THE INFLUENCE OF SUPPLY CHAIN MANAGEMENT ON THE PERFORMANCE OF SMALL TO MEDIUM ENTERPRISES IN SOUTHERN GAUTENG

Abstract

Supply chain management is becoming more complex for small and medium enterprises (SMEs) and the need to improve performance seems to be significantly necessary. For SMEs to be efficient and effective towards minimising disruptions within the supply chain, ensure availability of resources and improve just-in-time delivery, information sharing coupled with supply chain collaboration and responsiveness are essential strategies to enhancing business performance. Therefore, the current study regards supply chain collaboration, responsiveness and information sharing as major factors influencing not only SMEs performance, but also allowing SMEs to better coordinate their business activities both within and outside the business environment. In this study, a quantitative research methodology was applied. Relational governance theory (RGT) provided structure to a clear understanding of information sharing among SMEs and customers, highlighting that SMEs aiming to improve their performance, should adopt the style of collaborating with the right suppliers and continuously communicating with the members of the supply chain. Confirmatory factor analysis (CFA) and structural equation modelling (SEM) results support the empirical findings suggesting that the model fits the study. The reliability and validity of the constructs (composite reliability) and the average variance extracted sought the empirical findings that correlate the need for SMEs to employ information sharing, supply chain responsiveness and supply chain collaboration as a determinant influence on SMEs performance.