This paper investigates the relationship between supply chain management practices and organizational performance with the mediating role of innovation. Data were collected from 207 small and medium enterprises (SMEs) in Punjab, Pakistan. PLS-SEM was used to analyze the proposed hypotheses. Findings reveal that strategic partnership with supplier and level of information sharing had no influence on organizational performance. In addition, quality of information sharing, internal supply chain process, and lean practices had significant influence on organizational performance. Moreover, all five practices of supply chain management had significant and positive influence on innovation. Meanwhile, innovation significantly and positively mediated the relationship between supply chain management five practices and organizational performance. The findings of this study will help managers of SMEs enhance their performance.