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A number of studies have looked at the impacts of supply chain strategies on firm performance. Yet, how different supply chain practices translate to firm performance remains unclear. Drawing from the resource based view, this study investigates the role of supply chain capabilities in mediating the relationships between supply chain practices and firm performance. A survey was conducted with 171 manufacturing firms in five Chinese cities to empirically validate the research model. Our findings suggest that, supply chain practices, as driven by supply chain strategies, create different supply chain capabilities and lead to firm performance. The findings shed some lights on the mechanism in which supply chain strategies and practices translate into firm performance.