Impact of Internet of Things Adoption on Organizational Performance: A Mediating Analysis of Supply Chain Integration, Performance, and Competitive Advantage

Abstract

Companies, in emerging economies and beyond, struggle to develop integration mechanisms that deliver supply chain performance and competitive advantages. Those striving for organizational performance by streamlining supply chain processes must assess the challenges and benefits of employing technologies for supply chain integration. This study’s objective is to analyze the supply chain integration antecedents required to enable supply chain performance, competitive advantages, and organization performance. Although prior research indicates that the Internet of Things (IoT), as one of the enabling technologies, plays an instrumental role in enhancing organization performance through supply chain integration, no empirical tests have been performed before. Therefore, this study examines the direct and indirect effects of the IoT’s impact on organizational performance through different mediating variables—supply chain integration, supply chain performance, and competitive advantages. This study uses survey data from Saudi Arabian companies that adopted IoT-based applications in their supply chains. The results from partial least squares structural equation modeling indicate that the benefits and challenges of IoT adoption significantly affect supply chain integration. Moreover, supply chain integration partially mediates the relationship between IoT, supply chain performance, and competitive advantages while supply chain performance and competitive advantages mediate the relationship between supply chain integration and organization performance. This study offers theoretical implications regarding how dynamic capabilities are associated with supply chain integration and how they influence organizational performance; it also reveals valuable managerial insights.

1. Introduction

Organizations nowadays search for advanced technological innovations as a solution to the complex and ever-changing business environment and customer demand, which is now seen as a powerful tool for achieving sustainable and long-term success [1]. Industry 4.0 (I4.0) is the current trend in the industry that represents the deployment of automation technologies in various industrial sectors, mostly comprising enabling technologies like cyber-physical systems (CPS) and Internet of Things (IoT) devices [2]. I4.0 requires effective integration between workers, machines, products, and consumers to provide benefits for businesses and to increase competitiveness in terms of reduced manufacturing costs, shorter lead times, and high product quality [3]. Moreover, digitally linked SCs enable faster data collecting, analysis, and decision making, potentially leading to more adaptive procedures and optimized workflows [4]. The impacts of digitalization on supply chain integration (SCI) are well documented, as are its effectiveness to actually improve supply chain management (SCM) and organization performance. Fatorachian and Kazemi [1] stated that I4.0 may lead to intelligent and integrated SCs where systems, machines, and people can integrate, interact, and manage each other. Real-time information-sharing with SC partners and within organizations (i.e., across different departments) using various technologies, including automatic sensors, etc., can help improve forecasting, planning, and tracking materials and products, which will lead to improvement in SC performance (e.g., improved efficiency and reduced costs) [5].

Successful completion of the supply chain process is typically measured with organizational performance indicators [6]. Implementing a digital supply chain can help organizations grow their businesses, enhance service quality, achieve competitive value, stay ahead of industry changes, and reduce expenses [7]. Moreover, using digital SCs, managers can make the correct inventory decisions—which are essential for every industry looking to maximize profits—including determining the optimal level of service to boost product demand and system profit, allocating funds for an automated monitoring procedure that eliminates human error, and establishing a safety stock and reorder point [8].

Supply chain management has significantly evolved with technological advancements, including the IoT and big data analytics [9]. Using the IoT and big data in the organization may provide predictive and real-time monitoring, resulting in enhanced efficiency, effectiveness, and sustainability enhancements [1]. The IoT can be used as a strategy to increase partners’ capacity for integration to improve supply chain performance [10]. Accordingly, the IoT is seen as a technical capability that must be integrated into logistical operations to be fully effective and efficient. The impact of these cutting-edge technical advancements is evident in organizations, posing a significant challenge alongside the implementation of Industry 4.0, which, in turn, enhances supply chain performance, which, in turn, improves corporate performance [3]. With the efficient transfer of information and the development of seamless corporate workflows, SCI is seen as crucial and significant for company success. It is achieved through cost reduction, improved service levels, and simplified decision making [6] and involves information sharing, collaboration, and agility. It is needed both “internally” (among departments) and “externally” (between providers and buyers) [11]. The Internet of Things (IoT) heavily influences supply chain integration, affecting numerous processes, suppliers, and customers. One of the countries that is aware of the importance of the IoT is Saudi Arabia. Saudi Arabia is making significant financial investments in IoT technology to achieve the goals outlined in Vision 2030.

Currently, the industry is divided into many segments, including technology vendors, systems integrators, service providers, and telecom firms. These segments are competing to obtain a portion of the market, which creates chances for local and global service providers and technology vendors to establish mutually advantageous relationships [12].

Statista [13] states that the IoT industry’s predicted revenue is expected to reach USD 10.23 billion by 2023. This prediction accurately represents the market’s expected expansion and capacity in Saudi Arabia. The IoT industry is projected to have a compound annual growth rate of 10.85% from 2023 to 2028, resulting in increased revenue. Furthermore, the 2021 report of the Communications, Space, and Technology Commission (CST) [14] states that the implementation of IoT solutions by some firms in Saudi Arabia has led to substantial achievements in several industrial areas, including education, energy, environmental management, healthcare, open data, smart cities, and smart manufacturing. These successes are expected to grow and reach their maximum potential in the coming years. The adoption of IoT in organizations has led to significant advantages, including increased productivity, enhanced safety and security, improved asset management, real-time analytics, cost optimization, and enhanced customer service. Therefore, this study examined how IoT adoption impacted supply chain performance and led to improved organizational performance in Saudi Arabia.

Research in the context of Industry 4.0 can be challenging because of data scarcity, emphasizing the need for theoretical applications [15]. The IoT is expected to play a critical role in Industry 4.0′s digitalization and automation, introducing smart products and intelligent services [16]. Furthermore, the IoT enhances competitiveness by streamlining operations and reducing product discontinuation risk [17]. It also refines supply chain processes and reduces costs [18]. IoT applications can help with real-time asset tracking, material flow tracking, transport handling, and risk management in early Industry 4.0. However, the goal is a self-sustaining supply chain platform with minimal human intervention. Moreover, accurate and timely information exchange via SC partner engagement and integration may increase business sustainability [16]. However, IoT adoption faces technological and societal barriers. Understanding the IoT’s opportunities and threats can boost supply chain efficiency and enhance organizational performance [17]. Therefore, this study uses data from IoT providers in Saudi Arabia to examine the benefits and challenges of IoT adoption for improving organizational performance through supply chain integration, which enhances supply chain performance and creates competitive advantages. Given the scarcity of information in this research area and drawing upon the resource-based view (RBV) theory and the concept of embracing technology in organizations, the primary aim of this research was to examine how firm resources (in terms of the IoT) can ease and enhance SC integration to ensure partners work together to improve organizational performance.

