Digital–Circular Synergies in Sustainable Supply Chain Management: An Integrative Framework for SME Performance Enhancement

This study examines the synergistic interaction between technology-driven digitalization and circular economy principles in enhancing sustainable supply chain performance among small and medium-sized enterprises (SMEs). Rather than examining digital technologies in isolation, we adopt an integrative systems perspective that conceptualizes digitalization as a multi-layered ecosystem comprising sensing (Internet of Things), intelligence (Artificial Intelligence and Big Data Analytics), verification (Blockchain), and coordination (Digital Collaboration Capability) layers. Through empirical analysis of 168 Tunisian SMEs across manufacturing and service sectors, this paper investigates the indirect impact of these complementary digital capabilities on sustainable supply chain performance, mediated by three dimensions of circular economy integration: waste reduction, resource efficiency, and sustainable design. The results indicate that digitalization has a positive influence on both environmental and economic performance, operating indirectly through the adoption of circular economy practices. By enhancing transparency, traceability, and operational efficiency, digital innovations reinforce circular economy practices, which consequently promote greater resilience and sustainability in supply chains. Sub-dimensional analyses reveal technology-specific mechanisms: IoT most strongly enables resource efficiency, AI and BDA drive waste reduction, Blockchain facilitates sustainable design, and Digital Collaboration Capability exhibits balanced effects across all circular dimensions. These findings underscore the critical role of integrated technological ecosystems, rather than isolated technology adoptions, in advancing sustainable supply chain management, particularly in resource-constrained SME contexts.