Antecedents and enablers of supply chain value creation : an analysis of trust and competences

Abstract

The study investigated how small and medium enterprises (SMEs) create value in local supply chains. Specifically, the study focused on two initiators of value creation: entrepreneurial competences and supply chain trust. The authors analyse a cross-sectional survey of 294 SMEs in Uganda operating in the construction, furniture and fitting, food processing and agricultural sectors to test a number of hypotheses, using factor analysis and structural equation modelling. Results show that building value-driven supply chains requires SME owner-managers to build an optimal level of trust. Although trust is identified as a key factor in facilitating trade within local communities, different entrepreneurs’ perspectives alter how SME-owner managers assess trusted partners, determining different strategies and behaviours in building trust in customer, as opposed to suppliers’ relationships. In addition, findings show how operational cost is not a key value driver, indicating why SME-owners managers should instead focus on building trust.