The influence of sustainable supply chain management practices on financial sustainability of food processing SMEs

Abstract

PurposeThe importance of sustainable supply chain management practices (SSCMPs) in the financial performance of firms is increasing significantly. However, the influence of SSCMPs on financial performance can vary across sectors and contexts. This research aims to provide a comprehensive understanding of the influence of SSCMPs on the financial sustainability of small and medium-sized enterprises (SMEs) in the food processing industry. For this, the influence of sustainable environment practices, customer and supplier relationships, social SCMPs and lean supply chain on the financial sustainability of food processing SMEs is studied.Design/methodology/approachA questionnaire survey was conducted to collect data from 56 food processing SMEs in Mbeya, Tanzania. The study employed a cross-sectional research design and a census approach to capture data from all eligible SMEs in the target population. Exploratory factor analysis (EFA) and multiple linear regression (MLR) were utilized as the primary data analysis techniques.FindingsThe findings of the study revealed a positive and significant influence of various SSCMPs on the financial sustainability of food processing SMEs. Specifically, sustainable environment management practices (β = 0.147, p = 0.000), supplier relationship management (SRM) (β = 0.715, p = 0.001), customer relationship management (CRM) (β = 0.894, p = 0.016), social SCMP (β = 0.901, p = 0.005) and lean supply chain practices (β = 0.675, p = 0.003) were all found to have a significant effect on the financial sustainability of the surveyed food processing SMEs.Practical implicationsThe study recommends the need to plan and integrate SSCMPs in firms’ operation processes, promote collaboration and networking and offer capacity-building initiatives that equip food processing SMEs with the necessary skills and knowledge to implement SSCMPs effectively. These will nurture effective adoption of SSCMP, leading to improved operations, environmental performance, financial sustainability and long-term viability of the sector.Originality/valueWhile SSCMPs have gained attention in the literature, the specific focus on its impact on financial sustainability in the context of food processing SMEs adds originality to this research. Industry stakeholders and policymakers can utilize the findings of this study to develop supportive policies and programs that promote sustainable supply chain practices and enhance financial sustainability in the food processing sector.