Based on Statista [13], the IoT industry in Saudi Arabia is projected to have a compound annual growth rate (CAGR) of 10.17% from 2024 to 2028, resulting in increased revenue. It demonstrates the significance of technology and digitalization in driving future industrial progress. Therefore, the motivation for doing this study stems from the research gap identified by Haddud et al. [18], which highlights the dearth of studies exploring the use of IoT in supply chains and its impact on organizational performance. Regrettably, none of the previous studies have analyzed the benefits and challenges of using the IoT for improving organizational performance when mediating by SCI, specifically by examining data from the Saudi IoT provider’s perspective. Hence, the primary novelty and contributions of this work are based on identifying and assessing the impact of IoT implementation on enhancing the efficiency of supply chains, hence bolstering overall organizational performance. Additionally, we will be providing a novel application for using IoT technology. Secondly, we will be introducing a new analysis that demonstrates the influence of an integrated supply chain (SC) on supply chain performance and competitive advantages, with a focus on its application in a real example, including the implementation of the Internet of Things (IoT) in the SC. Finally, we will be providing results and suggestions for managers by using the developed framework based on the IoT implementation and its effect on SCI, SCP, CA, and then on OP.

2. Literature Review and Hypotheses Development

2.1. Resource-Based View

The resource-based view suggests that firm competitive advantages and higher performance are derived from firm resources, including assets, capabilities, processes, information, and knowledge [19,20]. This view evaluates the evolution of logistics and supply chain management and their impact on competitiveness [20]. Dynamic capabilities involve a firm’s ability to integrate, create, and reconfigure skills to address fast-changing environments [21] (p. 516). Efficient management requires processes for information sharing, relationship management, technology transfer, and the adoption of advanced solutions like the IoT, Industry 4.0, and cloud computing [22]. A well-coordinated supply chain delivers quality products, innovation, and customer satisfaction, requiring human resource development, cutting-edge IT, effective strategies, and equitable profit and liability distribution. The resource-based view is a theoretical base to elucidate and forecast how a company might effectively employ and manage its resources to obtain a competitive edge [23]. Furthermore, according to this theory and the dynamic capabilities approach, the emergence of supply chain integration capabilities is crucial in determining business success [24]. This study considers the IoT as a resource and our focus is on comprehending its potential for managing and enhancing supply chain capabilities.

2.2. Organizational Capabilities Theory

This study is underpinned by organizational capability theory. Based on the resource-based view theory, the organizational capability viewpoint posits that a company must cultivate its own resources and capabilities to enhance performance [10]. IoT adoption may augment organizational capabilities and boost a firm’s current information and communication technology (ICT) capabilities configuration. Integration itself is a higher-level process competency that has a direct impact on business performance [25]. While internal integration may directly boost external integration, integration overall, as a higher-level process capability, can directly influence company performance [10]. Verona [25] outlines internal capabilities as internal communication, process integration, and job training while external capabilities include partner networks and external communication. Bharadwaj [26] posits that ICT implementation alone cannot enhance performance; instead, it must be coupled with other organizational resources, such as human and financial resources. Therefore, the IoT, similar to ICT, improves organizational integration capabilities.

2.3. The Internet of Things

Digitalization in the SCM context refers to using and applying external digital technologies, such as machine learning, the IoT, Big Data, and blockchain, with the goal of improving a firm’s SC and operational performance (OP) [27]. Because of the increased dependence on technologies, organizations should update SC infrastructure and operations to be more technology driven and to enhance integration. Therefore, organizations that apply digital SCs by investing in hardware, software, and human resources required for advanced technologies—such as artificial intelligence (AI), cloud computing, and the IoT—may increase their competitiveness by the long-term return on investment of enhanced revenue and business value [28].

In order for digital platforms to be effective, organizations must establish a framework of routines, processes, and collective actions, known as capabilities, that may mitigate the impact of digital information sharing on corporate performance [29]. These qualities may be developed when the necessary elements for success (i.e., enablers) are present [30]. The digital transformation encompasses several complications and trade-offs. However, by embracing the traceability of information of the procedures that the product underwent from its inception to its ultimate destination, it has the potential to enhance a supply chain, ultimately leading to improved performance outcomes in the supply chain [30]. By using the IoT and sensors, SCs will have the capability to disclose not only the whereabouts of a container but also its contents and provide real-time data on the platform [31].

IoT technology promises to improve supply chain business partners’ communication. Electronic gadgets allow everyone to access the Internet, a multi-media networking tool. Human-to-human communication is the key method for achieving goals. IoT technology aims to connect people and items over the Internet. For these objects to share information independently via the Internet, new data communication mechanisms would form human-to-things and things-to-things interactions [32]. Supply chain management with the IoT adoption has benefits, such as supply chain efficiency and visibility, but also has challenges, such as trust and organizational adjustment. Supply chain efficiency is using resources effectively to meet customer service expectations at minimal cost [33]; whereas, supply chain visibility is enabling product tracking from manufacturing to consumption [34]. Therefore, to gain benefits and competitive advantages, supply chains should have digital platforms to enhance their ability to monitor each cargo, each payment, and other relevant information. The IoT enables enhanced inventory management, real-time supply chain control, and logistical clarity [17,35]. On the other hand, according to Haddud et al. [18], many organizations choose not to embrace the IoT because management continues to underestimate the potential advantages of IoT adoption [17]. The most challenging aspect of the work is integrating new technology into the current organizational environments, structures, and models [18]. IoT adoption is accompanied by technological, social, and organizational challenges, including Internet availability, interoperability, complex software and hardware, big data management, public acceptance, technical expertise, legislation, mistrust, funding, return on investment, and diversity [36].

2.4. Supply Chain Integration

Supply chain integration refers to how a firm collaborates with its supply chain partners to manage intra- and inter-organizational activities to integrate various flows effectively and efficiently, including physical, information, and financial flows [3]. A strategic alliance is a “meaningful relationship” between an organization, its suppliers, and customers that facilitates interactions, sharing, or the cooperative development of resources or functionality to accomplish better benefits and competitive advantages by applying secure technologies and knowledge, expanding market entry, and distributing costs and risks [37]. Organizations that apply digital supply chain integration by investing in the hardware, software, and human resources required for advanced technologies—such as artificial intelligence, cloud computing, and the IoT—may increase their competitiveness through a long-term return on investment in the form of enhanced revenue and business value [28]. Therefore, to meet customer needs and expectations, companies require a high level of internal integration, measured by how well they can arrange their organizational practices, processes, and behaviors into cooperative, coordinated, synchronized, and controllable operations [38]. When the information is available to all parties through a unified platform, supply chain procedures and processes may be tracked remotely and decisions can be executed inside a facility [3].

Table 1. Leading studies on the digitalization and supply chain.

