The impact of supply chain management practices in Pakistan on performance of SMEs

Abstract

Purpose The aim behind this research is to know the basic components of supply chain management (SCM) practices and to exactly test a structure distinguishing the connections among operational performance, SCM practices and SCM-related organizational performance with unique accentuation on small and medium size enterprises (SMEs) in Pakistan. Methodology & Design Data for the study were collected from a sample of 235 employees of different SMEs operating in the Pakistan within the city of karachi. The research framework was tested using partial least squares method, which is a variance-based structural equation modeling approach. Findings Based grouped in two factors: on exploratory factor analysis (EFA), SCM practices 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 Oil OPER. Limitations Perhaps, the most serious limitation of this study was its narrow focus on Pakistani 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.