Instrumented Supply Chain and Interconnected Supply Chain on Operational Performance: The Role of Smart Technology

Zilnia Putri; Muhammad Ali Fikri

doi:10.32535/ijabim.v10i2.3995

Instrumented Supply Chain and Interconnected Supply Chain on Operational Performance: The Role of Smart Technology

Zilnia Putri, Muhammad Ali Fikri

Abstract

Transformation in the Industry 4.0 era has pushed manufacturing companies to adopt the latest technologies in their supply chains to enhance operational efficiency and productivity. This study aims to examine the influence of instrumented supply chain and interconnected supply chain on operational performance, with smart technology as a mediating variable. Data were collected using a purposive sampling method from 100 respondents of micro, small, and medium enterprises (MSMEs) in the manufacturing sector in Yogyakarta. The analysis was conducted using Smart PLS 4.0 software. The results reveal that the instrumented supply chain significantly influences operational performance (? = 0.546, p = 0.000) and smart technology (? = 0.515, p = 0.000). In contrast, the interconnected supply chain does not significantly affect operational performance (? = 0.052, p = 0.622), but has a significant effect on smart technology (? = 0.288, p = 0.011). Smart technology also significantly improves operational performance (? = 0.304, p = 0.014) and mediates the effect of instrumented supply chain on operational performance (? = 0.156, p = 0.046). However, it does not mediate the effect of the interconnected supply chain on operational performance (p = 0.071). These findings highlight the strategic role of digital instrumentation and smart technology in enhancing supply chain-driven performance

Keywords

Instrumented supply chain; interconnected supply chain; smart technology; operational performance

Full Text:

PDF

References

AlMulhim, A. F. (2021). Smart supply chain and firm performance: the role of digital technologies. Business Process Management Journal, 27(5), 1353-1372. https://doi.org/10.1108/BPMJ-12-2020-0573

Alshurideh, M. T., Alquqa, E. K., Alzoubi, H. M., Al Kurdi, B., & Alhamad, A. (2023a). The impact of cyber resilience and robustness on supply chain performance: Evidence from the UAE chemical industry. Uncertain Supply Chain Management, 11(1), 187-194. https://doi.org/10.5267/j.uscm.2022.10.008

Alshurideh, M. T., Alquqa, E. K., Alzoubi, H. M., Al Kurdi, B., & Hamadneh, S. (2023b). The effect of information security on e-supply chain in the UAE logistics and distribution industry. Uncertain Supply Chain Management, 11(1), 145-152. https://doi.org/10.5267/j.uscm.2022.11.001

Alzoubi, H. M., Elrehail, H., Hanaysha, J. R., Al-Gasaymeh, A., & Al-Adaileh, R. (2022). The role of supply chain integration and agile practices in improving lead time during the COVID-19 crisis. International Journal of Service Science, Management, Engineering, and Technology, 13(1), 1-11. https://doi.org/10.4018/IJSSMET.290348

Ambrogio, G., Filice, L., Longo, F., & Padovano, A. (2022). Workforce and supply chain disruption as a digital and technological innovation opportunity for resilient manufacturing systems in the COVID-19 pandemic. Computers & Industrial Engineering, 169, 108158. https://doi.org/10.1016/j.cie.2022.108158

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. https://doi.org/10.1177/014920639101700108

Bayraktar, E., Demirbag, M., Koh, S. L., Tatoglu, E., & Zaim, H. (2009). A causal analysis of the impact of information systems and supply chain management practices on operational performance: Evidence from manufacturing SMEs in Turkey. International Journal of Production Economics, 122(1), 133-149. https://doi.org/10.1016/j.ijpe.2009.05.011

Ben-Daya, M., Hassini, E., & Bahroun, Z. (2019). Internet of things and supply chain management: A literature review. International Journal of Production Research, 57(15-16), 4719-4742. https://doi.org/10.1080/00207543.2017.1402140

Bienhaus, F., & Haddud, A. (2018). Procurement 4.0: factors influencing the digitisation of procurement and supply chains. Business Process Management Journal, 24(4), 965-984. https://doi.org/10.1108/BPMJ-06-2017-0139

Butner, K. (2010). The smarter supply chain of the future. Strategy & Leadership, 38(1), 22-31. https://doi.org/10.1108/10878571011009859

Cahyaningratri, C., & Naylah, M. (2023). The effect of supply chain operational capabilities in consolidating organizational compatibility of supply chain process integration and business performance. Uncertain Supply Chain Management, 11(1), 95-102. https://doi.org/10.5267/j.uscm.2022.11.006

Central Agency of Statistics of DI Yogyakarta Province (BPS Provinsi DIY). (2024, May 6). Pertumbuhan Ekonomi DIY Triwulan I 2024. BPS DI Yogyakarta. https://yogyakarta.bps.go.id/id/pressrelease/2024/05/06/1596/pertumbuhan-ekonomi-diy-triwulan-i-2024.html

Chau, K. Y., Tang, Y. M., Liu, X., Ip, Y. K., & Tao, Y. (2021). Investigation of critical success factors for improving supply chain quality management in manufacturing. Enterprise Information Systems, 15(10), 1418-1437. https://doi.org/10.1080/17517575.2021.1880642

Chesbrough, H. W. (2003). Open Innovation: The New Imperative for Creating and Profiting from Technology. Harvard Business Press.

