RESEARCH PAPER
Journal of Humanities, Management, and Linguistics
January-June 2023, Vol. 01, No. 01, [14 – 27]
Published: 08th June 2023
https://ojs.traditionaljournaloflaw.com/index.php/TJHML
Implementation Of Digitalization Supply Chain Helps in Gaining of Competitive Advantages as Mediating Role in the Supply Chain Performance in Construction Organization in Pakistan
1The Institute of Management Sciences, Lahore, Pakistan
2 Wichita State University, United States
3 The Institute of Management Sciences, Lahore, Pakistan
4 The University Ibn Tofail Kenitra, Morocco
5 National College of Business Administration and Economics, Pakistan
*Corresponding Author Fahad.Sadique@gmail.Com
ABSTRACT
The competitiveness of supply chain operations is heightened and supports business. Digitalization is also helping to achieve a competitive edge by enhancing the overall performance. The objective of this research is investigated implementation of digitalization augment the effectiveness of operations and enable associations attain competitive edge by enhancing their supply chain capabilities. The data was gathered through questionnaire with a sample of 322 executives and managers in construction organizations in Pakistan. The present study's results shows that digitalization plays a crucial role in enhancing supply capabilities and performance, with a positive mediate result of competitive advantage between digitalization and performance. The results suggested that the utilization of digitalization has a significant influence on performance within the context of construction firms and also provides a competitive edge with respect to performance compared to competitors. The present research makes a valued addition to the existing knowledge on digitalization skills. Furthermore, it offers valuable insights for professionals, policymaking, and business performance. The results of this study may be used in the development of strategies and technologies that can assist partners in supply chains in more successfully collaborating in the face of unanticipated challenges. This may eventually lead to improvements company performance
Keywords: Digital supply chain, supply chain performance competitive advantages, and construction organization in Pakistan.
© 2023 The Authors, Published by (TJHML). This is an Open Access Article under the Creative Common Attribution Non-Commercial 4.0
INTRODUCTION
The modern world has become ever more complicated as a result of great rivalry, rapid variations in consumer tastes, abbreviated product life cycles, and fluctuating levels of customer satisfaction. Organizations are facing escalating pressure to successfully tackle these concerns.
The COVID-19 and Russia-Ukraine war (Jagtap et al., 2022), (Zhou et al., 2021) have significant influence on the global supply chain. Above-mentioned issues prompt inquiries concerning the utilization of digital technologies on distribution procedure, with aim of enhancing efficacy and overall business process flexibility. Digitalization has known as for enhancing performance, thereby augmenting the competitive advantage and sustainable performance of firms, as reported (Oh et al. 2019, Nekmahmud et al. 2020). The aims are to examine the influence of digitalization on the performance of construction firms in Pakistan. This industry has emerged as the primary catalyst for the country's economy. According to Asgari et al. (2013) and Jahed et al. (2022), this was primarily a result of the growing demand from customers for a variety of products at low prices with short lead times. According to Chan et al. (2017), The Firms priorities to enhanced performance of supply chain in order to fulfil demands. The organizations are enhancing their competencies with supply chain in order to augment their competitive edge. The increased complexity of the modern as compared to its traditional counterpart, builders are incorporating digital technology into their operations to enhance the performance of functions.
