EXPLORING SUPPLY CHAIN INTEGRATION AND CAPABILITIES: A PATHWAY TO BETTER OPERATIONAL PERFORMANCE IN SMES

Abstract

The competitive market now requires companies to operate as interconnected network members across extensive supply systems. This study investigates the impact of supply chain integration (supplier, internal, and customer) on operational performance, with supply chain capabilities serving as a mediating factor. The research investigates business production operations located in both Hyderabad and Kotri industrial zones of Sindh Pakistan. A total of 123 employees who work in SMEs participated in the research using stratified random sampling techniques. The researchers utilized Partial Least Squares Structural Equation Modeling as their analysis method. Supply chain integration proves to produce substantial positive impacts on operational performance based on research findings. Supply chain capabilities serve as important mediators because they enhance this relationship by demonstrating their critical role in achieving better performance results. Operation efficiency in the Small and Medium Enterprise sector can be increased through more integrated supply chain management combined with supply chain capability exploitation.

Keywords: Supply chain Integration, Capabilities, Operational Performance, SMEs, Sindh, Pakistan