Supply Chain Collaboration, Digital Readiness, and SME Performance: Evidence from Batik SMEs in Indonesia

Supply Chain Collaboration (SCC) and Digital Readiness (DR) are important capabilities for SME performance, particularly in traditional industries facing digital and market transformation. However, their relative contributions to SME performance remain insufficiently understood. This study examines the relationships between SCC, DR, and the performance of batik SMEs in Kulon Progo Regency, Indonesia, using the Resource-Based View (RBV). A quantitative cross-sectional survey was conducted among 40 batik SMEs selected through census sampling. Data were collected using a five-point Likert-scale questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). SCC showed a positive and statistically significant relationship with SME performance, whereas DR showed a positive but statistically non-significant relationship. The model yielded an R² of 0.923, indicating substantial explanatory power within the observed sample, without implying causal determination. The findings indicate that SCC has a more prominent direct association with batik SME performance than DR in the studied context. The study extends the RBV by demonstrating that organizational capabilities may differ in their performance relevance. Practically, SMEs should strengthen supply chain relationships while developing digital capabilities. Future research should examine actual digital utilization, capability deployment, and complementary mechanisms.