Strengthening Supply Chain Management Practices in SME through Organizational Infrastructural Support

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, in SMEs’ the use and choice of technology is constrained by the entrepreneur's past experience and does not appear to be an active decision variable. Superior competitive strategies are essential if the SME is to achieve not only absolute growth rates but also growth relative to competitors and the market. This paper is one of the first attempts to study the Supply Chain Practices of Small and Medium Enterprises. The objective of this paper is to find out the impact of technical ambiguity on the Supply Chain Management Practices of the firm dealing with ago based products. The sample frame is SMEs of Jammu District in J&K State. Random samples of 323 respondents were selected from the said SMEs. The respondents were administered a structured questionnaire containing scales to measure the technical uncertainty and supply chain management practices of firms. After the data were collected, the scales were purified and exposed to EFA for assessing construct dimensionality. Thereafter, unidimentionality of the underlying latent constructs was examined using CFA. Due to the robustness and flexibility of the Structural Equation Modeling (SEM) in establishing CFA, this paper uses SEM to test both first-order as well as second-order CFA models.