1. Introduction
Within an environment of mounting supply chain uncertainty, environmental disruptions, and technological transformation, the pursuit of sustainable and resilient supply chain systems has become a strategic imperative for organizations worldwide. Particularly in emerging economies such as Saudi Arabia, supply chain leaders are being challenged to reconfigure traditional models in favor of strategies that ensure both continuity and sustainability [
1,
2]. Also, Saudi Arabia is undergoing an economic transition from oil dependence to diversification under Vision 2030. This makes it an ideal setting to study supply chain diversification strategies (SCDS), because firms are actively reconfiguring their sourcing, logistics, and operational networks in response to systemic reforms, global trade shifts, and localization policies. Unlike more mature economies, the Saudi context represents a nascent yet rapidly evolving supply chain landscape, where diversification and resilience are not legacy practices but newly developing strategic imperatives [
3]. Among the most prominent approaches is the supply chain diversification strategy (SCDS), which refers to the deliberate design and implementation of multi-sourcing, geographical dispersion, and flexible network configurations to mitigate risks and enhance adaptability [
4,
5]. While the existing literature acknowledges the role of SCDS in enhancing operational performance, its relationship with long-term supply chain sustainability performance (SCSP) remains underexplored, especially through the lens of supply chain resilience (SCR) as an underlying mechanism [
6,
7].
Situated within the framework of the Resource-Based View (RBV), Saudi firms are rapidly building digital and operational capabilities from the ground up, a dynamic not typically present in more mature economies, offering a distinctive opportunity to examine how newly acquired resources translate into resilience and sustainability [
8]. Under Dynamic Capabilities Theory (DCT), the Vision 2030-driven economic transformation compels supply chains to adapt swiftly to evolving regulatory, technological, and environmental demands, making the Saudi context especially suited for exploring organizational agility [
9].
From the standpoint of Stakeholder Theory, Vision 2030 has intensified pressures from government, investors, and society for environmental, social, and governance (ESG) compliance, creating a rare setting where stakeholder expectations are directly reshaping sustainability outcomes [
10]. Moreover, Saudi Arabia’s western region, with cities like Jeddah, Makkah, and Medina, functions as a strategic logistics hub linking Asia, Africa, and Europe. Studying this region offers valuable insights into how supply chains in emerging economies leverage diversification, resilience, and sustainability strategies in response to institutional upheaval and geographic centrality [
11]. These contextual and theoretical considerations collectively position Saudi Arabia as a novel and compelling setting for testing the interplay of organizational resources, adaptive capabilities, and stakeholder-driven sustainability in supply chain research.
Although the integration of resilience and digitalization has been explored in other region such as Asia and Europe this study’s Saudi context offers distinctly valuable insights. For instance, recent research in China has shown how digital transformation enhances supply chain resilience [
7], while a European-oriented study demonstrates the combined effect of resilience strategies and digitalization in advancing sustainability [
12]. However, Saudi Arabia presents a uniquely compelling setting. The nation’s Vision 2030 initiative is driving systemic transformation, rather than only incremental evolution, across diversification, resilience-building, and digitalization simultaneously. The western region (Jeddah, Makkah, and Medina) further amplifies theoretical interest: it is a strategic logistics hub bridging Asia, Africa, and Europe, offering a real-world laboratory to observe how emerging economy supply chains adapt global theories through institutional upheaval and geographic centrality. By situating the resilience–digitalization nexus in Saudi Arabia under Vision 2030, this study extends global supply chain theory in ways that mature economies cannot, turning regional transformation into a source of theoretical and practical novelty.
Despite growing academic attention on resilient and sustainable supply chains, there exists a significant theoretical gap in understanding how diversification strategies translate into sustainability outcomes through resilience-building capabilities [
13]. Current studies often treat resilience and sustainability as separate constructs, failing to explore their interdependent dynamics [
14,
15]. Furthermore, the moderating role of digital supply chain capabilities (DSC), encompassing technologies such as AI, IoT, block-chain, and predictive analytics, has received limited empirical scrutiny, despite being a critical enabler of visibility, agility, and decision-making in contemporary supply chains. The interaction between diversification strategies, digital capabilities, and resilience mechanisms, and how they collectively influence sustainability outcomes, remains inadequately theorized and empirically tested [
16,
17].
