Impact of Social Media Usage on Supplier-Customer Relationship Management: Case on Manufacturing and Service SMEs

Abstract

Digital products have placed as a competitive advantage for business actors both individuals, companies, and industries recently. Social media such as Facebook, Instagram, YouTube, which are accessible from various communication media such as smartphones, tablets, or laptops have become inseparable media from user's handholds in order to share information, offer products and services, and make friends. In an effort to establish good relationships between companies and suppliers (Supplier Relationship Management/SRM) and between companies and consumers (Customer Relationship Management/CRM), hence optimizing the use of social media for companies becomes very important, no exception for small and medium-sized enterprises (SMEs). This study aims to examine the role of social media to assist SMEs in establishing good relationships with their suppliers and customers. There are around 200-250 manufacturing and service SMEs domiciled in Central Java province were involved. The data collection method was carried out through surveys guided by questionnaires and interviews with SME owners. Quantitative data analysis was conducted using Structural Equation Modelling. It is hoped that the resulting findings will prove the significant role of social media in helping SMEs to establish good relationships with suppliers (SRM) and customers (CRM), and it is believed to be useful both theoretically and practically.