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How Does Digital Transformation Improve Supply Chain Performance: A Manufacturer’s Perspective

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  • Jae Wook Kim

    (Business School, Korea University, 145 Anam-ro, Seongbuk-gu, Seoul 02841, Republic of Korea)

  • Jin Hwa Rhee

    (College of Business, Daegu University, 201 Daegudae-ro, Gyeongsan-si 38453, Republic of Korea)

  • Chul Hung Park

    (Mahlkonig Korea, #1102, 109 Mapo-daero, Mapo-gu, Seoul 04781, Republic of Korea)

Abstract

A prominent research area pertains to the integration of digital technologies in corporate frameworks and their strategic utilization. In particular, as both intercompany dependencies in business activities and environmental uncertainty increase, digital transformation has become an important means of managing transaction relationships not only within but also between companies. The purpose of this study is to explicate the process of how digital transformation technology used among supply chain members can improve corporate performance and to identify the influencing variables for making good use of it. The findings have implications that can help companies invest time and money in digital innovation to achieve effective corporate performance. This research model analyzed data from 222 domestic manufacturing companies through structural equation model analysis. We found that the more developed the corporate culture and the higher the trust with partner companies, the more active the companies are in utilizing digital transformation. In addition, while digital transformation has a direct impact on corporate performance, we also confirmed the mediating effect of information sharing between companies, which can have a greater positive impact on corporate performance as its level increases. A notable result is that digital transformation significantly improves information sharing in low-trust corporate relationships. These results suggest that digital, non-face-to-face technologies can complement and strengthen relationships that have traditionally been formed through interpersonal relationships. This study compensates for the shortcomings of previous studies that verify the fragmentary achievements of digital transformation. It also has theoretical significance in that it hypothesizes and demonstrates the entire process of how digital transformation is activated in what type of environment and leads to corporate performance. In addition, although companies with a strong relationship of trust may find it easy to invest in innovation, there are practical implications that even new companies that do not have a relationship of trust should consider active use of digital transformation when conducting important transactions.

Suggested Citation

  • Jae Wook Kim & Jin Hwa Rhee & Chul Hung Park, 2024. "How Does Digital Transformation Improve Supply Chain Performance: A Manufacturer’s Perspective," Sustainability, MDPI, vol. 16(7), pages 1-16, April.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:7:p:3046-:d:1370857
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    References listed on IDEAS

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