Digital investments alone won't cut it: manufacturers need supply chain partners too
A study of 188 Swedish manufacturers shows that going digital boosts performance only when paired with circular economy practices and coordinated supply chain partnerships. The finding challenges the assumption that companies can pursue sustainability and digitalization separately, forcing executives to rethink their transformation roadmaps.
Originaltitel: Twin transition in manufacturing firms: The role of supply chain orchestration and supply chain business model innovation
**Digital omställning kräver tidiga leverantörsavtal och omarbetad affärsmodell** Svenska tillverkningsföretag kan förbättra lönsamheten genom digitaliseringar, men bara om de samtidigt implementerar cirkulär ekonomi-praktiker. Det visar en enkätundersökning av 188 svenska industriföretag som Luleå tekniska universitet genomförde. Digitalinvesteringar ger resultat först när företaget aktivt samordnar sin leverantörskedja och anpassar sin affärsmodell. Denna kombination — kallad tvåfaldig omställning — skapar förutsättningar för att skalaupp cirkulära processer lönsamt. Studien pekar på kritisk timing: leverantörssamordning måste påbörjas tidigt i digitalprojekten, inte senare. Utan denna parallella insats riskerar företag att investera kapital i teknik som inte levererar prestationsvinsterna. För finansiella chefer betyder detta att digitalisering och cirkulär ekonomi inte är separata kostnadspositioner. De måste hanteras som integrerad strategi med fokus på partnerstyrning.
Twin transition, the concurrent development of digitalization practices and circular practices, are believed to be the key to firm performance. However, empirical evidence is currently scarce regarding the effect of twin transition on firm performance and the complementary practices that enable and realize it. This study draws on a survey of 188 Swedish manufacturing firms and employs PLS structural equation modelling to test the hypothesis. The results indicate that firm performance can be improved through digitalization practices but with circular practices as a mediator. Moreover, our results show a significant and positive moderation effect of supply chain orchestration and supply chain business model innovation as complementary mechanisms for enabling and realizing the process. This implies time sequencing between the two twin transition dimensions. These results carry theoretical implications for twin transition research and circular economy literatures. The results also provide novel managerial insights by showing that digital investments must be coupled with early orchestration of supply chain partners and aligned business model innovation to effectively scale circular practices and realize performance benefits.