This study aimed to analyze the effect of supply chain capability on business performance of small and medium enterprises (SMEs) in Yogyakarta. Supply chain capability is the ability to coordinate activities related to the flow of materials and products, both of which are within the organization and between organizations. Supply chain operational capability is measured using 3 capabilities including structural, logistical and the technological capability. The sample of this study were selected using simple random method. A total of 193,391 SMEs were analysed this study and resulting 100 SMEs that were used as the subjects. Moreover, this study employed multiple regression analysis to analyse the proposed hypothesis. The results showed that simultaneously and partially operational capability of supply chain consisting of the structural, logistics and the technological capability affect the business performance of SMEs in Yogyakarta.Keywords: SME, Supply Chain Operational Capability, Business Performance http://dx.doi.org/10.20885/jsb.vol20.iss1.art8 AbstrakPenelitian ini bertujuan untuk menganalisis efek kapabilitas rantai pasokan pada kinerja bisnis Usaha Mikro, Kecil, dan Menengah (UMKM) di Yogyakarta. Kapabilitas rantai pasokan adalah kapabilitas untuk mengkoordinasi aktivitas terkait arus material dan produk, keduanya berada dalam ranah organisasi dan antar organisasi. Kapabilitas rantai pasokan diukur menggunakan tiga kapabilitas meliputi kapabilitas struktural, logistikal, dan teknologikal. Sampel penelitian dipilih menggunakan metode acak sederhana. Total 193.391 UMKM dianalisis di riset ini dan menghasilkan 100 UMKM yang digunakan sebagai subjek penelitian. Lebih lanjut, penelitian ini menguji hipotesis dengan analisis regresi berganda. Hasil menunjukkan bahwa baik secara parsial maupun simultan, kapabilitas operasional yang meliputi struktural, logistikal, dan teknologikal berpengaruh pada kinerja bisnis UMKM di Yogyakarta.
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