Integrating Buyer-Supplier Relationship to an Inter-Organizational System for Strengthening SCM Practices across SMEs

Firms can no longer effectively compete in isolation of their suppliers and other entities in the supply chain. As organizations seek to develop partnerships and more effective information links with trading partners, internal processes become interlinked and span the traditional boundaries of firms. The SMEs’ view of SCM seems to be the exertion of power by customers and consequently is seen by SMEs’ as a one-way process. Similarly, SMEs’ do not employ SCM; rather they are managed at arm's length by large customers. The choice of organization's environment is a driver to SME organization's growth. SMEs’ grow by pursuing a differentiated strategy and progressing through discrete stages of growth and consequently the ability of the entrepreneur to make structural and strategic changes may determine the growth prospects of business. However, supply chain integration is essential for sustainability in any organization which accounts for all activities within an organization and the activities of its suppliers, customers and other supply chain members, to be integrated together. Supply chain integration links a firm with its customers, suppliers and other channel members by integrating their relationships, activities, functions, processes and locations. Having an integrated supply chain provides significant competitive advantage including the ability to outperform rivals on both price and delivery. Supply chain integration includes two stages: internal integration between functions and external integration with trading partners. The objective of this paper is to find out the impact of environmental conditions of the organization on the Supply Chain Management Practices of the firm especially SMEs. The sample frame for this paper has been SMEs of Jammu District in J&K State.