Barriers To Effective Supply Chain Management, Implementation, And Impact On Business Performance Of SMEs In South Africa

Abstract

Supply chain management (SCM) is vital for companies to achieve their goals and for information sharing. Operations managers are faced with many barriers in implementing SCM, particularly in developing economies such as South Africa. It is essential for managers of SMEs to know the key barriers and attempt to minimize them and improve competitive strength. This article presents the SCM implementation barriers and suggests significant variations between these barriers as well as their impact on the business performance of SMEs. Researchers and trained fieldworkers gathered the needed data through face-to-face interviews using structured questionnaires, obtaining a total of 249 usable questionnaires. The data analysis included frequencies, confirmatory factor analysis (CFA) in Amos 5, and structural equation modelling (SEM) run LISREL 8.8. The results revealed that the lack of economies of scale, poor organisation structures, and technological challenges are the major limitations to implementing SCM. The findings of this research provide invaluable information to scholars and researchers investigating the barriers of SCM implementation, and to SMEs managers who desire to implement SCM. The findings can assist the development of effective strategic and operational plans as well as to programs and projects designed to enhance SCM within SMEs in South Africa. The research paper concludes by discussing both academic and managerial implications of the results, providing future research directions.