Sustainability integration and supply chain performance of manufacturing small and medium size enterprises

Abstract

Purpose The purpose of this paper is to use empirical data to examine the impacts of integrating sustainability elements on the performance of supply chains of manufacturing small and medium scale enterprises (SMEs). Design/methodology/approach The conceptual framework was based on the systems theory and the triple bottom line concept. Purposive sampling approach was used to collect data from a cross-section of manufacturing SMEs. Partial least square (PLS) structural equation modeling (SEM) approach was used to explore the relationships among the constructs. Findings The results indicate strong statistically significant positive relationships between each of the three sustainability elements and integration constructs. Sustainability integration is a mediating variable that explains a significant variance in performance of a supply chain. Supply chain performance is determined by the degree of integration of the three sustainability elements. Research limitations/implications The research focused on SMEs in the manufacturing industry in a less developed economy. An extension of the findings to the service industry and larger manufacturing firms and different operating environments may be limited. Practical implications Sustainability integration enhances supply chain performance and can be a competitive tool for manufacturing SMEs. The research emphasizes the value of sustainability integration into supply chains of manufacturing SMEs in less developed countries. Originality/value This is an original research that examined the impacts of sustainability integration on performance of supply chains of manufacturing SMEs in a developing economy. This research used empirical data to establish that integration of the three sustainability elements collectively acts as a critical mediating variable that determines the performance of a supply chain. The research also demonstrates the use of PLS-SEM to analyze supply chain attributes that cannot be directly measured.

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