<![CDATA[Relationships with suppliers are often assumed to automatically improve business performance, yet for café SMEs with limited bargaining power, this assumption deserves closer examination. This study traces how supply chain capabilities bridge supplier integration and internal integration with operational performance, involving 200 café supply chain actors in the Special Region of Yogyakarta (DIY), each represented by one key informant, and draws on Dynamic Capabilities Theory as its conceptual foundation. Respondents were employees, managers, and owners directly involved in supply chain activities, selected through purposive sampling. The findings show that supplier integration on its own is not enough to drive operational performance directly; its influence only becomes apparent once channeled through the supply chain capabilities a café has built. Internal integration tells a different story, shaping operational performance both directly and by strengthening supply chain capabilities. Among the factors examined, supply chain capabilities emerge as the strongest driver of operational performance. These findings offer empirical evidence that, in small service businesses such as cafés, supply chain advantage depends less on closeness to suppliers and more on a firm's internal capacity to manage and adapt the resources it has available.]]>
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