From a practical standpoint, organizations in Saudi Arabia’s western region are undergoing rapid transformation under the auspices of Vision 2030, which emphasizes sustainable economic development, technological innovation, and supply chain localization. However, many firms continue to struggle with integrating digital tools and resilience practices into their diversification strategies in ways that support sustainability [
2,
18]. This highlights a practical gap in both knowledge and execution, particularly in how firms operationalize diversification and digital strategies to achieve long-term sustainability performance amidst systemic disruptions.
This study seeks to address these gaps by developing and testing a moderated mediation model that examines the direct effect of SCDS on SCSP, the mediating role of SCR, and the moderating role of DSC. The research is grounded in an integrated theoretical framework drawing on the Resource-Based View (RBV), Dynamic Capabilities Theory (DCT), and Stakeholder Theory (ST), enabling a holistic examination of how internal resources, adaptive capabilities, and stakeholder-driven performance expectations interact. This study is original in its context-specific focus on Saudi firms, its empirical modeling of complex interrelationships among strategic, digital, and sustainability variables, and its theoretical integration of capability-based and stakeholder-centric perspectives. The findings aim to contribute both theoretically to the supply chain literature and practically to decision-making in digitally transforming sustainability-oriented organizations in emerging markets.
7. Methodology
This study adopts a quantitative, cross-sectional survey design to examine the relationship between supply chain diversification strategy (SCDS) and supply chain sustainability performance (SCSP), with supply chain resilience (SCR) as a mediator and digital supply chain capabilities (DSC) as a moderator, in the context of Saudi firms. Data were collected from 329 supply chain professionals including managers, senior supervisors, and operational decision-makers, working in medium-to-large manufacturing and retail firms. A stratified sampling approach was employed to ensure that respondents possessed direct responsibility or significant involvement in supply chain strategy, sourcing decisions, and sustainability initiatives. A stratified sampling approach was employed to ensure representation across organizational levels and firm sizes. The strata were defined as (1) job role (supply chain managers, senior supervisors, operational staff with decision-making responsibilities), and (2) industry sector (manufacturing vs. retail). Within each stratum, participants were randomly selected to ensure that perspectives from both strategic and operational levels, as well as from different sectors, were proportionally represented. This approach increased the generalizability of findings by avoiding overrepresentation of a single role or sector and ensuring that all groups directly involved in supply chain strategy, sourcing, and sustainability initiatives were included. The research instrument consisted of a structured questionnaire with validated multi-item constructs measured on a 5-point Likert scale (1 = Strongly Disagree, 5 = Strongly Agree).
The constructs were operationalized using established scales: SCDS (seven items) adapted from Refs. [
6,
17,
36] (which includes the following: we strategically source critical materials from suppliers in multiple geographic regions, we use multiple suppliers for each key input to reduce dependency risks, our supply chain network is strategically restructured to adapt to global disruptions, and we maintain alternative sourcing plans for critical materials or components, our organization holds strategic inventory to manage supply uncertainty, we conduct regular risk assessments across the supply chain to ensure readiness and our supply chain strategy balances efficiency with flexibility to adapt to uncertainty); and SCR (seven items) from Refs. [
49,
50,
51] (which includes the following: our supply chain can recover quickly from unexpected disruptions, we have backup suppliers to maintain continuity during crises, our operations adapt quickly to changes in supply or demand conditions, we monitor risks proactively across our supplier tiers, we maintain flexible contracts and partnerships to respond to change, we simulate risk scenarios to evaluate our supply chain’s readiness and our teams coordinate effectively to restore operations during disruptions).
The following scales were also used: DSC (seven items) based on Refs. [
51,
52,
53,
54] (which includes the following: we use real-time tracking tools (e.g., IoT, GPS) for logistics visibility, our systems integrate data from suppliers, logistics, and inventory, AI or predictive analytics is used to forecast supply and demand risks, we use digital dashboards to monitor the entire supply chain in real-time, Blockchain or similar technologies help us trace product origins and compliance, our organization uses digital twins or simulations to improve supply chain planning, and our employees are trained to use digital tools for agile supply chain decision-making); and SCSP (seven items) adapted from Refs. [
55,
56,
57,
58] (which includes the following: our supply chain practices reduce carbon emissions and environmental impact, we work only with suppliers that follow ethical labor and environmental practices, sustainability goals are integrated into our procurement and sourcing strategies, we track and report sustainability performance across supply chain operations, we actively engage in circular practices like reuse, recycling, or upcycling, we evaluate suppliers for sustainability performance regularly, and our organization collaborates with partners to improve overall sustainability outcomes).