Digitalization	SCI	SCP	CA	OP	Article	Year	Country	Research Focus	Method
IoT benefits and challenges		X		X	Lee and Romzi et al. [17]	2022	Malaysia	This study proved that IoT adoption affects supply chain performance and organizational performance.	Smart-Pls was used to analyze the data collected from 63 manufacturing companies in Malaysia.
IoT benefits and challenges	X	X		X	De Vass et al. [10]	2018	Australia	The effect of IoT capabilities impacts multiple dimensions of supply chain process integration and, in turn, improves supply chain performance, as well as organizational performance.	The study used a self-reported survey instrument for data collected from 227 Australian retailers.
IoT capabilities	X	X			Shafique et al. [39]	2018	Pakistan	This study has developed and empirically tested the relationship between IoT capabilities, energy consumption behavior, supply chain integration, green training, and supply chain practices.	The data were collected from 250 retail industries in Pakistan
Digitalization		X		X	Lee and Azmi et al. [7]	2022	Malaysia	There are three main factors (digitalization, supply chain management, and technology implementation) that have a positive impact on organizational performance when mediated by supply chain performance. However, those three factors have no direct impact on organizational performance.	Smart-Pls was used to analyze the data collected from 56 manufacturing companies in Malaysia.
Digital transformation	X	X			Oubrahim et al. [40]	2023	Morocco	The digital transformation has a significant positive influence on supply chain integration and sustainable supply chain performance. Furthermore, supply chain integration directly and positively impacts sustainable supply chain performance, with a partial mediation effect on the relationship between digital transformation and sustainable supply chain performance.	The responses to the questionnaire were gathered from 134 professionals employed by multinational manufacturing firms in Morocco.
Digitalization	X		X		Setiawam et al. [41]	2023	Indonesia	Digitalizing the supply chain may lead to robust integration, enhanced energy efficiency, and improved efficacy for sustainability. Supply chain integration impacts both the green supply chain and supply chain resilience. Supply chain integration, green supply chain practices, and supply chain resilience impact a company’s competitive edge.	The partial least squares approach was used to analyze 108 East Java industrial company questionnaires.
Technological system	X		X	X	Rajaguru and Matanda [42]	2019	Australia	Supply chain partners’ technology systems, cultural values, and operational values improve SC process integration. Supply chain capabilities mediate the relationship between supply chain process integration and organizational performance.	The researchers surveyed 302 Australian food and hardware retailing supply chain managers and executives.
Technological challenges			X	X	Haseeb et al. [43]	2019	Malaysia	The social and technological challenges significantly contributed to enhancing the sustainable competitive advantage and sustainable company performance.	500 questionnaires were gathered from SME management staff and analyzed by structural equation modeling.
IT integration	X	X		X	Boubker [44]	2022	Morocco	The impact of IT integration fosters supply chain integration, including internal and external integration, to enable the flow of information and, consequently, enhance the supply chain and automotive firm performance.	The data were gathered from 177 intermediate and top-level managers of automobile companies.
Blockchain	X	X			Tan et al. [45]	2023	Malaysia	Supply chain integration plays a role in connecting blockchain visibility (information sharing, business intelligence collecting, and knowledge asset status) with supply chain performance in the digital transformation (DT) age.	A survey was completed by 71 operations and supply chain administrators who worked in semiconductor manufacturing firms in Malaysia.
Blockchain	X	X			Kamble et al. [46]	2023	India	Blockchain technology influences supply chain integration and indirectly influences sustainable supply chain performance.	Data were collected from 253 managers working in the Indian automotive industry.

summarizes the earlier studies that have investigated the digitalization in supply chain and ties up with the rationale of the present study. Table 1 demonstrates that there is a need for research and, hence, use of the gap in the literature to explore the research model that shows the impact of IoT adoption on organizational performance through multiple mediation paths. Moreover, Table 1 also indicates that there is a scarcity of prior research within the Saudi Arabian context.

2.4.1. The IoT and Supply Chain Integration

A supply chain encompasses material supply, manufacturing, sales, and reaching end-users and is a value-added process that involves both information and capital flow [6]. Abdel-Basset et al. [47] argue that IoT adoption can enhance inventory management, real-time supply chain oversight, and logistics transparency. The IoT facilitates real-time data capture and inter-firm communication, promoting integration [10]. Its inclusion in business architecture transforms data into valuable corporate services, fostering openness, reusability, and faster responses to supply chain changes due to the framework’s flexibility [6]. According to organizational capabilities theory, internal integration can significantly influence external integration [48,49]. Utilizing the IoT can boost cooperative planning, forecasting, and collaborations through improved information exchange, thereby enhancing supply chain integration.

The IoT, as a vital tool for business integration, has made a significant imprint on the modern digital industrial era, offering potential operational efficiency improvements [50]. Despite the opportunities and challenges it presents to supply chain management, including decision automation; integration of ICTs, such as RFID; wireless sensor networks; and mobile apps, some hurdles remain [17]. As per Haddud et al. [18], many organizations remain hesitant to adopt the IoT, primarily because management often fails to fully comprehend its potential benefits.

Thus, the following hypotheses are proposed to investigate the relationships between the benefits and challenges of IoT adoption and supply chain integration:

Hypothesis 1 (H1).

IoT adoption benefits have a positive impact on supply chain integration.

Hypothesis 2 (H2).

IoT adoption challenges have a positive impact on supply chain integration.

2.4.2. Supply Chain Integration and Supply Chain Performance

Supply chain performance is a systematic method for evaluating the efficiency and effectiveness of supply chain processes [6]; performance measurement provides managers with the feedback information necessary to accomplish this. Evaluating supply chain management is challenging because of its subjective nature as interpretations can vary among individuals. Despite this diversity, evaluating supply chain performance is critical because it can provide key data that are useful for upper management [17].

Firms use external digital technologies, such as machine learning, the IoT, big data, and blockchain, to enhance supply chain and operational performance [27]. Supply chain integration boosts efficiency, and people and systems collaborating with and coordinating supply chain activities can become more productive through the IoT. A supply chain may be optimized in terms of operating efficiency, quality, and flexibility, as well as delivery dependability and customer experience. Supply chain integration results from business managers’ willingness to integrate all operations in the company’s internal functions and those of external partners, including suppliers, distributors, and retailers, until the finished product reaches the end customer, making integration a measure of supply chain performance competitiveness [49,51]. Philsoophian et al. [52] analyzed 259 articles, revealing that firms are more resilient when suppliers and customers collaborate. Enhanced supplier–customer relationships, integrated business processes, and skilled employees can strengthen a company’s supply chain, reduce costs, and elevate quality. Siagian et al. [51] highlight that supply chain integration in Indonesia’s industrial businesses boosts organizational performance, especially when extensive product details and production plans are shared internally and externally. Moreover, performance is improved through supply chain integration that is digitally enabled [53]. Embracing the technology led to the enhancement of the SCI, which led to the enhancement of SCP [46]. Oubrahim et al. [40] showed that digital transformation (DT) positively influences the SCI and the overall sustainable supply chain performance (OSSCP) and the mediating effect of SCI between DT and OSSCP.

