For Nepal-based MSMEs—whether in agriculture, manufacturing, retail, or services—understanding how your product moves from idea to customer is essential.
With rising costs, transportation hurdles, unpredictable border delays, and shifting consumer expectations, every MSME in Nepal should ask:
“How can I reduce delays, lower costs, and deliver better?”
The answer starts with a clear understanding of your supply chain.
What Is a Supply Chain?
A supply chain is the entire journey of a product or service—from sourcing raw materials, processing and manufacturing, to storing, transporting, and finally delivering it to customers.
Supply Chain = Suppliers + Production + Logistics + Storage + Delivery + Customer
Nepal-Specific Supply Chain Challenges
| Challenge | Description |
|---|---|
| 🌄 Difficult terrain | Remote areas are hard to access, especially during monsoon or winter. |
| 🌐 Dependence on imports | Many raw materials and equipment come from India or China. |
| 🛃 Border delays | Customs bottlenecks at points like Birgunj or Tatopani cause unpredictability. |
| 📉 Limited storage facilities | Few cold storage and warehousing options, especially in rural areas. |
| 🛺 Fragmented logistics | Many MSMEs rely on informal or uncoordinated transport networks. |
Key Elements of the Supply Chain for MSMEs
1. Sourcing
- Build relationships with multiple suppliers to manage risks.
- Local sourcing, when possible, reduces costs and delivery time.
- Negotiate for better payment terms or group purchasing deals.
2. Inventory Management
- Avoid overstocking or stockouts using simple tracking tools.
- Tools like Google Sheets, Tally, or Vyapar can be highly effective.
- Understand seasonal demand patterns, especially in agriculture and tourism.
3. Logistics & Transportation
- Know your lead times—how long goods take to arrive or be delivered.
- Work with reliable local transporters or third-party services.
- If selling online, learn how platforms like Daraz, SastoDeal, or Thulo.com manage deliveries.
4. Warehousing
- Use shared storage or explore cooperative models for cold chains.
- Invest in basic storage planning, especially for perishable goods.
5. Distribution & Last-Mile Delivery
- Use local courier services like Pathao, Upaya Cargo, or informal networks.
- Plan efficient delivery routes and keep customers informed via SMS or calls.
Illustrative Example: A Handicraft Business in Bhaktapur
Consider an illustrative example of a small business in Bhaktapur that produces handmade lokta paper products. It sources raw materials from Dolakha, manufactures in Bhaktapur, and exports to Europe.
Here’s how this business might improve its supply chain:
- Bulk purchases raw lokta during dry months for better pricing and stable supply.
- Partners with a logistics company to streamline international shipping and customs handling.
- Uses a Google Sheet to track inventory levels and customer orders.
These actions could lead to lower raw material costs, fewer delivery delays, and stronger customer satisfaction in export markets.
Supply Chain Tips for Nepal-Based MSMEs
| Tip | Action |
|---|---|
| Start small | Improve 1–2 supply chain steps first—like sourcing or delivery. |
| Use digital tools | Free tools can track inventory, orders, and costs effectively. |
| Collaborate | Partner with nearby MSMEs for joint transport or shared storage. |
| Plan for disruptions | Always have backup suppliers and alternative delivery routes. |
| Keep learning | Join local MSME forums or attend workshops by FNCCI or donor programs. |
Why It Matters: Benefits of a Strong Supply Chain
A streamlined supply chain helps MSMEs:
- Cut down on costs
- Avoid delivery delays or shortages
- Build trust with customers and partners
- Expand into new markets (local or international)
- Survive disruptions (fuel shortages, strikes, or lockdowns)
Tools & Resources (Free or Affordable)
| Tool | Purpose | Cost |
|---|---|---|
| Google Sheets | Inventory/order tracking | Free |
| Tally | Accounting + stock management | Affordable |
| Upaya City Cargo | Local logistics | Pay-per-use |
| Nepal Trade Information Portal | Export/import knowledge | Free |
| Daraz Seller Center | Online sales & logistics | Commission-based |