Data analysis included descriptive statistics, Shapiro–Wilk tests for normality, exploratory factor analysis (EFA) for construct validity, and reliability assessment via Cronbach’s alpha. Hypothesized relationships were tested using multiple regression analysis and PROCESS Macro (Model 4 for mediation, Model 1 for moderation) in SPSS version 27. This methodological approach is grounded in Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT), offering a theoretically informed framework for understanding how structural and digital capabilities foster resilience and sustainability in Saudi supply chains.
In this study, Hayes’ PROCESS Macro for SPSS was employed to test mediation and moderation effects. Model 4 was used to assess mediation, where supply chain diversification strategy (SCDS) influences supply chain sustainability performance (SCSP) both directly and indirectly through supply chain resilience (SCR) as a mediating variable. This model allows the estimation of total, direct, and indirect effects using bootstrapping procedures to confirm mediation paths. Model 1 was applied to test moderation, where digital supply chain capabilities (DSC) were specified as a moderator of the relationship between SCDS and SCSP. This model estimates the interaction effect (SCDS × DSC) on SCSP, clarifying whether the strength of the SCDS–SCSP link varies across different levels of DSC. Together, these models provide a robust framework for evaluating both conditional indirect effects and moderating influences within the hypothesized relationships.
8. Data Analysis and Result
In
Table 1, the descriptive statistics indicate that participants generally reported positive perceptions across all four supply chain constructs. Supply chain resilience (SCR) had the highest mean score (M = 3.94, SD = 0.65), reflecting a moderate-to-high degree of strategic flexibility and disruption recovery capabilities among respondents. This was followed closely by supply chain sustainability performance (SCSP), which had the mean score (M = 3.87, SD = 0.68), suggesting strong engagement in sustainable practices such as environmental responsibility and circular operations. Supply chain diversification strategic (SCDS) (M = 3.87, SD = 0.68) and digital supply chain capabilities (DSC) had the lowest mean (M = 3.85, SD = 0.70), though still above the scale midpoint, indicating a developing yet meaningful use of digital technologies such as GPS, IoT, AI, and data integration. All constructs displayed reasonable variability (SDs ranging from 0.65 to 0.70), and the full range of the Likert scale (1 to 5) was observed, confirming appropriate response dispersion and scale utilization.
As shown in
Table 2, the Shapiro–Wilk test was conducted to assess the normality of each construct’s distribution. Results indicate that all four constructs exhibited
p-values greater than the 0.05 threshold (
p = 0.065, 0.072, 0.058, and 0.061, respectively). This means the null hypothesis of normal distribution cannot be rejected for any variable, suggesting that the data for each construct is approximately normally distributed. The findings support the suitability of applying parametric statistical analyses, such as regression and PROCESS Macro, in subsequent hypothesis testing.
As seen in
Table 3, the reliability analysis revealed that all four constructs exhibited strong internal consistency, with Cronbach’s alpha values ranging from 0.84 to 0.88, exceeding the recommended threshold of 0.70. Composite reliability (CR) values for all constructs were above 0.85, indicating high construct reliability and suggesting that the items consistently measure their intended latent variables. Furthermore, average variance extracted (AVE) values range from 0.53 to 0.56, surpassing the minimum acceptable level of 0.50, thereby confirming adequate convergent validity. These results collectively indicate that the measurement model was both reliable and valid, providing a robust foundation for subsequent hypothesis testing.
As seen in
Table 4, the exploratory factor analysis (EFA) revealed a clear and well-structured four-factor solution, with all items loading strongly (≥0.68) on their respective constructs. The five items measuring supply chain diversification strategy (SCDS) loaded between 0.68 and 0.74, indicating strong internal consistency in capturing strategic sourcing and flexibility practices. Similarly, the supply chain resilience (SCR) items exhibited loadings from 0.69 to 0.74, reflecting robust measurement of disruption recovery and adaptability. Digital supply chain capabilities (DSC) items showed loadings between 0.68 and 0.72, supporting their representation of technological integration such as GPS, AI, IoT, and data systems. Lastly, the supply chain sustainability performance (SCSP) construct displayed consistently high loadings (0.70 to 0.74), confirming the coherence of items assessing environmental responsibility and ethical practices. The absence of cross-loadings and uniformly high loading values indicated strong convergent validity and a reliable measurement model.