Chung, J. E., Oh, S. G., & Moon, H. C. (2022). What drives SMEs to adopt smart technologies in Korea? Focusing on technological factors. Technology in Society, 71, 102109. https://doi.org/10.1016/j.techsoc.2022.102109

Dai, Y., Dou, L., Song, H., Zhou, L., & Li, H. (2022). Two-way information sharing of uncertain demand forecasts in a dual-channel supply chain. Computers & Industrial Engineering, 169, 108162. https://doi.org/10.1016/j.cie.2022.108162

Dolgui, A., & Ivanov, D. (2022). 5G in digital supply chain and operations management: fostering flexibility, end-to-end connectivity and real-time visibility through internet-of-everything. International Journal of Production Research, 60(2), 442-451. https://doi.org/10.1080/00207543.2021.2002969

Donaldson, L. (2001). The Contingency Theory of Organizations. Sage Publications.

Dubey, R., Gunasekaran, A., Childe, S. J., Blome, C., & Papadopoulos, T. (2019). Big data and predictive analytics and manufacturing performance: integrating institutional theory, resource?based view and big data culture. British Journal of Management, 30(2), 341-361. https://doi.org/10.1111/1467-8551.12355

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50. https://doi.org/10.1177/002224378101800104

Ghozali, I. (2021). Partial Least Squares (PLS) Metode Alternatif Structural Equation Modeling (SEM) (7th ed.). Badan Penerbit Universitas Diponegoro.

Gubbi, J., Buyya, R., Marusic, S., & Palaniswami, M. (2013). Internet of Things (IoT): A vision, architectural elements, and future directions. Future Generation Computer Systems, 29(7), 1645-1660. https://doi.org/10.1016/j.future.2013.01.010

Guo, X., Zhang, G., & Zhang, Y. (2022). A comprehensive review of blockchain technology-enabled smart manufacturing: A framework, challenges and future research directions. Sensors, 23(1), 155. https://doi.org/10.3390/s23010155

Gupta, S., Drave, V. A., Bag, S., & Luo, Z. (2019). Leveraging smart supply chain and information system agility for supply chain flexibility. Information Systems Frontiers, 21(3), 547-564. https://doi.org/10.1007/s10796-019-09901-5

Hair Jr, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R: A Workbook. Springer Nature.

Hanaysha, J. R., & Alzoubi, H. M. (2022). The effect of digital supply chain on organizational performance: An empirical study in Malaysia manufacturing industry. Uncertain Supply Chain Management, 10(2), 495-510.

He, L., Xue, M., & Gu, B. (2020). Internet-of-things enabled supply chain planning and coordination with big data services: Certain theoretic implications. Journal of Management Science and Engineering, 5(1), 1-22. https://doi.org/10.1016/j.jmse.2020.03.002

Ivanov, D., & Keskin, B. B. (2023). Post-pandemic adaptation and development of supply chain viability theory. Omega, 116, 102806. https://doi.org/10.1016/j.omega.2022.102806

Ivanov, D., Das, A., & Choi, T. M. (2018). New flexibility drivers for manufacturing, supply chain and service operations. International Journal of Production Research, 56(10), 3359-3368. https://doi.org/10.1080/00207543.2018.1457813

Jaekel, B. (2020, June 26). A Smart Supply Chain Is an Efficient One. Supply & Demand Chain Executive. https://www.sdcexec.com/software-technology/software-solutions/article/21133671/a-smart-supply-chain-is-an-efficient-one

Kache, F., & Seuring, S. (2017). Challenges and opportunities of digital information at the intersection of big data analytics and supply chain management. International Journal of Operations & Production Management, 37(1), 10-36. https://doi.org/10.1108/IJOPM-02-2015-0078

Kagermann, H., Wahlster, W., & Helbig, J. (2013). Recommendations for Implementing the Strategic Initiative Industrie 4.0: Final Report of the Industry 4.0 Working Group. Acatech – National Academy of Science and Engineering. https://www.din.de/resource/blob/76902/e8cac883f42bf28536e7e8165993f1fd/recommendations-for-implementing-industry-4-0-data.pdf

Kaydos, W. (1999). Operational Performance Measurement: Increasing Total Productivity. CRC Press.

