The Effect of Environmental Uncertainty on Supply Chain Agility for Small and Medium-Sized Businesses (SMBs): Empirical Evidence on Coffee Shops in Indonesia

Anisa Aprilia ,Fitrotul Laili ,Peni Jati Setyowati ,Afrizal Wisnu Wardana ,Kristoforus Farian Waringga

doi:10.7176/ejbm/12-33-08

Abstract

The coffee shop business that is increasingly favored by business people in Indonesia has many challenges ranging from coffee bean suppliers to consumers with diverse demographics. The purpose of this study is to investigate the effect of environmental uncertainty on supply chain agility through supply chain orientation and market orientation variables. A total of 65 coffee shops have been used as research samples which are then analyzed by PLS-SEM to determine the effect between variables. The research findings indicate that environmental uncertainty has a very significant effect on supply chain agility. Thus, business owners and / or coffee shop managers must have the ability to respond quickly to an environment where the environment is difficult to predict but the response to environmental changes can indicate the success or failure of the decision making unit in the supply chain. Keywords: environmental uncertainty, supply chain agility, supply chain orientation, market orientation, coffee shop DOI: 10.7176/EJBM/12-33-08 Publication date: November 30 th 2020

Highlights

Companies can maintain competitive advantage by developing agility and innovation as their dynamic capabilities in today's global economy (Chen, 2019)
The variables and indicators must have a relationship with a value above 0.7 (Hullan, 1999), this is because each latent variable used must be able to describe 50% of the diversity in each indicator
Overall supply chain agility is influenced by environmental uncertainty, with the influencing factors being supply chain orientation and market orientation

Summary

Introduction

Companies can maintain competitive advantage by developing agility and innovation as their dynamic capabilities in today's global economy (Chen, 2019). Managers will be faced with uncertainties that provide more challenges to satisfy consumers in a fast time and still pay attention to quality in changing conditions, so they need to improve supply chain performance in responding to changes quickly. The skills to provide satisfaction to consumers and to deal with changes in a relatively short period of time can be called agility (Prater et al, 2001). Supply chain flexibility has emerged as an important management strategy for achieving competitive advantage and businesses should pay attention to improving their supply chain management practices to be flexible and responsive to unpredictable environments and to cope with changing customer needs (Jangga et al al., 2015)

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