Hedging the bet on digital transformation in strategic supply chain management: a theoretical integration and an empirical test

TLDR

The study responds to repeated calls for a new understanding of supply‑chain digital transformation strategy. It conceptualizes digital transformation strategy in supply chains, identifies intra‑ and inter‑organizational drivers, and examines its impact on strategic agility and financial performance in Chinese manufacturing firms. The authors built a theoretical model integrating diffusion of innovation and organizational information processing theory, then empirically tested it with partial least squares structural equation modeling on data from 200 Chinese manufacturing firms. Supply‑chain connectivity boosts both DT adoption and routinization, while data analytics capability and organizational learning promote adoption but not routinization; DT strategy directly improves financial performance and more strongly does so indirectly through enhanced strategic agility, and the study also identifies a discord between existing DT strategy and supply‑chain context, proposing a new framework.

Abstract

Purpose This study conceptualizes the digital transformation (DT) strategy in a supply chain context, identifies its drivers from intra- and inter-organizational perspectives and examines the effect of the DT strategy on the strategic agility and financial performance of Chinese manufacturing firms. Design/methodology/approach The authors constructed a theoretical model by synthesizing the diffusion of innovation and organizational information processing theory (OIPT) and provided a set of hypotheses. The authors empirically tested the arguments using partial least squares structural equation modeling using data from a sample of 200 manufacturing firms in China. Findings The findings indicate that while supply chain connectivity positively affects DT adoption and DT routinization, data analytics capability and organizational learning positively influence DT adoption but not DT routinization. The mediation analysis also shows that DT strategy has significant direct effects on financial performance and a stronger indirect influence on financial performance via improved strategic agility. Research limitations/implications This study responds to repeated calls for a new understanding of supply chain DT strategy. In addition, the study offers important contributions to the literature by identifying the potential discord between the existing DT strategy and the supply chain context and proposes a new framework that provides essential theoretical underpinnings. Originality/value This study enriches the literature by conceptualizing and validating the dimensions, driving factors and performance implications of DT strategy in strategic supply chain management.