Humanities & Social Sciences Reviews eISSN: 2395-6518, Vol 7, No 3, 2019, pp 728-735 https://doi.org/10.18510/hssr.2019.73104 728 |www.hssr.in © Chetthamrongchai and Jermsittiparsert THE MEDIATING ROLE OF SUPPLY CHAIN MANAGEMENT PRACTICES IN THE RELATIONSHIP BETWEEN MANUFACTURING FLEXIBILITY AND MANUFACTURING PERFORMANCE Paitoon Chetthamrongchai 1 , Kittisak Jermsittiparsert 2 1 Faculty of Business Administration, Kasetsart University, Bangkok, Thailand, 2 Department for Management of Science and Technology Development, Ton Duc Thang University, Ho Chi Minh City, Vietnam ; Faculty of Social Sciences and Humanities, Ton Duc Thang University, Ho Chi Minh City, Vietnam. Email: 1 fbusptc@ku.ac.th, 2 kittisak.jermsittiparsert@tdtu.edu.vn Article History: Received on 25 th February 2019, Revised on 28 th April 2019, Published on 25 th August 2019 Abstract Purpose: The current study is interested in exploring the nexus between manufacturing flexibility supply chain practices and manufacturing performance of Indonesian manufacturing firms. Multidimensionality of manufacturing flexibility within the function of manufacturing is generally accepted by past researchers and its importance honoured. Methodology: Employing the survey-based methodology, the SEM-PLS technique is used to test the hypothesized relationships. So, the current study has used SEM-PLS as a statistical tool to answer the research questions raised in this study and research objectives envisaged in the current study. Results: The complexity of manufacturing flexibility has made this concept difficult to comprehend yet delimit. To date, agreement on how to practice this concept has not yet been resolved. The findings of the study have provided support to the theoretical foundation and proposed hypothesis of the current study. Current study will be helpful for policymakers and practitioners in understanding the issues related to supply chain risk, supply chain integration and supply chain agility. In the author's knowledge this is among very few pioneering studies on this issue. Keywords: supply chain, flexibility manufacturing performance, Indonesia INTRODUCTION In modern day, rapidly evolving business environments that are full of changes and uncertainty led to the need for flexibility. The increase of customers' expectations on the speed to fulfil their requirements have forced many organizations to act and respond faster, and to be more flexible to changes (Agus, 2011). Traditional manufacturing approaches are no longer sufficient for a firm to secure competitive advantage in this drastically changing environment (González-Benito, 2007; Nxumalo and Naidoo, 2018; Obeid and Awad, 2018) . Concurrently, rapid changes in the world's technology has shortened the life cycle of the product; with customer demand for more innovative products with higher value, creating a flexible organization becomes essential to cope for rapid changes (Judi and Beach, 2008); Decreasing of profit margins, increasing inventory levels to cope with uncertainty, increasing global competition, and increasing the speed of technological changes (Judi and Beach, 2008) have further amplified the need for flexibility. As a result, organizations must find better ways to meet these challenges. Since manufacturing flexibility enhances the ability of a firm to respond to customer needs that are highly diversified, it is generally accepted that incorporating manufacturing flexibility within the manufacturing function will help the organization to respond to such changes and customer needs in a faster and better way (Kaur and Singh, 2016). Many organizations tend to solve problems using conventional way, where internal factors that are within the organization are focused even though the problems may be caused by external factors. However, negligence of external factors such as suppliers, distributors, and customers did affect an organization’s ability to fulfil customer expectations and their survivability in uncertainty (Jabbour et al., 2017). Various manufacturing practices such as lean manufacturing, world class manufacturing, knowledge management, organization learning, total quality management (TQM), quick response program (QRM), efficient consumer response (ECR), systems dynamics, business process re-engineering, mass customization, manufacturing flexibility, total productive maintenance and benchmarking of best practices are proposed to help the organizations in enhancing their performance especially the manufacturing functions (Shibin et al., 2017; Obi and Okekeokosisi, 2018; Obiero, 2018). With respect to the production system, due to lacking of understanding of the synergy within the manufacturing system, many firms have implemented the manufacturing flexibility in an incomplete way. Loss of the synergistic benefits have made the implementation of manufacturing flexibility being considered as a fail subject, as performance does not improve as expected (Dubey et al., 2017). Manufacturing flexibility can provide an organization the ability to handle the rapidly changing business conditions with more dynamic options and act more effectively to dynamic competitive business environment. As flexibility becomes important and its potentials are recognized by managers 3 around the world, it has been proclaimed as the ―next competitive battle‖ to improve organizations survivability in this ever changi ng yet volatile business environment (Dubey et al., 2017). Impacts of flexibility in the value chain are substantial in many areas including development of new products, manufacturing systems, and logistics. For example, flexibility allowed a firm to improve performance by reducing