The Interaction of Diversification Strategies, Resilience, and Digital Capabilities in Driving Supply Chain Sustainability in Saudi Arabia

This study explores the impact of supply chain diversification strategies (SCDS) on supply chain sustainability performance (SCSP), with focus on the mediating role of supply chain resilience (SCR) and the moderating effect of digital supply chain capabilities (DSC). The research objectives are (1) to assess whether SCR enables diversified supply bases to deliver sustainability outcomes and (2) to examine whether DSC strengthens the effectiveness of diversification in achieving environmental, social, and economic performance. A quantitative, cross-sectional survey was administered to 329 supply chain managers from medium-to-large manufacturing and retail firms in Saudi Arabia. Data were collected using multi-item 5-point Likert scale. Validity and reliability were ensured through EFA, Cronbach’s alpha, and composite reliability. Mediation and moderation effects were tested using PROCESS Macro in SPSS version 27. Findings revealed that 52% of the variance in supply chain sustainability performance (SCSP) was explained. (SCDS) had a strong positive effect on (SCR) (B = 0.612, p < 0.001), which in turn significantly predicted SCSP (B = 0.431, p < 0.001). The total effect of SCDS on SCSP was significant (B = 0.572, p < 0.001), while the direct effect remained strong (B = 0.308, p < 0.001). The indirect effect (a × b = 0.264, 95% CI [0.194, 0.343]) confirmed that SCR partially mediates the relationship, showing that diversification enhances sustainability both directly and indirectly through resilience. Theoretically, this study extends RBV and DC theory, while practically offering managers actionable insights on integrating diversification, resilience, and digitalization to balance supply continuity with long-term sustainability goals.