The IoT may enhance how people and systems work together, plan supply chain operations, and analyze acquired data [10]. It can enhance supply chain integration, leading to improved supply chain performance. De Vass et al. [10] find that IoT capabilities in Australian retail firms favorably and significantly impact supply-chain-related process integration, which, in turn, improves supply chain and organizational performance. Shafique et al. [39] find that the IoT improves supply chain integration through supplier and customer integration, which subsequently leads to green supply chain performance. Thus, IoT supply chain integration is expected to impact supply chain performance [10]. The proposed hypotheses are as follows:

Hypothesis 3 (H3).

Supply chain integration has a positive impact on supply chain performance.

Hypothesis 4 (H4).

Supply chain integration mediates the relationship between IoT benefits and supply chain performance.

Hypothesis 5 (H5).

Supply chain integration mediates the relationship between IoT challenges and supply chain performance.

2.5. The IoT, Supply Chain Integration, and Competitive Advantages

As supply chain management evolves, several shortcomings of conventional methods become more evident [54]. The primary drivers for a company’s investment in ICT are to gain a competitive advantage, reduce costs, optimize production and delivery times, and invest in new technologies. Integrating the IoT in supply chain management can provide a competitive advantage when paired with a robust ICT capacity for integration, learning, and knowledge management [16]. In the face of challenging competitive circumstances and evolving consumer needs, it is essential for supply chain partners to enhance their level of integration. Integrated supply networks provide a higher level of process sophistication and distribution efficiency compared to supply chains that struggle to successfully integrate their partners [55].

In addition to the operational advantages associated with supply chain integration, it is anticipated that this practice will provide organizations with a competitive edge owing to its inherent difficulty in replicating [56]. Therefore, for comprehensive performance in a competitive business climate, companies need to integrate various skills and processes [20]. In their empirical analysis of the Indonesian manufacturing sector, Sinaga et al. [57] conclude that supply chain integration has a favorable impact on competitive advantage. Similarly, Setiawan et al. [41] demonstrate that using digitalization inside a supply chain may provide significant benefits in terms of enhanced integration, improved energy efficiency, and increased overall effectiveness, which enable survival and success in the modern business landscape by facilitating a competitive advantage. Thus, the following hypotheses are posited:

Hypothesis 6 (H6).

Supply chain integration has a positive impact on an organization’s competitive advantage.

Hypothesis 7 (H7).

Supply chain integration mediates the relationship between the benefits of the IoT and an organization’s competitive advantage.

Hypothesis 8 (H8).

Supply chain integration mediates the relationship between the challenges of the IoT and an organization’s competitive advantage.

2.6. Supply Chain Performance, Competitive Advantages, and Organizational Performance

In the current business landscape, the focal point of competition has transitioned from organizations to supply chains. Consequently, within this new competitive paradigm, enhancing supply chain performance has emerged as a crucial factor in gaining a competitive advantage. An organization’s performance practices play a crucial role in determining the most effective approaches for achieving progressive supply chain performance [58]. Enhancing a company’s performance is contingent upon its ability to achieve competitiveness, which can only be realized by adopting appropriate practices. The interdependence between an organization’s practice and its performance is evident as supply chain performance is consistently influenced by an organization’s interactions with its supply chain partners. Multiple studies suggest that internal integration enhances external integration, thereby directly and indirectly boosting firm performance [48]. Multiple studies [20,42,43] have asserted that supply chain integration improves competitive advantage and operational efficiency, leading to better organizational performance. Notably, Koc et al. [56] find that supply chain integration and supply chain agility have a partial mediating effect on the relationship between environmental uncertainty and competitive advantage. Accordingly, the following hypotheses are formulated:

Hypothesis 9 (H9).

An organization’s competitive advantage has a positive impact on its performance.

Hypothesis 10 (H10).

An organization’s competitive advantage mediates the relationship between supply chain integration and organizational performance.

According to Mishra et al. [59], monitoring supply chain operations in real time can be accomplished using the IoT. This encompasses the entire process, starting with product creation and concluding with product delivery to end users. Providing precise and timely information via the IoT helps organizations effectively adapt to market fluctuations. Li et al. [60] also believe that implementing supply chain practices, like the extent and caliber of information exchange, can potentially enhance operational performance. Further, Choudhury et al. [61] state that supply chain performance may affect a firm’s performance by improving market share; in particular, it can influence a firm’s financial performance by mitigating supply chain costs. This observation is further supported by the research conducted by [62], the performance of the supply chain is a key requirement for the generation of value. Moreover, Boubker [44] proved that technology and the use of automotive supply chain integration (SCI) significantly contribute to enhancing supply chain performance (SCP) and overall firm performance. Thus, we hypothesize that:

Hypothesis 11 (H11).

Supply chain performance has a positive impact on organizational performance.

Hypothesis 12 (H12).

Supply chain performance mediates the relationship between supply chain integration and organizational performance.

2.7. Conceptual Model

This study explores the impact of IoT adoption on organizational performance by examining the mediating role of supply chain integration, performance, and competitive advantages (see Figure 1).

3. Materials and Methods

Employing a deductive approach, we test theoretical patterns with new empirical data to discern causal relationships between variables [63]. We utilize a quantitative methodology that relies on data collection and analysis via statistical methods [64]. A mono-quantitative approach aids in testing the relationships between quantitatively evaluated variables with statistical techniques. Consequently, the hypotheses are assessed through logical arguments and statistical evidence [63]. The data were collected from participants in the IoT provider sector in Saudi Arabia via an online survey, a strategy frequently used in business and management research.

3.1. Measurement Scale

The survey instrument, adapted for supply chains, sourced measures from prior studies. IoT adoption benefits and challenges measurement items were adapted from De Vass et al. [10] and Haddud et al. [18]. In this study, supply chain integration (SCI) is considered a one-dimensional construct, following prior research [65,66]. Supply chain integration measurement items were adapted from Huo [48] and Rai et al. [67]. Organizational performance (OP) measurement items were adapted from Lee and Azmi et al. [7] and Zhu et al. [68]. Supply chain performance (SCP) measurement items were adapted from Kaliani Sundram et al. [69] and Lee and Romzi et al. [17]. Meanwhile, Vitorino Filho and Moori’s [70] scale was utilized to assess competitive advantage (CA). Prior to administering the survey, item reliability and validity were tested. To account for cultural nuances, items underwent back-to-back translation and expert review [71]. The survey, available in Arabic and English, employed a seven-point Likert-type scale (see Appendix A).

