ENHANCING SME BUSINESS SUSTAINABILITY THROUGH EFFICIENT SUPPLY CHAIN MANAGEMENT: A FOCUS ON SUSTAINABLE PRACTICES IN EMERGING MARKETS

Abstract

Despite the increasing rate of digital technologies in transforming supply chain activities in the dynamic business environment today, small and medium-sized enterprises (SMEs) in emerging markets remain behind the expected standard in using digital technologies, a factor that negatively affects their sustainability and efficiency in their supply chain management practices. This technological disparity is a major threat to the long-term business sustainability and competitiveness of SMEs, especially with the changing market requirements and the growing sustainability pressures. Therefore, this study examined the influence of efficient supply chain management, sustainable supply chain practices, and digital technologies on the sustainability and operational efficiency of small and medium-sized enterprises (SMEs) in emerging markets. A cross-sectional survey design was adopted, using quantitative approaches. Data were collected from 340 SME owners and managers in Lagos State (Southwest) and Kwara State (North-Central), Nigeria, using purposive sampling technique. The data were analysis using descriptive statistics and Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings revealed that supply chain management practices inventory management, supplier collaboration, and logistic efficiency significantly influence SME business sustainability, explaining 59.3% of its variance (R² = 0.593). Among these, inventory management has the strongest effect (β = 0.594), followed by supplier collaboration (β = 0.204) and logistic efficiency (β = 0.112). Sustainable supply chain practices environmental initiatives, green procurement, and waste management explain 91.2% of the variance in operational efficiency (R² = 0.912), with green procurement (β = 0.442) and environmental initiatives (β = 0.414) showing strong positive effects, while waste reduction is not significant. Digital technologies and innovations IoT, artificial intelligence (AI), and innovation explain 78.8% of the variance in sustainable supply chain management implementation (R² = 0.788). The study concluded that integrating efficient supply chain practices, sustainable initiatives, and digital technologies significantly enhances SME sustainability and operational performance in emerging markets. It recommends investment in inventory systems, strengthening supplier collaboration, adoption of green procurement, and leveraging IoT and AI to optimize supply chain operations.