It has been largely expressed in the operations and supply chain management literature that supply management is a significant business performance enhancer. Though capabilities are perceived to underlie operational excellence, not much is known about the capabilities in supply management necessary to support operations performance. Besides, the majority of the supply-management-related studies are large-firm-oriented to the neglect of small and medium sized enterprises (SMEs). In view of this, the present study attempts to explore the constitution of supply management capabilities in the context of SMEs and determine how these capabilities might influence the operations performance of firms.
The dynamic capabilities view, together with the relational view of the firm, formed the basis for the theoretical framework of the study. A critical realist philosophical stance informed the mixed methodology approach adopted for the study. Using a sequential mixed-methods strategy, an initial exploratory qualitative study was complemented with a large scale quantitative study to arrive at findings. The qualitative component involved interviews in 15 manufacturing SMEs located in the Yorkshire region of the United Kingdom (UK). In the quantitative component, a total of 132 cases of valid survey responses were used in the analysis. The survey respondents included owner-managers and senior managers of manufacturing SMEs in different industrial sectors, spread across the UK. The analyses operationalised the supply management capabilities construct. It further explored the inter-relationships among three research constructs, namely, firm attributes, supply management capabilities and operations performance.
Firm attributes were measured by the dimensions, firm age, firm size (turnover), ownership involvement and dedicated supply function. The dimensions measuring supply management capabilities were: long-term collaborative supplier orientation; open communication between exchange partners; close working relationship with limited number of suppliers; integration between supply strategy and corporate strategic objectives; application of information technology in supply management; and highly skilled and empowered purchasing staff. Operations performance was measured by five dimensions. These dimensions were, quality, cost, speed, flexibility and dependability.
UK manufacturing SMEs’ capabilities in supply management were found to be largely demonstrated in: long-term collaborative supplier orientations, open communication between exchange partners, and close working relationship with limited number of suppliers. The adoption of supply management thinking by senior managers was found to underlie the significant presence of supply management capabilities in a firm. Some statistically significant relationships were established among the research constructs via multiple regression analysis. Between firm attributes and supply management capabilities, only having a “dedicated supply function” as a firm attribute was found to make unique statistically significant contribution to supply management capabilities. Having a “dedicated supply function” was found to be statistically influential on all the dimensions of supply management capabilities except ‘application of information technology in supply management’.
Regarding the relationship between supply management capabilities and operations performance, “open communication between exchange partners”, “integration between supply strategy and corporate strategic objectives” and “highly skilled and empowered purchasing staff” were found to make statistically significant contributions to the “quality”, “flexibility”, “dependability” and “speed” dimensions of operations performance. “Open communication between exchange partners” and “integration between supply strategy and corporate strategic objectives” made unique statistically significant contribution to “speed” and “flexibility” respectively. “Highly skilled and empowered purchasing staff” on the other hand, made statistically significant contribution both the “quality” and “speed” dimensions. Based on these findings, practical research implications have been made and research contributions highlighted. Finally, limitations of the study are acknowledged and directions for future research have been proposed.
