The Impact of Digitalization on Supply Chain Integration and Performance

Abstract

The purpose of this paper is to investigate the relationships between digitalization, supply chain integration, and firm performance. Data are analyzed by the partial least square structural equation modeling (PLS-SEM). The results revealed that both digitalization in the supply chain and supply chain external integration positively affected company performance. Further, supply chain external integration partially mediated the relationship between supply chain digitalization and firm performance. In addition, it was found that financial performance is enhanced through different paths for large enterprises and SMEs. Large enterprises improve financial performance through supply chain integration after efforts spent on the digitalization of their supply chain, while SMEs improve financial performance directly through supply chain digitalization. These findings provide insights for managers and policymakers of large enterprises and SMEs in formulating appropriate implementation strategies for digital transformation.