Participation in supply chains and the performance of SMEs in mining industry in Mpumalanga, South Africa

Abstract

The participation of Small and Medium businesses (henceforth SMEs) in the supply chains in the mining industry has received less attention in research work for a long time in South Africa. There are challenges faced by many SMEs venturing into business through participating in the supply chains in the mining industry. The overarching objective of this study was to investigate the key factors that influence the participation of SMEs and performance in the supply chains in the mining industry in Mpumalanga, South Africa. The research was anchored on the resource-view based (RBV) and the theory of planned behaviour (TPB) as applied in supply chain management and entrepreneurship. A quantitative approach involving a cross-sectional technique was applied. The data was collected using the online software known as Qualtrics. The SmartPLS, version 3.0 Software was utilized to analyse the data using the partial least squares structural equation modelling (PLS-SEM model). The results showed that technology, human capital (skills) and human capital (lack of experience) are key barriers and with insignificant effects. Financial constraints and economies of scale were found to be the major non-barriers but also have insignificant effects. The results show that SMEs’ participation in supply chains as a strategy positively influences business performance in the mining industry. This study contributes to the body of knowledge on supply chain management and entrepreneurship. Owners and managers of SMEs will find useful data and analysis presented in this research on the key barriers and pragmatic strategies on how to overcome them. The effective strategies that enhance business performance in Mpumalanga, South Africa are presented. Policy-makers are urged to curtail barriers and create better business environments for SMEs that are engines of economic development.