Transforming Supply Chain Management with Industry 4.0: Post-COVID-19 Digital Advancements

Industry 4.0 technologies (e.g., Blockchain, Internet of Things (IoT), Artificial intelligence (AI), cloud computing), offer strategic advantages to firms by enhancing cost efficiency and optimizing supply chain performance. The COVID-19 pandemic exposed significant vulnerabilities in global supply chains, prompting firms to adopt Industry 4.0 technologies to improve their supply chain performance. This study aims to examine the impact of Industry 4.0-based digitalization on firms’ supply chain performance, with a focus on integrating digital technologies into Cyber-Physical Systems (CPS). A positivist approach and quantitative research method was employed, using a structured questionnaire distributed to 319 Small and Medium-sized Enterprises (SMEs) in Malaysia’s Electrical and Electronics industry, with 152 valid responses analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM). The study’s research model suggests that Industry 4.0-based digitalization capabilities directly influences firms’ overall supply chain performance, moderated by antifragility capability and enhanced through process innovation and social capital. The study shows that digital transformation improves firms’ integration, communication, and collaboration capabilities using the Dynamic Capabilities View (DCV) and Relational View (RV) of an organization. These capabilities promote firms’ process innovation, antifragility, and social capital, which can lead to improved supply chain performance, post COVID-19. The study’s findings demonstrate the importance of firms advancing their digital competencies to remain competitive in turbulent business environments.