Kukanja, M., & Planinc, T. (2020). Toward cost-effective service excellence: Exploring the relationship between managers’ perceptions of quality and the operational efficiency and profitability of restaurants. Quality Management Journal, 27(2), 95-105. https://doi.org/10.1080/10686967.2020.1722046

Lawrence, P. R., & Lorsch, J. W. (1967). Organization and Environment: Managing Differentiation and Integration. Harvard Business School Press.

Lee, K. L., Wong, S. Y., Alzoubi, H. M., Al Kurdi, B., Alshurideh, M. T., & El Khatib, M. (2023). Adopting smart supply chain and smart technologies to improve operational performance in manufacturing industry. International Journal of Engineering Business Management, 15, 18479790231200614. https://doi.org/10.1177/18479790231200614

Li, G., Tan, J., & Chaudhry, S. S. (2019). Industry 4.0 and big data innovations. Enterprise Information Systems, 13(2), 145-147. https://doi.org/10.1080/17517575.2018.1554190

Li, X. (2020). Reducing channel costs by investing in smart supply chain technologies. Transportation Research Part E: Logistics and Transportation Review, 137, 101927. https://doi.org/10.1016/j.tre.2020.101927

Mehmood, T. (2021). Does information technology competencies and fleet management practices lead to effective service delivery? Empirical evidence from e-commerce industry. International Journal of Technology Innovation and Management, 1(2), 14-41. https://doi.org/10.54489/ijtim.v1i2.26

Naway, F. A., & Rahmat, A. (2019). The mediating role of technology and logistics integration in the relationship between supply chain capability and supply chain operational performance. Uncertain Supply Chain Management, 7(3), 553–566. https://doi.org/10.5267/j.uscm.2018.11.001

Neely, A., Gregory, M., & Platts, K. (1995). Performance measurement system design: A literature review and research agenda. International Journal of Operations & Production Management, 15(4), 80-116. https://doi.org/10.1108/01443579510083622

Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, 92(11), 64-88.

Ramakrishna, Y., Alzoubi, H. M., & Indiran, L. (2023). An empirical investigation of effect of sustainable and smart supply practices on improving the supply chain organizational performance in SMEs in India. Uncertain Supply Chain Management, 11(3), 991-1000. http://doi.org/10.5267/j.uscm.2023.5.001

Rawat, R. (2022). A systematic review of blockchain technology use in e-supply chain in internet of medical things (IoMT). International Journal of Computations, Information and Manufacturing, 2(2). https://doi.org/10.54489/ijcim.v2i2.119

Shao, X. F., Liu, W., Li, Y., Chaudhry, H. R., & Yue, X. G. (2021). Multistage implementation framework for smart supply chain management under industry 4.0. Technological Forecasting and Social Change, 162, 120354. https://doi.org/10.1016/j.techfore.2020.120354

Slack, N., Chambers, S., & Johnston, R. (2010). Operations Management (6th ed.). Pearson Education Limited.

Sugiyono, S. (2023). Metode Penelitian Kuantitatif, Kualitatif dan R&D (26th ed.). Alfabeta.

Sukathong, S., Suksawang, P., & Naenna, T. (2021). Analyzing the importance of critical success factors for the adoption of advanced manufacturing technologies. International Journal of Engineering Business Management, 13, 18479790211055057. https://doi.org/10.1177/18479790211055057

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z

Tiwari, S., Wee, H. M., & Daryanto, Y. (2018). Big data analytics in supply chain management between 2010 and 2016: Insights to industries. Computers & Industrial Engineering, 115, 319-330. https://doi.org/10.1016/j.cie.2017.11.017

Verdouw, C. N., Wolfert, J., Beulens, A. J. M., & Rialland, A. (2016). Virtualization of food supply chains with the internet of things. Journal of Food Engineering, 176, 128-136. https://doi.org/10.1016/j.jfoodeng.2015.11.009

Wernerfelt, B. (1984). A resource?based view of the firm. Strategic Management Journal, 5(2), 171-180. https://doi.org/10.1002/smj.4250050207

Wu, L., Yue, X., Jin, A., & Yen, D. C. (2016). Smart supply chain management: a review and implications for future research. The International Journal of Logistics Management, 27(2), 395-417. https://doi.org/10.1108/IJLM-02-2014-0035

Yu, W., Chavez, R., Jacobs, M. A., & Feng, M. (2018). Data-driven supply chain capabilities and performance: A resource-based view. Transportation Research Part E: Logistics and Transportation Review, 114, 371-385. https://doi.org/10.1016/j.tre.2017.04.002

Zhang, G., Yang, Y., & Yang, G. (2023). Smart supply chain management in Industry 4.0: The review, research agenda and strategies in North America. Annals of Operations Research, 322(2), 1075-1117. https://doi.org/10.1007/s10479-022-04689-1

DOI: https://doi.org/10.32535/ijabim.v10i2.3995