Examining the influence of supplier integration on supply chain performance in South African small and medium enterprises

Abstract

Background: As the South African economy continues to grow, the role of small and medium-sized enterprises (SMEs) as a potential source for employment creation and productivity within the country has become widely acknowledged. However, one area in which the SMEs in the country still need to develop is in their implementation of supply chain management practices, particularly their relationships with suppliers, which could result in either the failure or success of any business enterprise. Majority of studies conducted in this area have focussed on large firms, thereby creating a research gap in this area.Aim: The aim of this study was to examine the influence of supplier integration on supply chain performance in South African SMEs.Setting: This study was conducted in Gauteng province of South Africa.Methods: A quantitative research methodology was employed in this study. A convenient sample comprising 283 owners and managers from SMEs drawn from the Gauteng Province was used in the study. The collected data were then analysed using Pearson’s correlation and regression analysis.Results: Positive correlations were found between supplier integration and both the tangible and intangible sub-dimensions of supply chain performance. Supplier integration also predicted both the tangible and intangible sub-dimensions of supply chain performance.Conclusion: These results imply that to improve the performance of their supply chains, it is imperative for SMEs to ensure that linkages with their suppliers are properly aligned for improved coordination, which leads to better relationships and supply of materials. This study contributes to the literature by proposing and testing the influence of supplier integration on supply chain performance.