Supply chain management constraints in Tanzanian small and medium enterprises

Abstract

Supply chain management (SCM) has gained popularity around the globe due to its significance in relation to improving business performance. Although large enterprises have been able to successfully implement SCM, it is different in small and medium enterprises (SMEs) as they are faced with several constraints that hinder the effective implementation of SCM. Variables such as technological difficulties, poor coordination with the supplier’s lack of government support, resources, funds, access to markets and top management support, issues in information sharing, inventory management, poor SCM knowledge and unskilled workforce all affect the SCM implementation in SMEs. These variables were measured in this study. A mixed method approach was used in this study where content analysis was employed through carrying out an extensive literature review to identify the SCM constraints. Descriptive statistics were then used to justify the relationship between SCM impediments and effective SCM implementation in Tanzanian SMEs. Frequency and percentages were computed to obtain the study results. The findings reveal that there is a significant relationship between effective SCM implementation in Tanzanian SMEs and constraints such as technological difficulties, poor coordination with suppliers, a lack of support from the top management and insufficient funds. This indicates that Tanzanian SMEs are mostly constrained by technological difficulties, poor coordination with their suppliers, a lack of support from top management and insufficient funds. The results also revealed that information sharing, inventory management, a lack of access to markets and poor SCM knowledge were insignificant constraints affecting SCM implementation in Tanzanian SMEs, thus indicating that there are no significant relationships between these constraints and SCM implementation in Tanzanian SMEs. The study recommends that support from the government in terms of financial assistance could help the SMEs to overcome the financial constraints and to invest more in recent technologies to help effectively implement SCM. Training from SME governing bodies such as the Small Industry Development Organisation (SIDO) in Tanzania could help to increase awareness of the importance of SCM. Furthermore, forming and maintaining long-term relationships with suppliers is critical for effective SCM implementation. Key words: Supply chain management, Small and medium enterprises, firm performance, Tanzania.

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