Supply chain sustainability performance measurement of small and medium sized enterprises using structural equation modeling

Chrisovalantis Malesios,Fuad Ben Abdelaziz,Prasanta K Dey

doi:10.1007/s10479-018-3080-z

Chrisovalantis Malesios, Fuad Ben Abdelaziz + Show 1 more

Open Access

https://doi.org/10.1007/s10479-018-3080-z

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Abstract

Sustainability of small and medium sized enterprises (SMEs) is significant as SMEs contribute to GDP substantially in every economy. This research develops an innovative sustainable supply chain performance measurement model for SMEs. Prior researches predominantly use balanced score card (BSC) approach that presume causal relationship of criteria and Data Envelopment Analysis (DEA), which derive efficiency of units from a few input and output criteria. While DEA is effective for policymakers, BSC is more suitable for individual SME. The proposed method that uses structural equation modeling (SEM) approach to derive the relationship of criteria and criteria weights formulates regression-type models for a specific region as well as for specific SME. The SEM-based supply chain sustainability performance measurement model is beneficial to policymakers as they can determine means for improvement at a regional level. The proposed method could also facilitate managers/owners of individual SMEs with measures for improving their supply chain sustainability performance. The method has been applied to three varied geographical locations in the UK, France and India in order to demonstrate its effectiveness.

Highlights

In comparison to large companies, small and medium sized enterprises (SMEs) have a tendency to be less engaged with environmental management practices and performance, and reduce environmental impact so that green supply chain, waste reduction and low carbon development can be achieved
For deriving parameter estimates we have used the method of weighted least squares, due to the nature of the collected data
Sample SMEs are selected for the study and responses to questionnaire are gathered

Summary

Introduction

In comparison to large companies, SMEs have a tendency to be less engaged with environmental management practices and performance, and reduce environmental impact so that green supply chain, waste reduction and low carbon development can be achieved. The barriers for SMEs is that environmental measures are typically thought of as expensive, even when cost reduction benefits are highlighted to them A large proportion of SMEs are unaware of environmental practices and that good sustainability can improve operational efficiencies, reduce costs and risks and provide new opportunities (Ammenberg and Hjelm 2003; Nejati et al 2016; Roxas et al 2016). SMEs often lack resources, finances, time and knowledge to implement environmental improvement measures. SMEs have low sustainability awareness (Prabawani 2013)

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