Smart manufacturing for sustainable transformation in SMEs

Purpose Smart manufacturing promises operational efficiency and enhanced sustainability, yet SMEs frequently struggle to translate digital investments into tangible environmental outcomes. This study examines how organizational alignment, emergent socio-technical mechanisms and contextual factors influence the effectiveness of digital technologies in driving sustainability, with a focus on high-impact manufacturing sectors. Design/methodology/approach A qualitative multi-case research design was employed, drawing on in-depth semi-structured interviews with senior representatives from 16 manufacturing firms across diverse sectors and regions. Data were analyzed using thematic analysis in ATLAS.ti. Findings Digital technologies consistently improve operational efficiency, but their environmental impact is contingent on organizational alignment and socio-technical configuration. Governance maturity, digital accessibility, and sustainable agility emerged as key mediators, explaining why similar technologies produce divergent outcomes across firms. Sectoral and contextual differences further shape implementation trajectories, revealing that SMEs can achieve measurable sustainability gains through pilot-based, adaptive approaches even under resource constraints. The study highlights that sustainability outcomes are not an automatic by-product of technology adoption but require coordinated alignment of strategy, systems, culture and operational practices. Originality/value The research advances theory by extending the McKinsey 7S model into sustainability-driven digital contexts and integrating Lean and Agile practices into the concept of sustainable agility. It provides a novel socio-technical framework that explains how SMEs can convert digital adoption into measurable environmental outcomes, addressing gaps in literature dominated by analyses of large firms. By combining organizational, operational and contextual perspectives, the study offers both conceptual clarity and guidance for embedding sustainability into digital transformation initiatives in resource-constrained, high-impact manufacturing sectors.