Linking supply chain risk management to financial performance of SMEs: can supply chain collaboration moderate?

While supply chain risk management is widely recognised for mitigating disruptions and enhancing operational efficiency, its impact on the financial performance of manufacturing small and medium-sized enterprises remains underexplored, particularly when considering the moderating effect of supply chain collaboration. Based on the resource-based view and relational view, this study analysed the relationship between supply chain risk management and the financial performance of manufacturing small and medium enterprises. The moderating effect of supply chain collaboration was also investigated. The study used a cross-sectional design and data were collected from 162 manufacturing small and medium-sized enterprises in Dar es Salaam, Tanzania. A partial least squares structural equation modeling was employed to analyse the effect of supply chain risk management on financial performance and the moderating effect of supply chain collaboration. The findings unveil that supply chain risk management positively and significantly affects financial performance. Initially, this study hypothesised that supply chain collaboration significantly strengthens the effect of supply chain risk management in achieving manufacturing small and medium enterprises’ financial performance. Despite the fact that the study’s findings show that supply chain collaboration does not significantly moderate the relationship between supply chain risk management and financial performance, supply chain collaboration has a positive direct effect on financial performance. Thus, small and medium-sized enterprises should implement supply chain risk management and supply chain collaboration practices as they have positive impact on financial performance. While there may not be a significant interaction effect, the financial performance can still be enhanced by utilising each practice independently.