Literature on information systems has identified the potential influence of digitalization on supply chain practices. As wang et al. (2022) conducted a study that revealed that sustainable performance is significantly impacted by the digital supply chain. The (Yee et al. 2022) implementation of digitalization within the organization enhances supply chain performance, thereby improving responsiveness to address uncertainties (Nwagwu et al, 2021). The studies have demonstratedthelevelofpreparednessofdigitalinfrastructurewithinthesupplychainforefficient operational processes and enhanced performance (Rai et al., 2006 & Kim et al., 2021). Additionally, (Dias et al, 2022) say that the positive association between digitalization and performance. Many scholarly works have examined the influence of digitalization in the supply chain on its performance as evidence (Elrefae et al., 2022; Birkmaier et al., 2021; Burin et al., 2020; Navimipour et al., 2019; Saddique et al., 2023; Numan et al., 2022; Korpela et al., 2017; Nwagwu et al., 2023, Shahadat et al., 2023). Nonetheless, the association between the implementation of digital technology and supply chain performance remains inadequately understood. There are exists a gap in the literature regarding the connection between digital technology and its impact as a competitive advantage. Though present works influence digitalization on performance and its mediating role as a competitive advantage in the construction firms in Pakistan is scarce, According to Burin et al. (2020), the improvement of digital abilities within play a crucial role in establishing an organization’s ability to leverage information and knowledge management, thereby leading to increased competitiveness and overall performance. The implementation of digitalization within their supply chain operations in order to enhance their capabilities and attain a more competitive edge. The primary area is to investigate how the digitalization enhances performance of supply chain through competitive advantage. This study inquiries as follows: What is the influence of digital technology on the performance of supply chains? Employment of digitalization within organizational domains is a distinctive resource that generates dynamic technological capabilities, thereby enabling the attainment of competitive advantage and sustainedperformanceoveranextendedperiod. This research utilizes theviewpoint to construct a theoretical framework that includes digital supply chains, competitive advantage, and supply chain performance. These factors are significant in the field and represent novel scopes of study for supply chains. The present research endeavors to augment the knowledge on
digitalization and furnish valuable insights for senior managers and policymakers who are keen on comprehending the implications of digital supply chains.
LITERATURE REVIEW
The Study Background
In the current modest business landscape, industrial enterprises are actively pursuing paths to attain a competitive edge and enhance their overall performance in the face of unpredictable market conditions. For attain competitive advantage, it has imperative the company possess a degree of flexibility that enables it to swiftly reformulate its product pricing, quality, cost, and technological capabilities in response to unforeseeable market fluctuations. The integration of technological resources is a crucial factor in optimizing supply chain capabilities, thereby enhancing overall performance (Saddique et al., 2023). The dynamic capability theory and resource-based view are two prominent philosophies used to clarify the relationship between resources and their performance. As per the tenets of (RBV), organizational resources that possess theattributes of being valuable,non-substitutable, rare, and inimitableserve to attain a competitive edge (Barney et al., 1991). RBV has been extensively employed in prior information systems (IS) literature to clarify how digital technology competencies can be leveraged to augment organizational skills and enhance supply chain capabilities. As Chaudhuri et al. (2022) point out, digital technology is a tangible asset that is integrated into an organization’s strategic plan to augment its capacity. According to (Eie et al. 2019), utilization of digitalization has results to enhanced supply chain capabilities, leading to a direct impact on business operations. This impact is reflected in the reduction of operational costs, improvement in product quality, development of new products, increase in market share, and fulfilment of customer satisfaction (Li, 2022, Teece et al., 1997). The concept of digitalization pertains to enhancing efficiency and enabling quick responses from stakeholders (Chen, 2019). The digitalization refers to generation of alternative solutions and improved mechanisms for organizations in response to unforeseen market conditions, as suggested (Shekarian et al. 2020). As per the latest research in the field of information technology, researchers are progressively regarding digital technology as an organizational resource to establish advanced abilities such as responsiveness and adaptability pertaining to business operations. Integration of digitalization into the performance to facilitates collaboration with timely distribution of information, thereby improving decision-making. The study suggests that integration of digitalization could serve as a matter for enhancing performance that ultimately leading to a positive impact on firms to gain competitive advantages.
