How does the adoption of digital technologies in supply chain management enhance supply chain performance? A mediated and moderated model

The industry 4.0 revolution has changed how organizations operate in today's complex business environment. Organizations are increasingly adopting modern digital technologies to improve performance across different functions. The supply chain management (SCM) field has undergone radical transformations in recent years, particularly due to COVID-19, where organizations strive to improve their supply chain (SC) performance by adopting digital technologies in SCM. Using a resource-based view (RBV) and technology-organization-environment (TOE), the current study contributes to the current debate on the adoption of digital technologies to improve SC performance; the study also proposes the mediating roles of supply chain innovation and supply chain dynamic capabilities on the relationship between the adoption of digital technologies in SCM and SC performance. The study also stresses the moderating role of digital innovation capabilities if SC innovation and SC dynamic capabilities are to be improved by adopting digital technologies in SCM. Data is collected from 482 SMEs operating in different sectors of Pakistan, and structural equation modelling (SEM) through SmartPLS software is used to test the proposed hypotheses. The findings suggest that adoption of digital technologies in SCM significantly enhances SC innovation and performance for SMEs. However, the direct impact on dynamic capabilities remains limited, emphasizing the need for additional internal readiness and resources. Mediation analysis confirms the critical role of supply chain innovation in translating technological adoption into performance benefits, while dynamic capabilities show limited mediating effects. The study found that digital innovation capabilities do not significantly moderate the relationships between the adoption of digital technologies and supply chain innovation or dynamic capabilities. The study's practical implications encourage SMEs to leverage cost-effective digital tools for improved efficiency and competitiveness. Policymakers are advised to support SMEs with incentives to facilitate digital transformation, enabling resilience in dynamic market conditions.