Business organisations have been persistently exerting the efforts to find out the fundamental factors responsible for the performance nourish the organisational capability building from long before. (Bowersox and Closs, 1996) classify performance measurement into five broad categories viz. cost, customer value and service, asset management, quality and productivity. Organizational Capability connote the ability of an organization to reinforce, boost and ensure the performance of the organization by continuous inflow of raw materials, fulfilling the orders at right time, efficient inventory handling to avoid stock-out situation, reducing cycle time and most importantly the ability to compete the competitors, etc.

Supply Chain Management (SCM) is the managerial and operational strategy which removes each and every hurdle at each and every link in a supply chain so that overall cost may be optimized while delivering best value to the customers as well as chain partners and ensuring best returns, information, competence and continuous up gradation of overall supply chain.

This research paper descriptive in nature, it is based on secondary data and qualitative analysis. It inquires the relationships between the Supply Chain Management and organization capability and performance and finds Supply Chain Management as a tool to optimize organizational capability and performance.