Digital Transformation of Supply Chains and Organizational Performance: A Preliminary Study of Manufacturing Units in Nashik

Abstract

Digital transformation of supply chains is increasing competitiveness and performance of industrial companies. Empirical data on how digital supply chain transformation affects regional manufacturing performance is not available as previous work has focused on major enterprises and urban industrial clusters only. The current paper fills this gap by studying level of digital supply chain transformation and its influence on organizational performance in medium and large manufacturing units in Nashik (a major Tier- II industrial district) in India.

The quantitative cross-sectional research design was used to study the relationship between digital supply chain transformation and organizational performance among manufacturing units in Nashik. Primary data were collected from 30 managers and operational staff who make supply chain and digital decisions. Digital supply chain transformation was measured by system integration, visibility of the supply chain, process automation and data analytics; organizational performance was measured on operational and strategic dimensions. Descriptive statistics, regression analysis and mediation analysis were applied.

The results indicate moderate digital transformation (stronger use of foundational digital capabilities and less advanced analytical technologies). Digital supply chain transformation significantly improves both supply chain effectiveness and organizational performance. Supply chain effectiveness also significantly mediates the relationship between digital transformation and organizational performance (i.e., coordination, responsiveness and operational efficiency); coordination, responsiveness and operational efficiency are important for organizational performance. Among the digital dimension’s data analytics and system integration contribute most to improved supply chain effectiveness and organizational performance respectively.

The study adds context specific information from a Tier-II manufacturing location to the digital supply chain and operations management literature and clarifies how digital Transformation improves organizational performance. The results may help managers and governments improve digital preparedness and supply chain resilience in developing industrial ecosystems.