International Journal of Modern Engineering and Management

Supply Chain Digitalisation, Operational Resilience and Firm Profitability: Longitudinal Evidence from Indian Manufacturing Firms

Author(s):

Deepa Srinivasan, Ravi Menon

Affiliation: Department of Operations and Supply Chain Management, Indian Institute of Technology Bombay, Mumbai, India

Page No: 54-59-

Volume issue & Publishing Year: Volume 3, Issue 6, 2026/06/12

Journal: International Journal of Modern Engineering and Management | IJMEM

ISSN NO: 3048-8230

DOI:

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Abstract:

The digitalisation of supply chain operations — encompassing real-time visibility platforms, IoT-enabled logistics tracking, AI-driven demand forecasting, and blockchain-based provenance verification — has been widely promoted as a route to simultaneous gains in operational resilience and cost efficiency. Yet rigorous longitudinal evidence on the magnitude, sequencing, and boundary conditions of these performance effects in emerging market manufacturing contexts remains scarce. This study examines the relationship between supply chain digitalisation investments and two distinct outcome constructs — operational resilience (the capacity to absorb, adapt to, and recover from disruptions) and firm profitability (EBITDA margin and return on assets) — across 198 Indian manufacturing firms over a five-year panel (FY2019–FY2024) spanning the COVID-19 disruption and its aftermath. Fixed-effects panel regression with instrumental variable estimation reveals that supply chain digitalisation intensity positively predicts operational resilience (β = 0.44, p < 0.001) with a one-to-two year lag, and that resilience in turn positively mediates the digitalisation–profitability relationship (indirect β = 0.28, 95% CI [0.19, 0.38]). Direct digitalisation-to-profitability effects are initially negative (Year 1: β = −0.17, p < 0.05) before turning significantly positive by Year 3 (β = 0.31, p < 0.001), reflecting implementation costs preceding performance returns. Sector moderates the digitalisation–resilience relationship: automotive and electronics firms show the largest resilience gains, while process industries (chemicals, FMCG) show attenuated effects, suggesting that supply chain architecture complexity mediates digitalisation returns. Firms that digitalise demand sensing before logistics visibility show faster profitability recovery post-disruption than those adopting the reverse sequence. These findings offer a sequenced implementation roadmap and realistic timeline expectations for Indian manufacturing executives investing in supply chain digital transformation.

Keywords:

supply chain digitalisation, operational resilience, firm profitability, panel data, fixed-effects regression, IoT, AI demand forecasting, Indian manufacturing, COVID-19, digital transformation

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