As seen in
Table 5, Harman’s single-factor test indicated that the first un-rotated factor accounted for 32.7% of the total variance, well below the 50% threshold commonly used to indicate serious common method bias [
59]. This suggests that common method variance is unlikely to threaten the validity of the findings, and the four-factor solution (SCDS, SCR, DSC, and SCSP) is robust.
As seen in
Table 6, the correlation matrix demonstrates that all study variables were positively and moderately to strongly related, supporting the theoretical assumptions of interconnectedness among diversification, resilience, digital capabilities, and sustainability performance. Supply chain diversification strategy (SCDS) showed a substantial positive correlation with supply chain resilience (SCR) (r = 0.61), digital supply chain capabilities (DSC) (r = 0.58), and supply chain sustainability performance (SCSP) (r = 0.64), suggesting that diversification strategy enhances both resilience and digital integration, which in turn contributes to sustainability outcomes. SCR is strongly correlated with SCSP (r = 0.67), indicating that resilient supply chains were better positioned to achieve sustainability goals. Similarly, DSC is strongly linked to SCSP (r = 0.65), highlighting the role of digital capabilities in driving sustainable performance.
As seen in
Table 7, the multiple regression analysis revealed that supply chain diversification strategy (SCDS), supply chain resilience (SCR), and digital supply chain capabilities (DSC) were all significant positive predictors of supply chain sustainability performance (SCSP). Specifically, SCDS (β = 0.324,
p < 0.001) demonstrated a substantial contribution, indicating that diversified sourcing and structural redundancy significantly enhance sustainability outcomes. SCR (β = 0.356,
p < 0.001) had the strongest standardized effect, highlighting the critical role of adaptive recovery and continuity capabilities in sustaining environmental, social, and economic performance. DSC (β = 0.342,
p < 0.001) also showed a significant influence, suggested that digital integration strengthens the sustainability impact of diversification and resilience strategies. The model explained 52% of the variance in SCSP.
As seen in
Table 8, the model summary indicates a strong positive relationship between the predictors (SCDS, SCR, and DSC) and SCSP, with an R
2 of 0.520, indicating that approximately 52% of the variance in sustainability performance is explained by these three variables. The model is statistically significant (F = 117.36,
p < 0.001), confirming that the combination of diversification strategy, resilience, and digital capabilities were a robust predictor of sustainable supply chain performance. Empirical comparisons across organizational contexts are scarce, but several recent studies shed light on similar dynamics such as that done by (Atieh Ali et al. 2024) [
12], which found positive links between SCR, DSC, and sustainability, using structural equation modeling in a sample of 300 managers. While they did not report R
2 directly, their robust model highlighted how digital capabilities fortify resilience-driven sustainability. Also, in the Chinese construction sector, ref. [
7] reported strong direct effects of SCR on sustainable performance, aligning with these findings that resilience is a key predictor. Besides that, ref. [
4] demonstrated that supply chain digitization and diversification jointly improve resilience in emerging markets, echoing these combined effects, though without quantifying the explained variance.
As seen in
Table 9, the mediation analysis using PROCESS Macro Model 4 revealed that supply chain diversification strategy (SCDS) had a strong and significant positive effect on supply chain resilience (SCR) (a path: B = 0.612,
p < 0.001) and that SCR significantly predicts supply chain sustainability performance (SCSP) (b path: B = 0.431,
p < 0.001). The total effect of SCDS on SCSP (c path) was significant (B = 0.572,
p < 0.001), and the direct effect (c′ path) remains significant after controlling for SCR (B = 0.308,
p < 0.001), suggesting partial mediation. The indirect effect through SCR (a × b = 0.264) was also significant, with a 95% bootstrap confidence interval [0.194, 0.343] that does not include zero, confirming that SCR partially mediated the SCDS–SCSP relationship. These findings imply that SCDS enhances SCSP both directly and indirectly by strengthening resilience, which acted as a key mechanism through which diversification strategies translated into sustainability outcomes.
As seen in
Table 10, the moderation analysis revealed that both supply chain diversification strategy (SCDS) (B = 0.415,
p < 0.001) and digital supply chain capabilities (DSC) (B = 0.367,
p < 0.001) had significant and positive main effects on supply chain sustainability performance (SCSP). Importantly, the interaction term SCDS-to-DSC was also positive and statistically significant (B = 0.128,
p = 0.001), with a confidence interval (0.055, 0.201) that did not include zero, confirming a moderating effect.
