater savings by conducting a comprehensive assessment of their entire supply chain. This allows them to identify areas of opportunity and implement improvements," Romero tells MBN.