3.2. Sampling Method and Data Collection

This study used a nonprobability sample targeting IoT providers in Saudi Arabia. We opted for snowball sampling since it is more applicable to small populations like IoT providers [72]. However, no single sampling method is perfect [64]. We employed web-based surveys for their convenient access and cost-effectiveness [73]. As the survey instrument was developed to ensure the clarity and comprehensibility of the questions, a pilot study was conducted. During this process, we invited five mid-level executives from different industries who were not familiar with this study to review and provide feedback on the survey questions. Based on this pilot study process, some minor adjustments were made.

Respondents volunteered to take part in the research. We incorporated a preliminary inquiry in our survey: “Are you willing to partake in this survey and furnish the most optimal response to each question?”. A survey was created using Google Forms, along with a cover letter outlining the study goals. We assured the participants that their information would be kept confidential to safeguard their privacy. There are 143 registered IoT-focused emerging technology companies in Saudi Arabia [74]. The authors contacted the businesses through electronic communication channels, including email and other social media platforms like WhatsApp in the first round. Then, we sent a soft reminder email asking the IoT providers to fill out the survey. The participants demonstrated their capability to respond to the survey and we received 49 responses. Then, we eliminated 4 because of not being complete and the remaining number was 45 responses. The research established a strong basis for measurement by considering the validity and reliability of previous measurement items, addressing non-response bias.

The questionnaire comprised two parts: Part One was composed of demographic items, including the number of full-time employees, company age, past 12 months’ sales revenue, job level, and COVID-19 impact. Part Two contained the measurement items featuring a set of questions derived from previous scales to measure the model’s components. The instrument’s reliability and proposed correlations were subsequently validated.

3.3. Data Analysis

Partial least squares structural equation modeling (PLS-SEM) was used to analyze the data through SmartPLS 3 software [75]. The PLS-SEM method is recommended by many researchers as it facilitates the estimation of complex models with numerous constructs, indicator variables, and structural pathways without needing distributional assumptions about the data [76]. It is often used with smaller sample sizes [77,78], making it suitable for this study given its small sample size and the complexity of the model, which includes second-order constructs.

The SEM analysis involved two stages [75]. First, the measurement model was assessed to ascertain construct reliability and validity. Then, the structural model was examined to test the hypothesized relationships.

4. Results

4.1. Descriptive Analysis

The IoT is considered an emerging technology in the Saudi Arabian context. According to the Communication and Information Technology Commission (CITC), Saudi Arabia has 143 registered IoT-focused emerging technology companies [74]. This study involved 45 participants, achieving a response rate of 31.5%, which surpasses the minimum 30% required for online surveys and sufficiently supports hypothesis testing [79].

Table 2. Demographic profile (N = 45).

Items	N	%
Number of full-time employees
50 or less	2	4.4
51–500	12	26.7
501 or more	31	68.9
Age of the company (in years)
10 or less	4	8.9
11–40	32	71.1
40 or more	9	20
Sales revenue (in SAR) for the last 12 months
SAR < 50 million	1	2.2
SAR 51–250 million	6	13.3
SAR 251–500 million	16	35.6
SAR 501 million or more	22	48.9
Job level
C-Level Executive	2	4.4
President/Vice President	1	2.2
Director	6	13.3
Senior Manager	12	26.7
Manager	15	33.3
Others	9	20
COVID-19 impact
Not at all	9	20
Moderate	31	68.9
Severe	5	11.1

outlines the participants’ demographics. Most (68.9%) companies had 501 or more full-time employees and the most common company age range was 11–40 years (71.1%). Regarding sales revenue, 48.9% earned SAR 501 million or more in the past year. Managers constituted 33.3% of respondents, of which 68.9% indicated COVID-19 had had a moderate impact on their company.

4.2. Common Method Bias

A model may be exposed to common method bias (CMB) if its inner variance inflation factor (VIF) exceeds 3.3, indicating pathological collinearity [75]. The model may be said to be free of CMB if all inner model VIF values from a complete collinearity test are more than or equal to 3.3 [73]. The measured latent marker variable technique [80] may also be used to detect common method variance (CMV) issues in PLS-SEM models [75]. A random variable was used to test CMB. The outer VIF value was <5 and the inner VIF value was <3.3. Therefore, no CMB or CMV was detected [78].

4.3. Measurement Model

To examine reflective-formative higher-order measurement models, in the first step, the model is estimated without second-order constructs to obtain first-order construct scores [75]. The second step removes the first-order constructs from the structural model and uses their construct scores to predict the second-order constructs [81].

4.3.1. Validating Lower-Order Constructs

Table 3. Measurement model.

	Items	Factor Loading (FA)	Variance Inflation Factor (VIF)	Cronbach’s Alpha (CA)	Composite Reliability (CR)	Average Variance Extracted
						(AVE)
IoT benefits Visibility of supply chain	VIS3	0.781	1.528	0.746	0.838	0.565
	VIS5	0.739	1.432
	VIS6	0.76	1.338
	VIS7	0.724	1.474
IoT benefits Supply chain efficiency	EFF1	0.852	3.012	0.893	0.919	0.653
	EFF2	0.75	2.123
	EFF3	0.795	2.058
	EFF4	0.76	2.07
	EFF5	0.859	2.946
	EFF6	0.828	2.78
IoT challenges Organizational adjustment	ORG1	0.902	2.922	0.882	0.917	0.734
	ORG2	0.853	2.375
	ORG3	0.785	1.977
	ORG5	0.882	2.173
IoT challenges Technology trustworthiness	TRW2	0.92	3.179	0.898	0.936	0.831
	TRW3	0.891	2.313
	TRW5	0.923	3.237
Supply chain integration	SCI1	0.818	3.987	0.923	0.937	0.653
	SCI11	0.866	3.401
	SCI13	0.706	2.856
	SCI14	0.761	2.934
	SCI3	0.835	3.078
	SCI6	0.806	3.351
	SCI7	0.793	3.262
	SCI9	0.867	3.739
Supply chain performance	SCP15	0.809	1.863	0.863	0.907	0.709
	SCP2	0.862	2.305
	SCP4	0.859	2.292
	SCP7	0.836	2.038
Competitive advantage	CA1	0.838	3.386	0.892	0.917	0.649
	CA2	0.808	3.861
	CA3	0.815	3.032
	CA4	0.883	3.577
	CA5	0.752	2.134
	CA6	0.728	1.848
Organizational performance	OP3	0.846	1.87	0.791	0.878	0.705
	OP5	0.829	1.524
	OP6	0.844	1.739

displays the hypothesized model. This step involved assessing factor loadings, with values above 0.708 considered acceptable as they explain over 50% of the indicator’s variation, indicating adequate item dependability [76]; all items and indicators exceeded 0.50. Furthermore, the VIF values were below the threshold of 5 [78]. Several items, including ORG4; SCI2, 4, 5, 8, 10, 12, and 15–17; OP 1.2.4. and 7; SCP1, 3, 5, 6, 9, and 8–14; TRW 1.4.6; and VIS1, 2, and 4, were removed from the model based on their high VIF values to mitigate multicollinearity.

