Small business and supply chain management: is there a fit?

Conflict exists over how supply chain management (SCM) affects small- and medium-sized enterprises (SMEs). On one hand, SCM can provide quality, cost, customer service, leverage and even risk reduction benefits for the SME. On the other hand, SCM exposes the SME to greater management and control hazards while reducing its private differentiation advantages. We test hypotheses relevant to the performance effects of SCM on SMEs using data collected from a recent survey of senior production managers. We find that SCM is negatively associated with SME performance after controlling for self-selection bias. We discuss several explanations for the result.