The Impact of Sustainable Supply Chain Management on Competitive Advantage: A Study of Manufacturing Firms in Mekelle City

Abstract

In recent years, sustainable supply chain management has become a central focus on global business strategy derived by increasing environmental concerns, resource scarcity, regulatory pressure, and changing consumer preference towards eco-friendly products. For manufacturing firm’s sustainability is not only about compliance but also a way of achieving long-term competitive abilities through efficiency, optimal utilization of resources, cost minimization and market differentiation. In emerging economies, like in Ethiopia, particularly in Mekelle city, manufacturing firms face multiple challenges, such as resource constraints, limited reverse logistics infrastructure and limited adoption of sustainability practices. Despite these challenges SSCM offers opportunities for firm strengthen operational performance, enhance customer loyalty and build sustainable competitive advantage through integrating the practices such as SRM, green manufacturing, CRM and reverse logistics. The study was conducted to evaluate “the impact of sustainable supply chain management practice on competitive advantage,” a study of manufacturing firms in Mekelle city. Data were collected from 73 respondents across 3 manufacturing firms representing the sectors such as construction materials and soft drink industries. A quantitative research design was employed, using purposive sampling and structured questionnaires. Descriptive and Spearman correlation analyses with SPSS version 21 were used for analysis. The findings revealed that green manufacturing at (r = 0.373, p < 0.01), customer relationship management at (r = 0.413, p < 0.01), and reverse logistics at (r = 0.411, p < 0.01) significantly and positively influenced competitive advantage, though supplier relationship management at (r = 0.124, p > 0.05) did not. The study concluded that sustainable supply chain management practices, particularly green manufacturing, CRM, and reverse logistics, significantly enhance the competitive advantage of manufacturing firms in Mekelle. Despite the observed challenges, such as underdeveloped reverse logistics and limited use of renewable sources of energy, the firms demonstrate a commendable foundation in sustainability. Enhancing these areas through strategic integration and innovation will support the firms to maintain environmental regulations compliance and enable to gain long-term operational efficiency, customer loyalty, and market differentiation.