Supply Chain Integration Implementation and Operational Capability in SMEs: A Literature Review and a Research Agenda

Abstract

Small and medium enterprises (SMEs) constitute the bulk of enterprises in Malaysia, and they are the major source of dynamism, innovation and flexibility in emerging and developing countries, as well as to the economies of most industrialised nations. Supply chain integration (SCI) is one of the most powerful tools available for ensuring growth and creating firm’s competitive advantage, thus leading to the significant gain for SMEs. The purpose of this study is to review the literature of implementation of SCI methodology in SMEs through highlighting their needs and challenges. A number of selected referred journal articles were analysed. The extent review of literature reveals that though SCI practices help SMEs to improve their operational and financial performance, the previous research is inconsistent in these findings. The inconsistency is attributed to a number of competencies and interrelated objectives between the SCI-performance relationships. Therefore, there is a need to find out the foci of practice initiatives implementation and operational capabilities development and the focus of operations strategy under different business environments. As such, Malaysian SMEs can explore which SCI practices and capabilities may influence the improvement of business performance. From the perspective of theoretical contribution, this paper is valuable to scholars working in identifying future areas of research as new findings could enrich the existing body of knowledge in supply chain, operations and manufacturing industry.