Supply Chain Optimisation, Digitalisation, and Performance: The Mediating Role of Integration in a Developing Economy

Md Delower Hossain & Salma Akter Laboni

Jan-Feb-Mar

Abstract
Rapid changes in technology, globalization, and exposure to external shocks have rendered global supply chains increasingly vulnerable, particularly in developing economies. This paper explores the connections between supply chain optimization practices, digitalization capabilities, supply chain integration, and supply chain performance, with a particular focus on the mediating role of integration in Bangladesh. The study employs Ordinary Least Squares (OLS) regression and mediation analysis on hypotheses based on survey data from 267 supply chain professionals in manufacturing, logistics, retail, and export-oriented industries. Results indicate that digitalization capabilities and supply chain optimization practices significantly improve supply chain performance. However, these effects are not uniform. The link between optimization practices and performance is fully mediated by supply chain integration, meaning that the benefits of optimization are limited unless supported by integrated planning, information sharing, and coordinated decision-making. Conversely, the impact of digitalization on performance is partially mediated by integration, showing that digital capabilities positively influence performance both directly and indirectly through internal decision-making and integration processes. Framing integration as a conditional transmission mechanism, rather than a presumed ability, contributes to supply chain capability theory and extends empirical research in a developing economy characterized by structural inefficiencies and coordination challenges. The findings offer practical insights for managers and policymakers aiming to translate operational and digital investments into sustainable performance outcomes.

Keyword: Supply chain optimisation; Digitalisation capability; Supply chain integration; Supply chain performance; Developing economy, Bangladesh

Research Area: Management/Business/Banking

Country: Bangladesh

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