Artificial Intelligence-Driven Supply Chain Capabilities: Enhancing Agility, Resilience, and Competitive Advantage in MSMEs

Abstract

Micro, small, and medium enterprises (MSMEs) face increasing disruptions arising from global health crises, geopolitical instability, and climate-related challenges, highlighting the urgent need for agile and resilient supply chain (SC) systems. Due to resource constraints and limited technological readiness, MSMEs are particularly vulnerable to such uncertainties. Drawing on the Resource-Based View (RBV), this study examines how artificial intelligence (AI) capabilities enhance competitive advantage (CA) by strengthening supply chain agility (SCA) and supply chain resilience (SCR), while considering the moderating role of competitive pressure (CP). A conceptual model is developed and empirically tested using data collected from 350 MSME owners and managers, analysed through Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that AI capabilities significantly improve both supply chain agility and supply chain resilience, and directly enhance competitive advantage. Furthermore, both agility and resilience contribute positively to competitive advantage, while competitive pressure strengthens the relationship between AI capability and competitive advantage. This study contributes to the literature by extending AI-enabled supply chain frameworks to the MSME context and highlighting the strategic role of AI as a driver of supply chain capabilities and firm competitiveness. It also offers practical insights for MSMEs to leverage AI technologies in enhancing agility, resilience, and sustainable competitive advantage in dynamic and highly competitive environments.