The objective of this paper is to attempt to explain the main challenges of supply chain management efficiency in the dairy industry and within the context of general theoretical considerations relating to supply chain management. This paper examines theoretically and empirically the current supply chain practices, integration with customers and suppliers and organizational performance in the dairy companies in North Macedonia. Cost savings, increased revenues and overall organizational performance was examined and various practices of local companies were evidenced. The study also highlights the evolution, determinants and practical implications of supply chain management efficiency in strategic and operational contexts and especially in regards to achieving competitive advantage. A self-administered survey was conducted and data were collected through a random sampling of local dairy companies in North Macedonia. The findings of this study show that the quality, speed, dependability, flexibility and cost associated with economic benefits in the dairy industry can be achieved through technological innovation, effective business processes and high level of information sharing and introducing the SCM practices into more cooperative organizational relationships. Currently, there is a strong need to find better practical solutions that will help decision makers in the dairy industry to plan their supply chain activities more efficiently and effectively by managing the posed challenges and barriers. This will serve as also to make better strategic decisions with end-to- end supply chain optimization mode.