The Under-19s fell to a narrow 2-1 defeat to the League One outfit and were unfortunate not to find the leveller in a much improved second half showing after Ben Hutton reduced the arrears.
Speaking to RangersTV after the defeat, Smith said his side can take plenty lessons from the 90 minutes: "It's why we're delighted to be in the competition. The learning is that when you go 1-0 down that you still need to regain composure quickly and not allow it to get to 2-0.
"I said to them in the dressing room that the schedule has been quite tough, but that's no excuse. We came here to perform and we didn't do that in the first half.
"We'll be better [for it]. I saw enough in the second half to remind me that we have some right good players.
"But we also need to suffer the first half too. We know we have good players and we'll react in the right way."
The young Gers found themselves 2-0 down at the half-time interval as Stenhousemuir took full advantage of a below par first half showing.
It left the side with a mountain to climb in the second 45 minutes and, despite their best efforts following Hutton's back post strike, they couldn't quite find the equaliser they craved.
Smith added: "In this competition you can't switch off for five minutes and go 2-0 down because the difference becomes too big.
"I understand parts of it. It's a new competition and a different environment and pressure playing against a first-team. But I would still expect us to handle that better.
"We were nowhere near it in the first half, but in the second half we looked more like I would expect us to look.
"The changes had an impact, and I felt at the end we were pushing towards the equaliser, but we gave ourselves too much to do. There were some real positives in the second half."
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