The internal consistency of the variables was checked using Cronbach’s alpha and composite reliability. Cronbach’s alpha values above the cut-off limit of 0.70 were considered, ranging from 0.923 to 0.746 [82]. Additionally, composite reliability, with all values above the accepted level (>0.70), ranged from 0.937 to 0.838 [77]. Both indicators met the required threshold, confirming construct reliability.

The convergent validity of the constructs was assessed using the average variance extracted (AVE). Table 3 shows that all AVEs exceeded 0.5, indicating that the constructs explain at least 50% of the variance of their items [76].

According to Fornell and Larcker [83], discriminant validity among latent variables is shown when the square root of each AVE is greater than its correlation with other variables. Discriminant validity was assessed using the Fornell–Larcker criterion [77]. As shown in

Table 4. Discriminant validity (Fornell–Larcker).

	CA	EFF	SCI	OP	ORG	SCP	TRW	VIS
CA	0.805	0.327 h	0.756 h	0.739 h	0.523 h	0.879 h	0.656 h	0.604 h
EFF	0.283	0.804	0.665 h	0.658 h	0.856 h	0.58 h	0.621 h	0.822 h
SCI	0.704	0.547	0.837	0.875 h	0.83 h	0.86 h	0.74 h	0.672 h
OP	0.671	0.568	0.759	0.785	0.777 h	0.653 h	0.736 h	0.626 h
ORG	0.494	0.759	0.725	0.695	0.761	0.768 h	0.644 h	0.685 h
SCP	0.753	0.512	0.756	0.576	0.705	0.739	0.767 h	0.822 h
TRW	0.604	0.547	0.656	0.669	0.593	0.661	0.911	0.711 h
VIS	0.517	0.692	0.561	0.536	0.593	0.699	0.612	0.692

Note: EFF = efficiency; VIS = visibility; ORG = organization adjustment; TRW = trustworthiness; SCP = supply chain performance; SCI = supply chain integration; OP = organizational performance; CA = competitive advantage. ^h: Heterotrait–Monotrait ratio. Source: Author’s own work.

, each construct shares more variance with its indicators than with any other construct. Moreover, Table 4 displays how discriminant validity is assessed by analyzing the heterotrait–monotrait (HTMT) ratio. All values have a magnitude less than 0.9 [83].

4.3.2. Validating Higher-Order Constructs

This study’s higher-order constructs are IoT benefits and challenges. Each was based on two lower-order constructs to demonstrate its validity as a higher-order construct in terms of outer weights, outer loading, and VIF. The outside weights were determined to be important [84]. Additionally, each of the lower-order constructs had outside loadings larger than 0.50 [85]. VIF values were tested to determine collinearity. All VIF values were lower than the suggested threshold of 5 [82]. Since all criteria were met, higher-order construct validity was established. The results are shown in

Table 5. Higher-order construct validity.

HOC	LOCs	Outer Weight	T Statistics	p Value	Outer Loading	VIF
IoTB	EFF	0.704	3.463	0.001	0.958	1.785
	VIS	0.383	1.715	0.086	0.850	1.785
IoTC	ORG	0.839	4.484	000	0.989	1.996
	TRW	0.212	0.945	0.345	0.805	1.996

Note: HOC = higher-order constructs; LOC = lower-order constructs; IoTB/IoTC = benefits and challenges of IoT adoption; EFF = efficiency; VIS = visibility; ORG = organization adjustment; TRW = trustworthiness; VIF = variance inflation factor. Source: Author’s own work.

.

4.4. Structural Model

Figure 2 depicts the structural model. The R² coefficient, commonly known as the coefficient of determination, determines the model’s prediction accuracy and is also known as the in-sample predictive power. R² values vary from 0 to 1, with higher numbers suggesting stronger explanatory power. R² values of 0.75, 0.50, and 0.25 might be regarded as significant, moderate, and weak, respectively [76,86]. As per

Table 6. R² and Q² results.

Constructs	R2	Adjusted R2	SSO	SSE	Q2 (= 1−SSE/SSO)
CA	0.203	0.184	270	138.328	0.488
SCI	0.643	0.626	360	175.248	0.513
OP	0.707	0.693	135	82.458	0.389
SCP	0.525	0.514	180	89.335	0.504

Note: SCP = supply chain performance; SCI = supply chain integration; OP = organizational performance; CA = competitive advantage. Source: Author’s own work.

, the R² (and adjusted R²) coefficient values of the constructs were as follows: CA 0.203 (0.184); SCI 0.643 (0.626); OP 0.707 (0.693); and SCP 0.525 (0.514). The blindfolding process was used to evaluate Stone–Geisser’s Q², which was used to determine the model’s predicted accuracy. As a general rule, Q² values should be greater than zero for a certain endogenous construct to demonstrate the structural model’s prediction accuracy for that construct. Generally, Q² values greater than 0, 0.25, and 0.50 represent the path model’s minor, medium, and substantial predictive importance, respectively [76,86]. As demonstrated in Table 6, Q² surpasses zero in all circumstances, thus indicating approval [86].

4.5. Hypotheses Testing

In the SmartPLS 4.0 bootstrapping procedure, 5000 resamples were used to evaluate the hypotheses using structural path coefficients (

Table 7. Structural path estimates.

Hypotheses	B Values	Standard Deviation (STDEV)	T Statistics (|O/STDEV|)	p Values
H1: IoTB → INT	0.581	0.133	4.374	000 ***
H2: IoTC → INT	0.298	0.131	2.277	0.023 *
H3: SCI → SCP	0.724	0.103	7.001	000 ***
H6: SCI → CA	0.45	0.155	2.915	0.004 **
H11: SCP → OP	0.389	0.182	2.14	0.032 *
H9: CA → OP	0.532	0.132	4.031	000 ***

Note: IoTB/IoTC = benefits and challenges of IoT adoption; SCP = supply chain performance; SCI = supply chain integration; OP = organizational performance; CA = competitive advantage. * p ≤ 0.05, ** p ≤ 0.01, *** p ≤ 0.001. Source: Author’s own work.

). Higher path coefficients were considered more powerful predictors with statistical significance at ≤0.05 [87].

H1 investigated the positive impact of IoT adoption benefits on SCI. The results supported this relationship, indicating that IoT benefits significantly affected SCI (β = 0.581, t = 4.374, p = 0.000). H2 explored the positive impact of IoT adoption challenges on SCI; the results indicated a significant effect (β = 0.298, t = 2.277, p = 0.023), supporting H2.

