The influence of supply chain management (SCM) practices on small and medium manufacturing enterprises (SMES) performance in Ghana

Abstract

Supply chain management practices play a crucial role in determining the performance and competitiveness of small and medium-sized enterprises, as they do in businesses around the world. Effective SCM can help SMEs all over the world to enhance their competitiveness, reduce costs, improve product quality, and increase customer satisfaction. SMEs have been highlighted as a significant source of employment on a global scale. Due to their substantial contribution to the GDP of any nation, SMEs can also act as a catalyst for economic change. For every nation seeking change, poverty reduction, employment redistribution, company development, and robust economic growth, SMEs have been identified as essential resources. Several countries around the world have a significant number of SMEs and have fostered environments that encourage entrepreneurship and SME growth. However, numerous unique challenges and opportunities exist for SMEs to consider when implementing SCM practices. The manufacturing growth attributable to SMEs in these countries has strengthened, suggesting any anticipated industrial production decline on a worldwide scale may be tempered by their contribution. This proves, beyond a shadow of a doubt that manufacturing SMEs play a crucial role in every nation, and perhaps more so in emerging nations, such as Ghana. SMEs comprise more than 90 percent of formal businesses, operate in almost every industrial area of the economy, and are responsible for more than 50 percent of employment and GDP. Manufacturing SMEs are, nonetheless, faced with a number of difficulties, which have basically influenced their growth and development, resulting in numerous SMEs compelled to close down in the recent past. The ability to overcome these barriers are among the critical SME success factors. Elements that contribute to manufacturing SME success in becoming established have been extensively researched with a variety of variables identified. Furthermore, while extensive research on SCM has been undertaken, gaps remain in the area of how best practices in the field impacts the work of manufacturing enterprises on a micro, small and medium scale. Therefore, research on how SCM practices affect SME performance is crucial, with the ability to advance the existing state of manufacturing SMEs in Ghana. The manufacturing SMEs in eight southern areas of Ghana are specifically mentioned in this study. In order to offer a prototype model for enhancing the performance of SMEs, the study set out to determine the essential aspects affecting SCM practices on SCM performance across Ghanaian manufacturing SMEs. The high failure rate currently observed in the manufacturing sector, linked to a number of important obstacles manufacturing SMEs face in Ghana, serves as justification for the study. The study was conducted within the southern regions of Ghana, employing a mixed research method. The population of the study consisted of 363 manufacturing SME leaders, owners and managers. A non-probability, convenience, and purposive sampling technique was adopted, while a closed and opened-ended questionnaire was used as primary data collection tool. Inferential and descriptive statistical analysis of the data was undertaken using the SPSS (v 27.0) computer package. According to the study findings, numerous issues seriously affect manufacturing SMEs, and they must overcome sizable obstacles that have a detrimental impact on their productivity. These have an impact on SME capacity to implement elements to encourage, support, and sustain the expansion of their business. It was found financial access is one of the main elements that positively contribute to sustainability, growth, and performance, while infrastructure, technological progress, market accessibility, and competitiveness, in addition to education and training, were also mentioned as important drivers of firm success. Improved comprehension of SCM techniques and their theoretical and practical consequences for manufacturing SMEs is offered by the study, which aims to also offer critical insights to this understanding. Additionally, it offers a wide range of suggestions and proposes a conceptual framework for those elements’ corporate executives, public servants, and policy makers can understand, in order to assist the manufacturing sector, manage its current problems. The study seeks to contribute to both theoretical and practical enhancement of knowledge on SCM practices that influence performance of manufacturing SMEs.