Enhancing supply chain resilience and economic performance through Industry 4.0 and ESG integration: the mediating role of sustainable practices

Purpose

The study aims to investigate the antecedents and outcomes of firms' supply chain resilience, focusing on technology and sustainability capabilities. The study examines Industry 4.0 and the firms' commitment to environmental, social and governance (ESG) as key resources for reshaping supply chains. Sustainability capabilities such as circular economy and sustainable supply chain design are also investigated to analyse their impact on supply chain resilience. The study measures the effect of supply chain resilience on a firm's economic performance as its competitive advantage outcome.

Design/methodology/approach

The dynamic capabilities view and the information processing view are utilised as theoretical backgrounds. A partial least squares structural equation model is implemented to test the model using data gathered from 261 enterprises.

Findings

The results indicate that sustainable supply chain design and circular economy contribute to supply chain resilience, which in turn enhances a firm's economic performance. Our results also demonstrate that Industry 4.0 and firms' ESG commitment affect both sustainable supply chain design and the circular economy. Still, the contribution of ESG commitment to circular economy practices only exists through full mediation of sustainable supply chain design.

Originality/value

The study contributes to the operations and sustainable supply chain management literature by enhancing our understanding of the impact of Industry 4.0 and ESG commitment on sustainable supply chain practices, as well as the influence of these capabilities on enhancing supply chain resilience and environmental performance. In particular, the study reinforces the power of supply chain resilience as a dynamic capability that can help supply chains respond effectively to disruptions, thereby significantly improving economic performance by reducing overall operational and material costs, as well as energy consumption, while enhancing profitability and revenue.