H3 examined the positive impact of SCI on SCP and the results showed a significant effect (β = 0.724, t = 7.001, p = 0.000), supporting H3. H8 assessed the positive impact of SCI on CA; the results also supported this relationship (β = 0.4450, t = 2.915, p = 0.004), confirming H8.

The positive relationship between CA and OP (H9) was supported as CA had a significant effect on OP (β = 0.532, t = 4.031, p = 0.000). Additionally, H11, proposing a positive impact of SCP on OP, was supported, with SCP significantly affecting OP (β = 0.389, t = 2.140, p = 0.032). Therefore, all direct hypotheses were supported.

4.6. Mediation Analysis

Mediation analysis was performed to examine the mediating role of SCI on the relationships between IoT adoption benefits and challenges and SCP and CA (H4 to H7). The mediating effects of CA and SCP in the relationship between SCI and OP (H10 and H12) were also tested. The results, presented in

Table 8. Mediation results.

Path	Direct Effects			Indirect Effects
		Coeff.	p-Value	Coeff.	SD	T Value	p-Value	BI [2.5%; 97.5%]
IoTB → SCI →SCP	IoTB → SCI	0.581	0.000	0.421	0.118	3.571	0.000	0.179–0.641
	SCI → SCP	0.724	0.000
IoTB → SCI → CA	IoTB → SCI	0.581	0.000	0.262	0.101	2.581	0.010	0.070–0.469
	SCI → CA	0.450	0.004
IoTC → SCI → SCP	IoTC → SCI	0.298	0.024	0.216	0.108	2.009	0.045	0.038–0.453
	SCI → SCP	0.724	0.000
IoTC → SCI → CA	IoTC → SCI	0.298	0.024	0.134	0.097	1.381	0.167	0.009–0.399
	SCI → CA	0.450	0.004
SCI → SCP → OP	SCI → SCP	0.724	0.000	0.282	0.143	1.976	0.048	0.022–0.570
	SCP → OP	0.389	0.029
SCI → CA → OP	SCI → CA	0.450	0.004	0.240	0.114	2.108	0.035	0.062–0.487
	CA → OP	0.532	0.000

Note: IoTB/IoTC = benefits and challenges of IoT adoption; SCP = supply chain performance; SCI = supply chain integration; OP = organizational performance; CA = competitive advantage. Source: Author’s own work.

, indicate significant direct effects of IoT benefits on SCI (β = 0.581, t = 4.374, p < 0.001) and of SCI on SCP (β = 0.724, t = 7.034, p < 0.001).

The indirect effect of IoT benefits on SCP through SCI was also significant (β = 0.421, t = 3.571, p < 0.001), supporting the partial mediation of SCI in the relationship between IoT benefits and SCP (H4). Similarly, the direct effect of IoT challenges on SCI was significant (β = 0.298, t = 2.259, p = 0.024), along with the significant effect of SCI on SCP (β = 0.724, t = 7.034, p < 0.001).

The indirect effect of IoT challenges on SCP through SCI was significant (β = 0.216, t = 2.009, p = 0.045), providing support for the partial mediation of SCI in the relationship between IoT challenges and SCP (H5).

The results indicate significant direct effects of SCI on CA (β = 0.450, t = 2.868, p = 0.004). The indirect effect of IoT benefits on CA through SCI was also significant (β = 0.262, t = 2.581, p = 0.010), supporting the partial mediation of SCI in the relationship between IoT benefits and CA (H6). However, the indirect effect of IoT challenges on CA through SCI was not significant (β = 0.134, t = 1.381, p = 0.167), indicating that SCI does not mediate the relationship between IoT challenges and CA; thus, H7 was not supported.

The results indicate significant direct effects of CA on OP (β = 0.532, t = 4.111, p < 0.001) and of SCI on SCP (β = 0.724, t = 7.034, p = 0.000). Additionally, the direct effect of supply chain performance on organizational performance is significant (β = 0.389, t = 2.18, p = 0.029). Further, the indirect effects of SCI on OP through CA (β = 0.240, t = 2.108, p < 0.05) and through SCP (β = 0.282, t = 1.976, p < 0.05) are significant. These results support H10 and H12, indicating that both CA and SCP partially mediate the relationship between SCI and OP.

5. Discussion

Previous studies suggest that digital technology is critical for enhancing supply chain efficiency. They have showcased the potential benefits of integrating digital technology to enhance overall organizational performance, specifically in supply chain management. Undoubtedly, the IoT is rapidly becoming deeply rooted in business IT systems. It is widely explored and used in every aspect of supply chains. The IoT enhances and strengthens IT systems. Despite the ease of equipping devices with sensors, organizations rely on IoT-driven business models. The IoT is integral to a comprehensive digital strategy designed to enhance efficiency and effectiveness. A digital strategy is intended to facilitate and enable organizational transformation.

This research investigates the potential for supply chains to enhance organizational performance by implementing and adopting the IoT via SC integration as a way to enhance their SC competitive advantages and performance. This study focused on the IoT providers in Saudi organizations to establish and validate the hypothesized positive and significant direct relationships between these constructs, including examining the mediating effects.

In answering the first research question, this empirical analysis demonstrated that IoT adoption’s benefits and challenges enhance supply chain integration, aligning with the findings of De Vass et al. [45], Lee and Romzi, et al. [17], and Tan et al. [45]. Additionally, the results revealed that supply chain integration positively affects supply chain performance, competitive advantage, and organizational performance. According to Abdallah et al. [88], supply chain integration is unique and gives companies a competitive market advantage because of the teamwork, collaboration, and cooperative culture that exists within it. Moreover, its mediating role in the relationship between IoT adoption and performance emphasizes implementing a comprehensive and linked strategy to manage production, operations, and supply chain activities. By combining the IoT with supply chain integration, organizations may enhance their ability to adapt to market dynamics, meet consumer needs, and more efficiently address competitive challenges.

The positive impact of IoT-enabled supply chain integration on supply chain performance also influences organizational performance, as reported by De Vass et al. [10] and Lee and Romzi et al. [17]. Organizations that use the technology to support supply chain integration may increase their SC performance significantly, which leads to enhanced organizational performance [44,46]. As stated by Boubker [44] increased integration of supply chain (SC) operations results in improved performance of the company. Additionally, SCI is proposed as a means to elevate the degree of SCP. Partners in the SC are encouraged to strengthen the integrative SC for the benefit of both the SC and the firm. This can be achieved through increased communication and collaboration amongst members of the SC by implementing an integrated system for sharing information and data, data input into supplier sourcing decisions, and support for customer marketing initiatives.

An IoT-powered digital infrastructure allows organizations to integrate supply chains with suppliers and consumers. Thus, those organizations can communicate effectively and assess consumer demand and product preferences through their integration with suppliers. Furthermore, inter-functional integration inside firms would benefit from IoT capability, through connecting consumers and suppliers that deliver greater advantages, according to the survey responses.

