The impact of supply chain management practices on performance of SMEs

Abstract

The purpose of this study is to determine the underlying dimensions of supply chain management (SCM) practices and to empirically test a framework identifying the relationships among SCM practices, operational performance and SCM-related organizational performance with special emphasis on small and medium size enterprises (SMEs) in Turkey. Data for the study were collected from a sample of 203 manufacturing SMEs operating in the manufacture of fabricated metal products and general purpose machinery (NACE codes 28 and 29) within the city of Istanbul in Turkey. The research framework was tested using partial least squares method, which is a variance-based structural equation modeling approach. Based on exploratory factor analysis (EFA), SCM practices were grouped in two factors: outsourcing and multi-suppliers (OMS), and strategic collaboration and lean practices (SCLP). The results indicate that both factors of SCLP and OMS have direct positive and significant impact on operational performance. In contrast, both SCLP and OMS do not have a significant and direct impact on SCM-related organizational performance. Also, as the direct relationship between the two performance-constructs was found significant, both factors of SCM practices have an indirect and significant positive effect on ORG through OPER. Perhaps, the most serious limitation of this study was its narrow focus on Turkish manufacturing SMEs, thus precluding the generalization of findings to other emerging countries as well as other sectors such as service and government sectors that may benefit from a sound SCM strategy. By developing and validating a multi-dimensional construct of SCM practices and by exhibiting its value in improving operational performance of SMEs, it provides SCM managers with useful tool for evaluating the efficiency of their current SCM practices. Second, the analysis of the relationship between SCM practices and operational performance indicates that SCM practices might directly influence operational performance of SMEs. This paper adds to the body of knowledge by providing new data and empirical insights into the relationship between SCM practices and performance of SMEs operating in Turkey

Exploring the Relationships among Sustainable Manufacturing Practices, Business Performance and Competitive Advantage: Perspectives from a Developing Economy

“…PLS-SEM was used because of its suitability to analyze data from a small sample size and in order to avoid the multi-collinearity and measurement errors (Koh, Demirbag, Bayraktar, Tatoglu, & Zaim, 2007;Chen, 2010). A strong rule of thumb for sample size is the larger of either ten times the scale with the largest number of formative indicators or ten times the largest number of structural paths directed at a particular construct in the structural model (Chin, 2000).…”

A Literature Review on the Linkage between Supply Chain Challenges and Key Success Factors for Small and Medium Size Enterprises

“…These differences can be partly explained by the level of economic development in countries being compared. The link between the supply chain management and operational performance of SMEs in an emerging country (Turkey) context was confirmed by S. C. L. Koh et al (2007) research. Strategic collaboration and lean practices as well as outsourcing and multi suppliers have direct positive and significant impact on operational performance of SMEs.…”

Métodos Colaborativos Na Gestão De Cadeias De Suprimentos: Desafios De Implementação

“…A GCS, segundo Koh, Demirbag, Bayraktar, Tatoglu, e Zaim (2007) (Flynn, Huo, & Zhao, 2010 (2008) Cassivi (2006) Chan e Zhang (2011) Chang et al (2007) Choi e Suresh (2010) Danese (2007) Disney, Naim, e Potter (2004) Du et al (2009) Fliedner (2003) Pramatari (2007) Ramanathan (2012) Sari (2008) Son e Chwen (2008) Sparks e Beverly (2003) Thron, Nagy, e Gábor (2007) Thron, Nagy, e Wassan (2006) Vivaldini, Pires, e Souza (2010) Vivaldini, Souza, e Pires (2008) Whipple e Russell (2007) Yao et al (2013) Planejamento colaborativo da demanda final e da reposição dos estoques entre os participantes. Possui uma complexidade de implementação devido ao escopo da metodologia.…”