Digital Supply chain and performance of supply chain:
According to (Benzidia et al. 2020), supply chain performance refers to a complex system of interconnected entities, including each organization and their respective suppliers, that collaborate to manufacture and allocate a particular product to end-users. Effective management is crucial to ensuring the smooth operation of the various stages involved in processes. The GSCF model suggests that organization encompasses a range of factors, including relationships with consumers, service to customers, order fulfilment, demand, production, the vendor association, the growth of products, and delivery, as drawn by De Barros et al. (2015). Globalization has presented
challenges to the conventional supply chain in terms of effectively adapting to dynamic environments and optimizing relationship management (Fahad et al., 2021). The contemporary issues are characterized by heightened complexity in comparison to its conventional counterpart, owing to the occurrence of disruptions, growing pressure, reduced lifecycle of products, and amplified global customer demand. The utilization of digital technology has effectively eliminated obstacles in managing supply chains, resulting in notable enhancements in both visibility and efficiency, as evidenced by studies conducted (Slusarczyk et al. 2020). As, (Kalogiannidis et al. 2022), "digitalization pertains to the integration of technological advances into the operations of a company's supply chain as well as its stakeholders. This enables them to efficiently and expeditiously determine the origins of both supply and customer demand, thereby facilitating accurate decision-making. (Gome et al. 2018) suggest that a digitally technologically advanced construct is employed to facilitate operations within supply chain networks, thereby enhancing the delivery of services in an efficacious and valuable manner. The term "digitalization refers to the utilization of technology to optimize organizational operations with all stakeholders, resulting in improved capabilities and enhanced performance (Yerpude et al., 2023 & Ehie et al., 2019). As, (Lee et al. 2022) asserts that adoption of digitalization has potential to improve not only individual but also organizational performance. Prior research on digitalization has established an association between technological advances and performance (Pakurar et al., 2020 & Nandi et al., 2020). The integration of cost competences into product and services, the creation of a competitive edge, the lessening of lead times, and the enhancement capabilities of supply chain are all key aspects of digitalization (Korpela et al. 2017). The integration of digitalization procedures presents novel prospects forenhancing supply chain performance. Theintegrationofdigitalizationintothesupply chain facilitates efficient collaboration and timely dissemination of data, thus enlightening the reliability of the performance (Chen et al, 2019 & Bi et al, 2013). As in the above discussion,
Hypothesis: H1: There is positive relationship between digitalization and supply chain performance.
Digital supply chain and Competitive advantages
Theconceptofcompetitiveadvantagereferstoanorganization’scapacitytoattainanupper limit of keenness for its goods within a given business relative to its competitors. The competitive environment with digital technology is attributed to the optimization of manufacturing and operational expenses, the provision of superior items ranges, and heightened levels satisfaction of customers (Chen et al., 2019). According to Dubey et al. (2021), conventional symbols show competitive benefits with digital technology, which encompass improved control and performance. AccordingtoElrefaeet al.(2022),anorganization’scompetitiveadvantageincreases with a digital supply chain that introduces novel products and services, competitive pricing, product excellence, and efficient delivery systems. In the context of a highly competitive market, the acquisition of a competitive edge in the management of supply chains is imperative for firms. This necessitates the possession of dynamic capabilities such as adaptability with digitalization. According to (Bi et al. 2013), digitalization refers to an association’s ability to effectively answer to unforeseen modifications in the business environment with the aim of enhancing operational efficiency and gaining a competitive edge, ultimately leading to long-term business sustainability.
According to Chan et al. (2017), the key factors for achieving a competitive edge in a highly competitive company with the digitalization. According to (Dubey et al. 2021), the possibility of achieving a competitive advantage growth due to digitalization. As (Eie et al. 2019), digitalization involves effective engagement with the aim of enhancing service and attaining competitive advantage. Theglobal supply chains performance is significantlyinfluencedbytheusageofdigital supply chains. As (Kazancoglu et al. 2022) suggest that enhancing the digitalization with competition advantages will improve performance. As in the above discussion:
Hypothesis H2:Digital supply chain has positiverelationship with competitiveadvantages.
