Digital Technologies for Social Supply Chain Sustainability: An Empirical Analysis Through the Lens of Dynamic Capabilities and Complexity Theory

Abstract

Digital technologies (DTs) have fundamentally transformed business landscapes, particularly supply chain (SC) management. This study aims to explore the role of Industry 4.0 DTs in advancing social sustainability in SCs, focusing on transparency, visibility, and traceability as key mediators. The study draws its theoretical foundation from dynamic capabilities theory and complexity theory, providing a dual perspective on the role of DTs in SC sustainability. The study employs survey data collected from 250 experts from the manufacturing sector in Pakistan to evaluate these relationships. The study utilizes partial least squares-structural equation modeling for hypothesis testing. Key findings indicate that Industry 4.0 technologies positively impact social SC sustainability, both directly and indirectly, through enhanced traceability, transparency, and visibility. Notably, traceability emerged as the strongest mediator, highlighting the critical role of tracking in ensuring ethical labor practices and preventing social issues such as modern slavery and unsafe working conditions. The research further suggests that adopting Industry 4.0 technologies can drive improvements in labor standards, environmental practices, and overall SC responsibility. The study contributes to the growing body of literature by demonstrating how Industry 4.0 technologies can serve as strategic tools for addressing social issues within SCs, thereby promoting compliance with global ethical standards and enhancing sustainability.