The Effect of Supply Chain Management on Company Performance in the Small-Medium Bakery Industry in Padang

Oktavio, Kelvin (2023) The Effect of Supply Chain Management on Company Performance in the Small-Medium Bakery Industry in Padang. Diploma thesis, Universitas Andalas.

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Abstract

The Small and Medium-sized Enterprises (SMEs) sector plays an important role in Indonesia’s developing economic sectors. One of the small and medium enterprises types is the food industry. The food industry is an industrial sector that can survive economic shocks because each year, the demand for food rises along with the increase in population growth. The importance of all parties, from suppliers, manufacturers, distributors, retailers, and customers to involve in the process from production to distribution of products to end consumers, that give an idea of Supply Chain Management (SCM). Supply Chain Management (SCM) needs to be considered by the company to increase its company performance since competition is no longer between companies but among supply chains. This research aims to understand and analyze how is the effect of Supply Chain Management (SCM) on company performance in SMEs of bakery industry in Padang. Supply Chain Management is measured by 3 variables: Strategic Supplier Partnership, Customer Relationship, and Information Sharing. While the company performance is measured by 2 variables: financial performance and operational performance. The population in this research is small and medium-sized bakery industries registered at the Dinas Tenaga Kerja dan Perindustrian Padang with a total of 86 SMEs. Data collection is carried out by distributing questionnaires to respondents by conducting a census of the population and gaining a total 30 of bakery SME questionnaires back. This research used Structural Equation Modeling (SEM) method with the help of Partial Least Square (PLS) software in data processing to test the hypothesis. The findings of the research provide a striking demonstration of the importance of SCM in enhancing the company performance of the small-medium bakery industry in Padang. The empirical result indicates that in order to increase company performance, the company should emphasize greater attention on the supply chain management implementation because those aspects of SCM have been proven to affect toward degree of company performance, both financial and operational performance.

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