Competitive advantage and Performance of
supply chain
Supply chain performance has a direct impact on firms’ performance. Organizations have come to recognizethat enhancing theperformance andalso forachieving acompetitiveadvantage. As(Naz et al. 2021) the competitive business climate significantly impacts performance in areas such as logistics and inventory. As (Towill et al. 2003) say that the primary objective of these procedures is to facilitate the seamless transfer of information across in a competitive way while minimizing disruptions. As such, optimal performance is crucial for gaining a competitive edge. As (Sukati et al. 2012), the performance of the supply chain is positively associated with competitive advantage. Furthermore, Lee et al. (2022) suggests a strong association between the performance and the competitive advantage of a company. According to Putri et al. (2019), the improved competitiveness of a company may be attributed to enhanced supply chain performance. Therefore, as in the above discussion,
Hypothesis H3: There are positive relation with competitive advantage and supply chain performance.
Mediation Role of Competitive Advantages
The digital supply chain refers to firm’s ability to effectively answer to unforeseen changes in the business situation with the aim of enhancing operational efficiency and gaining a competitive edge, ultimately leading to long-term business sustainability. (Bi et al. 2013). According to Chan et al. (2017), the key factors for achieving a competitive edge in a highly competitive company within the dominion of management of supply chain are strategic flexibility with the digitalization. As (Dubey et al. 2021), the possibility of achieving competitive advantage increases with digitalization. As (Eie et al. 2019) digitalization involves the effective engagement of supply chain associates to enhancing service and achieving a competitive advantage. The performance of the global chain is significantly influenced by the level of flexibility within the digital supply chain. (Kutanoglu et al. 2022) suggest that enhancing the digitalization with competition advantages will improveperformance.As (Lietal et al. 2006) thecompetitivebusiness climate significantly impacts performance in areas such as logistics and inventory. Towill et al. (2003) say that the primary objective of these procedures is to facilitate the seamless transfer of information to value chain in good way while minimizing disruptions. As such, optimal performance is crucial for gaining a competitive edge. As (Sukati et al, 2012), the performance is positively associated with competitive advantage. Furthermore, Lee et al. (2022) suggests a strong association between the performance and the competitive advantage of company. According to
(Putri et al. 2019), the improved competitiveness of a company can be attributed to the enhanced performances (Nawaz et al., 2021). So, digitalization has a better result in performance and organizations increase competitive advantages as compared to other competitors. As in the above discussion,
Hypothesis H4: The is positive mediate relation between Digitalization and supply chain performance.
Conceptual Framework
RESEARCH METHODOLOGY
This study is based on primary source of data collection from construction companies in Lahore, Pakistan (Mushtaq et al., 2021). This survey respondent’s response was ensured to be completely confidential (Saddique et al., 2021; Fahad et al., 2023). The questionnaire collected data on the digitalization, competitive advantage, supply chain performance, and demographic variables. The population sample was based on 322 employees of construction companies in Lahore, Pakistan
Table # 1: No. of Items, Sample Items, Measures and Reference
RESULTS AND FINDINGS
The results and findings include the following types of results and analysis: descriptive analysis, inferential analysis, reliability, correlation, and regression analysis. All the findings in detail are given below
As shown in Table 2, the recent study was based on a sample size of 322 workers and executives of construction companies in Lahore, Pakistan. The current study was based on data from male (n = 219) and female (n = 103) respondents. In the sample data, the most age groups are below 25 (n = 121) and few are older than 60 (n = 33). In the study, most respondents were graduates (n = 135), and very few were postgraduates (n = 42).
As shown in Table 3, to add more appreciation characteristics, mean and standard deviations were calculated and discussed as follows, value of digital supply chain is (mean = 3.61, standard deviation = 0.82), the competitive advantage value is (mean = 3.84, standard deviation = 0.87), and the supply chain performance is (mean = 3.91, standard deviation = 0.89).
Furthermore, the reliability analysis is given below.
As shown in Table 4, all scale reliability was checked using Cronbach’s alpha test, and all scales show that the measures reliability is greater than 0.70, which is sufficient for further analysis. Moreover, the correlation analysis is discussed below.
