Role of supply chain management in improving competitive advantage of Indonesian small and medium enterprises

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Global competition has forced companies, including small and medium enterprises (SMEs), to improve their competitive advantage. Supply chain management practices are the ways to improve the competitive advantage, particularly in the global competition context. However, there is still doubt SMEs can compete globally, considering they face limited resources, skilled workforce, and business networks. Therefore, this study aims to examine the influence of supply chain management practices, covering cross-functional integration, partnership, responsiveness, and resilience. Moreover, this study has examined which practices dominate in improving competitive advantage. The quantitative study involved 445 SMEs located in East Java, Indonesia. The respondents are supervisors or higher levels and work in departments related to supply chain management, as they can provide the relevant information and possess complete knowledge of management practices. The data were collected via a questionnaire designed with a five-point Likert scale. The responses were analyzed using SmartPLS software 4.0. The results show that cross-function integration improves supply chain partnership, responsiveness, and resilience (β = 0.705, 0.382, 0.324; t-value = 25.177, 6.697, 5.783). Supply chain partnerships affect supply chain responsiveness, resilience, and competitive advantage (β = 0.327, 0.257, 0.249; t-value = 5.933, 4.536, 5.651). Moreover, supply chain responsiveness improves supply chain resilience and competitive advantage (β = 0.285, 0.106; t-value = 5.690, 2.099). Supply chain resilience improves competitive advantage (β = 0.435 and t-value = 8.987). SMEs can enhance their competitive advantage by integrating their internal cross-functional integration and adopting supply chain partnership, responsiveness, and resilience.

Acknowledgments
The authors would like to thank DIKTI 2023 and Research and Community Outreach Petra Christian University for providing the grant to fund this research.

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    • Figure 1. Research model
    • Table 1. Respondents’ profile
    • Table 2. Goodness of fit
    • Table 3. Discriminant validity
    • Table 4. Hypotheses testing
    • Conceptualization
      Hotlan Siagian, Zeplin Jiwa Husada Tarigan, Maya Novitasari
    • Formal Analysis
      Hotlan Siagian, Sautma Ronni Basana, Zeplin Jiwa Husada Tarigan
    • Investigation
      Hotlan Siagian, Sautma Ronni Basana
    • Methodology
      Hotlan Siagian, Zeplin Jiwa Husada Tarigan
    • Project administration
      Hotlan Siagian, Ferry Jie
    • Resources
      Hotlan Siagian, Zeplin Jiwa Husada Tarigan
    • Supervision
      Hotlan Siagian, Sautma Ronni Basana, Zeplin Jiwa Husada Tarigan, Ferry Jie
    • Writing – original draft
      Hotlan Siagian, Zeplin Jiwa Husada Tarigan, Maya Novitasari, Ferry Jie
    • Data curation
      Sautma Ronni Basana, Zeplin Jiwa Husada Tarigan, Maya Novitasari
    • Funding acquisition
      Sautma Ronni Basana, Zeplin Jiwa Husada Tarigan
    • Writing – review & editing
      Sautma Ronni Basana, Zeplin Jiwa Husada Tarigan, Maya Novitasari, Ferry Jie
    • Software
      Zeplin Jiwa Husada Tarigan, Ferry Jie
    • Validation
      Zeplin Jiwa Husada Tarigan, Maya Novitasari, Ferry Jie
    • Visualization
      Maya Novitasari, Ferry Jie