According to Haddud et al. [18] and Abdel-Basset et al. [47], IoT adoption can enhance product monitoring, traceability, inventory management, and operational efficiency. Supply chain adaptability to the rapid rise of the IoT offers significant benefits and competitive advantages in the evolving business climate [18]. Further, supply chain integration’s positive impact on supply chain performance aligns with previous research [39,89], providing answers to the second research question.

IoT adoption directly affects supply chain integration and indirectly influences supply chain performance, with partial mediation through supply chain integration, as previously demonstrated [39]. Additionally, IoT adoption has an indirect impact on competitive advantage, partially mediated by supply chain integration, as found in a previous study [20]. The relationship between IoT adoption benefits and competitive advantage was significantly mediated by supply chain integration while the mediating effect of supply chain integration on the relationship between IoT adoption challenges and competitive advantage was non-significant. De Vass et al. [10] argue that IoT technology is necessary to achieve a higher level of supply chain integration. This technology helps bridge the gap between the physical and digital realms by ensuring that all information flows are synchronized with the physical flow of goods. Nevertheless, a firm may encounter a hurdle in data management due to the enormous volume of data generated by IoT sensors and devices. An organization’s insufficient investment in data storage will inevitably lead to supply chain disruptions [17]. Moreover, the supply chain’s ability to promptly adapt and accommodate the IoT’s rapid expansion will provide more advantages and enhanced competitiveness in the emerging business landscape [18].

This study revealed that supply chain performance partially mediates the relationship between supply chain integration and organizational performance, consistent with Mathur et al.’s [90] findings. Similarly, competitive advantage partially mediates the association between supply chain integration and organizational performance, as reported by Yanus et al. [91]. Accordingly, the serial mediation between IoT adoption benefits and organizational performance through supply chain integration and competitive advantages was significant. Further, the serial mediation between IoT adoption benefits and organizational performance through supply chain integration and performance was also significant. Therefore, integrating the IoT into a supply chain may provide positive outcomes for organizational performance. Efficient supply chain management and the successful use of IoT technology will enhance organizational performance and ensure competitiveness in the market.

6. Conclusions

Saudi Arabia is preparing to increase to embrace the Internet of Things (IoT) as a data-driven innovation in several sectors, such as energy, education, environmental management, security, transportation, healthcare, and open data. The influence of the IoT on supply chain management is a subject that generates significant attention among scholars and practitioners. This research established a conceptual framework to examine the IoT’s influence on operational performance. This study highlights the significance of the IoT in improving organizational performance, with a particular emphasis on supply chain integration. Supply chain integration refers to a company’s ability to efficiently exchange information inside its organization and with its collaborators and clients; this efficient exchange depends on trust and transparency. These integrations improve both competitive advantage and supply chain performance. Consequently, a survey was disseminated to and gathered from firms in Saudi Arabia that have used IoT technology. The data were analyzed and the results were revealed using Smart-PLS. The IoT (benefits and challenges) demonstrated its importance and impact on supply chain integration, performance, and competitive advantage. Hence, the IoT improves organizational performance when this relationship is mediated by supply chain integration and supply chain performance. Furthermore, the benefits of the IoT are proven to enhance competitive advantage, ultimately resulting in improved operational performance. This study comprehensively examines the effects of the IoT and its influence on organizational performance.

6.1. Theoretical Implications

This study offers significant insights into the theoretical literature on supply chain integration, where IoT research is still in its early stages. This study met a crucial demand by conducting empirical research on the impact of IoT adoption on supply chain integration and its influence on organizational performance. Furthermore, this research adds to the limited studies on IoT in supply chains in Saudi Arabia.

IoT adoption is a firm capability that provides data about inventory and logistics, which enhances supply chain integration. It supports the data-driven decision to improve supply chain and organizational performance and market competitiveness. This study provides valuable theoretical insights by addressing crucial gaps in the current literature about the relationship between IoT adoption, supply chain integration, and operational performance. While previous studies have separately investigated these topics, this research thoroughly examines their interactions, revealing how organizations may improve their performance using the IoT and employing a unified strategy. This study establishes a comprehensive understanding of the strategic implications for organizations aiming to optimize their operations and supply chain management strategies by showing that successful IoT practices positively impact supply chain integration and subsequently improve organizational performance. Furthermore, it fills the void in prior research by specifically identifying and examining supply chain integration’s role as a mediator between IoT behaviors and operational performance. Identifying supply chain integration as a key mediator sheds light on the underlying dynamics and highlights its strategic relevance in conveying the good benefits of IoT practices to organizational performance.

According to dynamic capabilities theory, efficient supply chains enhance company competitiveness by facilitating innovation and data collection [92]. The current study provides evidence that IoT adoption, with its benefits and challenges, positively impacts supply chain integration. Furthermore, it advocates that supply chain integration mediates the relationships between IoT adoption (benefits and challenges) and supply chain performance, competitive advantage, and operational performance.

6.2. Practical Implications

This study’s results may provide Saudi enterprises with a compelling reason to use the IoT because of its ability to improve supply chain integration. The pervasiveness and omnipresent nature of the IoT make it arguable that external integration provided by the IoT has great relevance in achieving supply chain performance and organizational performance. Moreover, the current study emphasizes the need to use the IoT to maintain competitiveness and stay abreast of technological progress and industry counterparts.

Encouraging IoT technology by all participants in a supply chain may provide benefits, such as enhanced visibility, product tracking, and streamlined inventory management. IoT devices like sensors, actuators, smartphones, and near-field communicators may enhance connection, security, event monitoring, and advanced analytics for business information. This enhancement provides benefits to retail logistics operations, suppliers, and consumers. Hence, IoT technologies propel smart supply chains, providing valuable tools for companies and contributing to the ongoing expansion of the IoT in this domain. The quick expansion improves sustainability and gathers comprehensive data that can be used for future analysis of progress.

6.3. Limitations and Future Research Directions

This study has some limitations to consider. The scope of this research focused on the effect of IoT adoption on smart supply chains. Future research could investigate the impact of Industry 4.0 on supply chain integration and performance or concentrate on the benefits and challenges of adopting these technologies. Moreover, this study examined IoT adoption benefits regarding supply chain efficiency, visibility, and challenges in terms of organizational adjustment and technology trustworthiness. However, the IoT has additional benefits and challenges in supply chain management that warrant further investigation. Furthermore, a notable limitation is the small sample size and specific participants (IoT providers). Although PLS was used to address the issue, future research could involve supply chain partners in Saudi Arabia to potentially yield different results.

Despite these limitations, we consider our study a fundamental theoretical contribution to the resource-based view and organizational capabilities literature. It discusses and presents evidence of how the IoT and supply chain integration create a long-lasting competitive advantage leading to enhanced organizational performance.