TTHE FACTORS INFLUENCING SUPPLY CHAIN DISRUPTIONS ON SUPPLY CHAIN PERFORMANCE IN SMALL AND MEDIUM ENTERPRISES

Abstract

In recent years, supply chain has become more complex due to globalization, outsourcing, single sourcing, and the focus on removing slack from supply chains. While these strategies have improved performance, they also made supply chains more prone to disruptions. A major disruption in the supply chain can disturb or even “shut down” a company and have critical consequences on profitability. Small and medium enterprises (SMEs) however didn’t fully implement supply chain management (SCM) and this will lead to inefficiency of disruption management. The research focused on SMEs to determine whether factors of disruption affect its supply chain activities. The factors enlisted are shortage of supply (Larrson, 2008), equipment failure (Kliendorfer and Saad, 2005) and lack of buying power (Asfaha, 2008). Questionnaires were distributed to collect respondents’ answers. The data collected were analyzed quantitatively. Equipment failure was found to have strong impact to the supply chain performance than shortage of supply and buying power based on strong relationship between it and performance of supply chain. Buying power has the weakest relationship with the performance of supply chain, concluding that it contributes less in the performance. In a nutshell, SMEs can build a stronger supply chain resilience and protection to its network by understanding the cause and effect of the disruptions in their supply chain.