9. Discussion
The findings of this study confirmed that supply chain diversification strategy (SCDS) has a significant and positive relationship with supply chain sustainability performance (SCSP), thereby supporting the first hypothesis. The results indicate that organizations that strategically source critical materials from suppliers in multiple geographic regions, use multiple suppliers for each key input, and maintain alternative sourcing plans are better able to sustain environmental, social, and economic performance [
6,
60,
61]. These practices reduce dependency risks, enhance adaptability to global disruptions, and enable firms to safeguard sustainability programs during operational uncertainty [
62,
63]. Furthermore, strategic inventory holdings and regular risk assessments ensure supply continuity without compromising sustainability goals such as reducing carbon emissions, enforcing ethical labor standards, and engaging in circular economy practices [
63,
64]. The statistical evidence from this study demonstrates that diversification, when combined with integrated sustainability criteria in procurement and regular performance tracking, serves as a structural enabler of long-term SCSP [
12].
However, while the positive relationship found here aligns with much of the existing literature, some critical perspectives caution against assuming a universal benefit. Diversification can increase transportation emissions when sourcing from multiple distant regions, create additional complexity in monitoring sustainability compliance, and in some cases shift the focus of risk assessments from sustainability to purely operational continuity [
65,
66]. In contexts of urgent disruption, firms may prioritize securing alternative supply sources over maintaining strict sustainability standards, potentially undermining long-term objectives [
67,
68]. Despite these concerns, the empirical results in this study suggest that, at least within the surveyed organizations, the benefits of SCDS in sustaining and advancing environmental, social, and economic outcomes outweigh the potential drawbacks. This reinforces the strategic value of embedding sustainability objectives directly into diversification policies, ensuring that resilience and sustainability are pursued in parallel rather than in competition.
The empirical results of this study indicated a positive and statistically significant relationship between SCDS and SCR, supporting H2. Diversification through multi-sourcing, geographic dispersion, and the use of alternative logistics channels provides organizations with the structural redundancy and flexibility necessary to recover quickly from unexpected disruptions [
31,
32]. For example, firms that strategically maintain backup suppliers, flexible contracts, and alternative sourcing plans are better positioned to sustain operations during crises [
69]. Similarly, proactive practices such as risk monitoring across supplier tiers, scenario simulation, and cross-functional coordination strengthen the ability to adapt to shifts in supply or demand, enabling faster restoration of normal operations. This aligns with resilience theory, which emphasizes adaptive capacity, redundancy, and rapid recovery as core resilience dimensions [
5,
70].
However, from an opposing perspective, some scholars caution that diversification does not automatically translate into higher resilience. Increased supplier and geographic spread can introduce greater operational complexity, making coordination during crises more difficult and potentially slowing recovery. In some cases, managing a wide network of suppliers may dilute relationship quality and trust, which are critical for coordinated crisis response [
66,
71]. Furthermore, excessive diversification may lead to inefficiencies, higher costs, and challenges in aligning risk management protocols across diverse partners. These potential drawbacks suggest that diversification must be strategically managed and paired with robust communication, governance, and performance monitoring systems to fully realize its resilience benefits [
5,
72].
Besides that, the results of this study provide robust empirical evidence that supply chain resilience (SCR) significantly mediates the positive relationship between supply chain diversification strategy (SCDS) and supply chain sustainability performance (SCSP), which supports H3. Organizations that strategically source critical materials from suppliers in multiple geographic regions, engage multiple suppliers for each key input, and maintain alternative sourcing plans for critical components demonstrate enhanced capacity to withstand and recover from disruptions [
73,
74]. By holding strategic inventory, conducting regular supply chain risk assessments, and balancing efficiency with flexibility, these firms establish redundancy and adaptive capability, two core resilience dimensions emphasized in Resilience Theory [
32,
75].
The finding of partial mediation indicates that supply chain diversification strategy (SCDS) directly enhances sustainability performance (SCSP), while also being significantly amplified through supply chain resilience (SCR). From the Resource-Based View (RBV), diversification provides structural resources such as multiple suppliers, geographic dispersion, and inventory buffers, which serve as valuable, rare, and inimitable firm assets [
76]. However, these static resources alone do not guarantee sustainability outcomes. The Dynamic Capabilities Theory (DCT) frames resilience as the essential dynamic process that transforms these resources into adaptive recovery and sustained performance [
77]. At the same time, Stakeholder Theory explains how diversification also directly supports sustainability by enabling firms to engage with environmentally and socially responsible suppliers, meeting stakeholder expectations in ESG performance [
78]. Crucially, the fact that resilience only partially mediates this relationship underscores that diversification can independently drive sustainable outcomes. However, without deliberately built resilience through practices like scenario simulations, proactive risk monitoring, and collaborative sustainability initiatives, the sustainability impact of diversification may be uneven. Hence, resilience must be strategically cultivated alongside diversification to ensure consistent translation into long-term ecological, social, and economic performance. Also, from the lens of Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT), diversification provides the structural assets, while resilience provides the dynamic processes needed to transform these assets into sustainable performance outcomes.
