Effect of Supply Chain Management Practices and SMEs Performance: Moderating Role of Information Technology Capability

Abstract

Small and Medium Enterprises’ (SMEs) Performance has emerged as a significant subject of discourse in today’s global business environment. This is because some SMEs fail within their first five years of existence while some go into extinction between their sixth and the tenth year. Only a portion scales through, flourishes and grows to maturity. This study examined the effects of supply chain management practices (SCMP) on SMEs performance in Kaduna State, and the moderating influence of IT capability. The study adopted a survey research design and took a quantitative approach. The study population consists of 539 manufacturing SMEs in Kaduna State. A sample size of 223 was arrived at utilising Dillman et al’s. (2014) sampling formula. In order to decrease sampling error, the sample size was increased by 30% to 289. A self-administered structured questionnaire was used to solicit responses from respondents. Data was analysed using PLS-SEM version 3.0. The study found that Lean Practice has positive and significant relationship with SMEs Performance while Quality of Information Sharing has positive and insignificant relationship on the performance of SMEs. The interaction between Information Technology Capability, Quality of Information Sharing and SMEs Performance was significant while with Lean Practice it is positive and not significant. The study recommends that Government and Stakeholders should direct their effort to selecting the right capabilities to enhance performance of SMEs.