As shown in Table 5, the correlation analysis is shown. The digitalization has a significant positive relationship with performance (r = 0.137, P=0.05). Furthermore, the digitalization has a significant relationship with competitive advantages (r = 0.139, p 0.05). In addition, competitive advantages and supply chain performance have positive relationship (r = 0.321, p 0.05). The result shows that if the employees have digital technology, it provides competitive advantages in the better performance of supply chain functions. Moreover, the regression analysis is discussed below.
6: Regression
Note ***p<0.01, **p<0.05
As shown in Table 7, the regression analysis is shown. It’s finding that the direct relation of digital supply chain with performance of supply chain (β =0.137, p = 0.00) is significant. So, Hypothesis, H1 is accepted. Similarly, the effect of the digital supply chain on competitive advantages (β =0.121, p = 0.000) is significant. So, hypothesis H2 is accepted. The result of competitive advantages on performance of supply chain (β =0.224, p = 0.000) is statistically significant. So, Hypothesis H3 is accepted. Therefore, competitive advantages partially mediate the association between digitalization and performance of supply chain. So, Hypothesis H4 is accepted.
DISCUSSION
In extremely competitive marketplace landscape, business enterprises exhibit significant interest in the capacity of their supply chains to facilitate competitive advantage by enhancing overall supply chain performance. The present study investigates whether integration with digitalization has resulted in enhanced supply chain performance and a competitive edge. The findings indicate that the utilization of digitization have favorable influence on the performance of supply chain. The results indicate that incorporation of digitalization has led to a remarkable enhancement in performance. The findings suggested that the incorporation of digitization into supply chain systems can improvetheirefficacy andefficiencyin adaptingtoenvironmentalshifts. This study also supports the mediation association between competitive advantage in performance
of supply chain and digitalization. As (Benzidia et al, 2020) conducted a study that concluded that IT applications play a crucial role in facilitating organizational processes, thereby enhancing the organization’s capacity to adapt to dynamic market conditions. According to (Chen et al, 2019 & Sheel et al. 2019) suggested that digital interactions with associations are advantageous for promptly detecting market fluctuations and fostering the performance. The digitization has been observed have a favorable impact and a direct association with the better output of organizations. The digitalization possesses significant potential to efficiently mitigate supply chain risk. The research indicates that the digital technology has important influence on operations. According to Burin et al.'s 2020 study, this significantly influences a firm’s advantages. According to Elrefae et al. (2022), a supply chain digitalization has the capacity to enhance its awareness within a competitive market setting. Hence, the ability to adapt and modify the supply system is a crucial element in attaining a competitive edge. According to (Shekarian et al. 2020) & Dubey et al. 2021 & Shahadat et al. 2023 & Itange et al. 2022), Likewise, the digitalization has a favorable impact on attainment of a competitive advantage. The (Chen et al. 2019 & Jahed et al.2022) studies concluded that the implementation of digitalization practices has influence on performance. The implementation of digital supply chain procedures has established novel association in the performance, which has potential to facilitate more deep arrangements with suppliers situated upstream and partners situated downstream in the performance of supply chain (Lee et al., 2022; Gupta et al., 2021; Kim et al., 202; Nwagwu et al., 2020).
CONCLUSION
The present research has established the incorporation of digitalization in supply chain process may provide a competitive edge to organizations. The present study has also revealed a positive association between digital supply chains and their performances may provide a competitive edge to organizations. The present study has also revealed a positive correlation between digitalization and performance. The digitalization has impact on the enhance performance. The positive influence of competitive advantage can be attributed to the application of supply chain. The capacity of supply chain is a unique attribute that enables it to effectively navigate the high levels of uncertainty present in the market environment. These qualities serve as intermediary factors between the supply chain of digitalization has attainment the competitive advantage. The implementation of digitalization in supply chain systems has significantly contributed to the improvement of performance. This approach involves establishing long-term relationships with stakeholder.Thepresent study underscores thecrucial significanceofthesupply chain's digital component in attaining a competitive edge and enhancing the performance in construction firms. The results provide original insights into understanding the process of digitalization in emerging economies.
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