Logistic Capability and Total Quality Management Practice on SME’s Performance

Yakuttinah Marjan, Uswatun Hasanah, Yurilla Endah Muliatie, Indrianawati Usman

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: This study aims to analyze and prove the effect of logistic capability and Total Quality Management practices on Micro, Small and Medium Enterprises (SME) performance directly or mediated by non-financial performance. Research design, data and methodology: This study tested the hypothesis using Hierarchical multiple regression analysis, the method of data collection in this study was using questionnaire, the sampling technique was purposive sampling technique, with SME that has been established for more than 5 years and manufacturing. The data analyzed were 180 respondents using SPSS 25. Results: The findings showed that logistic capability has direct and indirect effects on SME financial performance and has a positive effect on SME financial performance mediated by non-financial performance. While the total quality management practices have a positive effect on SME financial performance mediated by non-financial performance. Thus, companies can achieve maximum financial performance if they invest in developing employee knowledge and concerning on non-financial actions, such as employee satisfaction, innovation and proactively seeking market opportunities. Conclusions: In conclusion, one of the main factors that companies need to consider to improve financial performance is non-financial performance in mediating the effect of logistic capability and TQM practices on the financial performance of SMEs.

Original languageEnglish
Pages (from-to)97-105
Number of pages9
JournalJournal of Distribution Science
Volume20
Issue number7
DOIs
Publication statusPublished - 2022

Keywords

  • Distribution
  • Financial Performance
  • Logistic Capability
  • Non-financial Performance
  • SME
  • TQM Practices

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