Benchmarking the viability of SCM for entrepreneurial business model design

Abstract

PurposeThe purpose of this paper is to benchmark the viability of collaborative supply chain (SC) business models for small businesses.Design/methodology/approachSurvey data was collected from 81 companies with 100 or fewer employees, 169 companies with 101‐500 employees, and 308 companies with more than 500 employees. To help contextualize the findings, eight in‐depth interviews with small firms were conducted.FindingsBenchmarking the viability of collaborative SC business models using a contingency, resource‐based‐view assessment paradigm reveals a perplexing paradox. Managers at small firms suggest that the majority of the benefits of SCM are within their reach. They also note that the barriers to implementation do not intimidate them. However, they also report that they are not actively pursuing SCM as a strategic weapon. Our research shows that the best way to avoid the cost squeeze and death spiral encountered by small business in today's global SC environment is to create the collaborative capabilities promoted by SCM. That is, while large firms leverage size firms must leverage creative collaboration to insinuate themselves into competitive SC teams to drive long‐term growth. We recommend three alternative SCM strategies based on the small firm's growth strategy.Originality/valueThe small‐business literature on supply chain management (SCM) is relatively scant and provides conflicting views of SCM's viability. This research represents a unique multi‐method approach that shows that SCM is applicable to the world of small business.