How Absorptive Capacity Mediates Supply Chain Effectiveness: A Quality Integration Approach to Boosting Operational Performance

Abstract

The importance of leveraging external knowledge to enhance quality management across the supply chain (SC) is well established in improving operational performance. However, empirical evidence on how this process unfolds remains limited. This study investigates the mediating impact of absorptive capacity (AC) on the relationship between supply chain quality integration (SCQI) and operational performance. We propose a five-step sequential mediation model, where customer and supplier quality integration indirectly affect operational performance by strengthening internal quality integration and AC. AC, evaluated through knowledge acquisition, assimilation, transformation, and exploitation, is pivotal in this process. The model highlights how external quality knowledge is assimilated and transformed into actionable insights, ultimately driving operational success. Using survey data from 264 pharmaceutical manufacturers, we applied Smart PLS to analyse the relationships. Our findings reveal the essential role of internal integration in translating and disseminating supply chain quality knowledge to enhance manufacturing capabilities. Effective communication, training, and collaboration facilitate the absorption of external insights, reinforcing operational performance. This research highlights the interconnected nature of quality integration practices across supply chain interfaces, emphasising that operational gains rely on first embedding external knowledge through internal quality integration. The originality and novelty of this study lie in uncovering a unique sequential mediation pathway, distinguishing it from prior research. By extending dynamic capability theory, we demonstrate how SCQI facilitates knowledge absorption through AC. Our findings challenge conventional views by positioning internal and external quality integration as synergistic dynamic capabilities, essential for driving superior operational performance.