How does innovation affect performance in the supply chain? The mediating roles of supply chain collaboration and digital transformation

Purpose – Supply chain (SC) innovation (SCI) is vital for improving SC results, but the mechanisms by which it affects SC performance (SCP) have not been empirically examined. Drawing on resources orchestration theory (ROT) and socio-technical systems theory (STST), we posit that, in SC organizational systems, orchestrating the social and the technical subsystems is crucial for understanding how SCI improves SCP. We adopt supply chain collaboration (SCC) and digital transformation (DT) as representative of the social and technical subsystems respectively and hypothesize that they act as core mediators in the relationship between SCI and SCP, and reinforce each other’s effect on SCP. Design/methodology/approach – We employ structural equation modeling and regression analysis to test our hypotheses on survey data from 234 Chinese manufacturing firms. Findings – Results show that SCI has a positive impact on SCP through the mediating effects of SCC and DT. The hypothesized synergistic effects of SCC and DT in translating SCI strategic initiatives into superior SCP are also confirmed. Originality/value – We employ a theoretical framework based on the integration of ROT and STST to shed light on how an innovation-oriented strategic intent shared across the SC affects SCP. We encourage future scholars to employ this framework to deepen our understanding of the (inter)organizational processes by which strategic orientations other than SCI affect performance outcomes. In addition, showing that SCC and DT are complementary in their effect on SCP, our study enriches extant research on the relationships between interorganizational collaboration and the adoption of information technologies in the SC.