Abstract
PurposeThis study aims to investigate digitalization as a performance driver in supply chains, especially the role of data analytics in the digitalization of procurement. The study investigates how digital procurement capabilities are linked to data analytics capabilities and supply chain operational performance and how this links to business success.Design/methodology/approachUsing operational and dynamic capabilities as foundations for data analytics capabilities, this paper studied the digital procurement capabilities and proposed the conceptual model and hypotheses for empirical testing. The collected industry survey data and structural equation method are then applied to test the hypotheses.FindingsThe study confirms positive and significant relationships among digital procurement capabilities, data analytics capabilities and supply chain performance. Digital procurement capabilities mediate the positive relationship between external data analytics capabilities and supply chain performance.Research limitations/implicationsThis study has some limitations that should be addressed. The empirical study was based on survey data from a questionnaire that was probably challenging for some respondent companies with low levels of digital procurement and data analytics. Also, it is necessary to adopt secondary data to measure business performance in future studies which reduces the effect of subjective bias.Practical implicationsFrom the managerial point of view, the findings highlight the importance of gaining knowledge from gathered data and digitalized processes. Managers must focus on data utilization capabilities to improve the operational performance expected from the digitalization of supply chain activities. In addition, managers need to consider exploiting of data through new creative approaches as part of standardized operations.Originality/valueThe present study contributes to existing knowledge by investigating the mediating role of data analytics capabilities between the digitalization of procurement and supply chain performance. The findings support a positive relationship between the data analytics capabilities and supply chain performance in digital upstream supply chain procurement processes. The present study also clarifies the impact and role of data analytics capabilities in digital supply chain development and success.
Highlights
For companies competing in the global market environment, the operational business processes that constitute the firms’ supply chains are characterized by excessive amounts of data and information exchange
Internal data analytics capabilities contribute to supply chain performance directly. This is in line with the study by Tortorella et al (2019) who found that process technologies have a significant positive association with supply chain performance
Statistically significant influence between the organizations’ capability to utilize internal data and digital procurement capabilities was not found. This implies that that analytical capabilities which increase organizational awareness of the efficiency of internal processes do not serve as drivers for the development of the digital procurement capabilities
Summary
For companies competing in the global market environment, the operational business processes that constitute the firms’ supply chains are characterized by excessive amounts of data and information exchange. To improve their competitive position, companies must be able to effectively use and convert available data into information useful for decision making and coordination in purchasing and supply chain management (SCM). Relations between data analytics capabilities, maturity of digital procurement processes, and performance of the business processes to understand impacts of IOT to the supply chain management are worth to further examined in which empirical studies has potential to identify and to establish related concepts (Frederico et al, 2019)
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