Enhancing Supply Chain: Exploring and Exploiting AI capabilities

Abstract

This work explores the role of artificial intelligence (AI) in enhancing supply chain efficiency and supply chain resilience with a view to examining the current controversies about whether the efficiency of AI-based supply chains at the expense of resilience in digitally fragmented landscapes. Continuing current researches which mostly consider AI as a single capacity, the paper identifies the presence of both exploratory and exploitative types of AI capabilities and evaluates the situational significance of the digital divide. The study is driven by the necessity to know how organizations can use AI to attain operational excellence and work ability in uncertain conditions. The design utilized a quantitative and cross-sectional study design with a survey data collected on the supply chain professionals. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed in testing the proposed conceptual model using the SmartPLS. The measurement reliability and validity were measured using Cronbach alpha, composite reliability and average variance extracted and structural relationships were measured using path coefficients, measure of mediation, moderation and model fit indexes. The findings indicate that both the explorative and exploitative AI functionalities impact the supply chain efficiency and resilience in a large positive manner. Exploitative AI has a greater influence on efficiency (β = 0.409, p < 0.001) whereas efficiency is a good predictor of resilience (β = 0.803, p < 0.001), which proves its mediating role. Digital divide has substantial direct impact on the efficiency and resilience, but the moderating impact of the digital divide is not found to be upheld. This paper provides a delicate insight into AI-based supply chains by empirically establishing efficiency as one of the mechanisms connecting AI competence with resilience and redefining the digital divide as a structural source of inequality. The results offer practical implications to managers and a solid basis of longitudinal and cross-country studies carried out in the future.

Keywords: Artificial intelligence capabilities; Explorative AI; Exploitative AI; Supply chain efficiency; Supply chain resilience; Digital divide; PLS-SEM