Linking Supply Chain Practices to Performance and Sustainability: The Mediating Role of Operational Efficiency among Ethnic Minority Micro-Enterprises in Bangladesh

Abstract

Ethnic micro-enterprises often operate with limited formal support, scarce resources, and locally embedded exchange relationships, yet little is known about how their supply chain practices translate into enterprise outcomes. This study examines the relationships of supply chain practices with operational efficiency, business performance, and business sustainability among ethnic micro-enterprises in Bangladesh, and tests the mediating role of operational efficiency. Using a positivist, deductive, cross-sectional design, survey data from 330 owner-managers and knowledgeable enterprise representatives were analyzed through partial least squares structural equation modelling. The findings show positive relationships between supply chain practices and all three outcomes. The strongest direct relationship concerns operational efficiency, followed by business sustainability, while the relationship with business performance is comparatively smaller. Operational efficiency also mediates the relationships of supply chain practices with business performance and business sustainability, supporting all proposed hypotheses. The study advances supply chain and capability-based research by showing that coordinated sourcing, information exchange, inventory discipline, and fulfilment routines do not create uniform value across outcomes. Their contribution depends partly on whether they are converted into efficient day-to-day execution. The findings also distinguish immediate business performance from the enterprise's longer-term capacity to remain viable and use resources responsibly. For managers and enterprise-support institutions, the evidence indicates that supply chain assistance should combine relationship coordination with practical improvements in inventory control, information flow, delivery reliability, and resource use. Because the analysis relies on cross-sectional perceptual data, the findings indicate association rather than causation.