IMPACT OF SUPPLY CHAIN MANAGEMENT PRACTICES ON INNOVATIVE PERFORMANCE: MEDIATING ROLE OF ORGANIZATION COMPETENCE AND COLLABORATIVE CAPABILITIES AS MODERATOR IN SME SECTOR

Background – Supply chain management practices can contribute towards firm performance whether financial or non-financial. This study thus aims to examine the impact of supply chain management (SCM) practices on innovative performance of small and medium-sized enterprises (SMEs) in Pakistan. The study also investigates the role of organizational competence as a mediator between SCM and innovative performance. Furthermore, organizations’ collaborative capabilities have been proposed as a moderator between SCM and organizational competence.

Methods– A questionnaire-based survey with 201 top executives of SMEs in the manufacturing, services, and trading sector of Punjab province of Pakistan was conducted in this study.

Results – The results show a significant positive relationship between supply chain management practices and the innovative performance of an organization. The role of organization competence as a mediator was also found to be significant. Furthermore, it has also been established that the collaborative capabilities of an organization play its positive role to enhance relationship between SCM practices and organizational competence.

Conclusions – The current study provides evidence of a relationship between SCM practices and innovative performance of SMEs. The results suggest that efforts should be directed at improving supply chain management practices in SMEs to enhance innovative performance through organizational competence. In addition, collaborative capabilities enhance the organizational competence of SMEs with the implementation of SCM practices.