Track: Supply Chain Management
Abstract
The world is rapidly changing and the technology used is constantly evolving. The ultimate goal of any supply chain is to achieve end-to-end transparency by means of analysis of real time data. The incorporation of a digital supply chain can help achieve this goal. With the onset of the pandemic several supply chains have been crippled. The need for digitalisation of the processes and upgrading of supply chains is essential since the current chains are considered to be outdated and are no longer capable of keeping up with business requirements. The inception of an intelligent supply chain with the incorporation of analytics and smart devices can open doors to create a transformation in the existing supply chain management system into one that is independent and self-conditioning. Various tools such as Cloud Computing, Internet of Things, Big Data Analytics, sensors, RFIDs, drones, additive manufacturing, robotic systems, augmented reality, Enterprise Resource Planning software (ERP), etc. can be used for the digitalization of the supply chain.
In the Indian Manufacturing industry, while multinational companies are aggressively working towards digitalizing their supply chains, the MSME sector is reluctant to undergo this transformation. The possible reasons for this might be the lack of information and research available which truly understands the benefits reaped by companies which have digitalized their supply chains in this sector.
The focus of this research is to understand the current scenario existing in the manufacturing sector particularly in the SMEs sector and to conduct an exploratory study on the impact of digitalization on the manufacturing industry by focusing on visibility and improved performance. Current literature claims the positive effects of digitalization on performance and visibility. Increased visibility is also found to have a positive influence on performance.
However, the integrated effect of digitalization, visibility and performance has not been empirically investigated. To address this gap, the research is aimed to carry out a study investigating the indirect effects of digitalization on performance with visibility as the mediating variable; furthermore, to also confirm whether or not there are direct effects of digitalization on visibility and performance. The study is based on data collected from a survey, which upon analysis using confirmatory factor analysis and structural equation modelling reveals that digitalization has a positive and direct influence on visibility and performance. The study also identified visibility as a significant mediating variable.
It was further observed that the upgradation to a digitalized supply chain reaped benefits in several areas. Some of the most beneficial aspects were the performance of the order fulfillment rate followed up by the economic performance. Coming to the visibility aspects, inculcation of digitalization improved transparency between the supplier, retailer and distributor. It also highly positively impacts the planning operations.
Hence deeming the upgradation to a digital supply chain highly fruitful and beneficial for MSME companies in the Indian manufacturing sector.