Adoption of SCM innovations by SMEs is a key critical issue addressed by this study. The study used an explorative study in measuring to which extent Tanzanian SMEs adopt SCM practices and whether there is a trend towards increased adoption of these practices over time. In doing so, test propositions on the differences between manufacturing firms, and between medium-sized and small enterprises were done. Furthermore, the motives of SMEs to engage in SCM innovations and perceived management challenges are explored. From analysis of our findings, we conclude that, SMEs still lag behind larger firms in utilizing the benefits of SCM practices. SMEs still face obstacles like knowledge, financial resources, technology and the like. Lack of trust between small firms has been identified as a major non-financial obstacle to information sharing and integration with other suppliers in the chain.