Supply chain collaboration is critical for smooth and efficient functioning of firms and it is a powerful weapon to optimize performance of the organization. Ethiopia firms are not sufficiently getting the benefits of SCC due to lack of the practice of collaboration and not having willingness and the practice of managing supply chains. Even though limited scientific research has been undertaken to examine the effect of supply chain collaboration on supply chain performance in manufacturing industries in Bahir Dar town, Ethiopia. Therefore, this study aimed to examine the effect of supply chain collaboration on supply chain performance of large manufacturing industries in Bahir Dar Town, Ethiopia. This research develops five supply chain collaboration dimensions as independent variable (information sharing, incentive alignment, resource sharing, goal congruence and joint decision making) and supply chain performances. The paradigm of the research was positivist world view. Quantitative research approach was used. The study employed both descriptive and inferential analysis to analyse and interpret the gathered data. The researcher was used primary source of data through questionnaire from 325 respondents from 4 sampled large manufacturing industries .To collect data from the respondents of the case industry stratified sampling was used. The data were filled using the Five Point LikertScale while the Cronbach Alpha was used to check the data for reliability of measurement scale. Data was analysed by aid of Statistical Package for Social Sciences (SPSS) version 26. Spearman’s rho Correlation test statistics were applied for testing the association between dependent and independent variable. Ordinal logistic regression model was applied to show the effect of supply chain collaboration on supply chain performance. The main findings indicate that, incentive alignment(ß=0.664 p,=0.001), information sharing (ß=0.673 p,=0.001),resource sharing(ß=1.203 p,=0.000),goal congruence (ß=0.542 p,=0.002) are positively determines supply chain performance of large manufacturing industries Bahir Dar Town whereas joint decision making(ß =-.411,p=0.023)has a negative significant effect on SCP ,especially resource sharing has the most statistical significant effect on supply chain performance of large manufacturing industries Bahir Dar Town. The researcher conclude that supply chain collaboration has statistically significant effect on supply chain performance. Manufacturing Companies in Bahir Dar Town are recommended to integrate internally for effective and sound supply chain collaboration.