Digitizing the Chain: Effects of Supply Chain Digitalization on Efficiency in Indian Manufacturing SMEs

Abstract

Supply chain digitalization has become a key driver of productivity and competitiveness, particularly for Small and Medium-sized Enterprises (SMEs) operating in a dynamic manufacturing environment. This study investigates the impact of supply chain digitalization on the operational efficiency of manufacturing SMEs in India, an emerging economy where digital transformation is gaining momentum. Based on data from a structured survey of Indian manufacturing SMEs, Structural Equation Modeling (SEM) is used to analyze the impact of key dimensions of digitalization, such as digital integration, real-time data access, and information visibility in the supply chain, on their performance. The empirical findings indicate that digitalization has significant positive impacts on supply chain responsiveness, reducing lead times and operating costs, and improving coordination among supply chain partners. This research emerges in a context where digitized supply chains are better able to adapt to market fluctuations and customer demands. These analytical results offer practical insights for SME managers, technology providers, and policy makers seeking to promote digital adoption in the manufacturing sector. The research also contributes to the literature on digital transformation by providing evidence from an Indian SME context where resource constraints and infrastructure challenges sometimes hinder technology implementation.