The Effects of Supply Chain Flexibility on Customer Responsiveness: the Mediating Role of Digitalization and Innovation Orientation

Abstract

This study aims at exploring the mediating role of digitalization and innovation orientation in examining the impact of Supply Chain Flexibility dimensions on Customer Responsiveness. The study adopts the existing concept of flexibility in the supply chain, and adds the construct of digitalization to the model and realigns the innovation orientation as a mediator in the model. The research is based on the Dynamic Capability View, which highlights the role of operational, technological and organizational capabilities in the dynamic market conditions. The method used was quantitative research, with a cross sectional survey design. A structured questionnaire with 31 items on the Likert scale was used to gather data, which included supply flexibility, internal flexibility, distribution flexibility, digitalization, innovation orientation and customer responsiveness. Partial Least Squares Structural Equation Modeling (PLS-SEM) with the software of SmartPLS was used for data analysis. The results suggest that digitalisation has a strong positive impact on customer responsiveness and distribution flexibility has a positive effect on digitalisation. In addition, the internal flexibility shows an important relationship with the innovation orientation. The mediation analysis results show that the relationship between distribution flexibility and customer responsiveness is mediated by digitalization, and that the relationship between internal flexibility and customer responsiveness is mediated by innovation orientation. The paper adds value from a theoretical perspective by extending the concept of flexibility-responsiveness, and from a practical perspective by providing managerial recommendations for combining flexibility, digitalization and innovation-inducing processes to enhance customer responsiveness in a dynamic supply chain.