In practice, this means that diversified supply chains are more capable of rapid operational recovery, supported by backup suppliers, flexible contracts, scenario simulation exercises, and cross-functional coordination mechanisms [
73,
79]. Such resilience mechanisms, when aligned with sustainability imperatives such as reducing carbon emissions, partnering exclusively with suppliers that follow ethical labor and environmental practices, and integrating circular economy initiatives into procurement enable firms to maintain environmental, social, and economic performance even under volatility [
13,
80].
However, while diversification enhances resilience and sustainability in some cases, it does not guarantee these outcomes. Overly dispersed supply networks can create complexity, hinder decision-making, and complicate sustainability monitoring across diverse regulatory environments [
40]. In crisis situations, firms may prioritize supply continuity over environmental or ethical commitments, risking long-term goals such as carbon reduction and responsible sourcing, instead targeting securing backup suppliers or accelerating shipments from less sustainable sources to protect short-term operations [
81,
82]. Thus, the mediating role of supply chain resilience depends on embedding proactive practices like risk monitoring, scenario simulations, and collaborative sustainability projects into diversification strategies to ensure that resilience and sustainability advance together [
83].
Furthermore, this study’s results confirm that digital supply chain capabilities (DSC) significantly moderate the relationship between supply chain diversification strategies (SCDS) and supply chain sustainability performance (SCSP), which supports H4. From the standpoint of Dynamic Capabilities Theory (DCT) and the Resource-Based View (RBV), digital supply chain capabilities strengthen the effectiveness of diversification strategies in achieving sustainability outcomes [
2,
45,
83]. Diversification initiatives such as strategically sourcing critical materials from suppliers in multiple regions, engaging multiple suppliers for each input, maintaining alternative sourcing plans, and holding strategic inventory provide redundancy and flexibility to reduce dependency risks [
5]. However, without adequate visibility, coordination, and data-driven decision-making, these practices may not fully translate into sustainability gains [
84].
Digital technologies bridge this gap by embedding real-time monitoring and predictive intelligence into diversified networks [
85]. Tools such as GPS and IoT-enabled tracking enhance logistics visibility, while integrated supplier logistics inventory systems allow seamless data flows across tiers. Blockchain technologies safeguard ethical and environmental compliance by tracing product origins, and AI-driven predictive analytics improve the ability to anticipate disruptions while balancing sustainability criteria [
86]. Moreover, digital twins and simulation models optimize planning by testing scenarios without creating real-world waste. Collectively, these capabilities transform the structural complexity of diversification into adaptive capacity, ensuring that firms not only safeguard supply continuity but also sustain environmental and social performance (reducing carbon emissions, enforcing ethical sourcing, and adopting circular economy practices) [
87].
Although digital supply chain capabilities (DSC) can strengthen the link between supply chain diversification strategies (SCDS) and sustainability performance (SCSP), the literature warns that their benefits are not automatic. High infrastructure and training costs may prevent some firms from effectively implementing advanced tools such as blockchain, predictive analytics, or digital twins [
88]. Furthermore, overly digitized and geographically dispersed networks risk creating information overload and integration challenges, which may slow decision-making in volatile conditions. Excessive reliance on digital dashboards and predictive systems can also reduce human judgment and cross-functional collaboration, undermining resilience [
89].
Moreover, supplier heterogeneity in digital maturity complicates sustainability monitoring across tiers, potentially shifting the focus toward short-term continuity rather than carbon reduction or ethical practices. Overall, while this study confirms DSC’s moderating role in enhancing the SCDS–SCSP relationship, its effectiveness depends on aligning digital adoption with governance, supplier capability-building, and sustainability tracking to ensure digitalization mitigates rather than amplifies complexity [
90].
This study resolves prior gaps by showing that supply chain diversification strategies (SCDS) do not directly enhance sustainability performance alone, but through the mediating role of resilience and the moderating effect of digital capabilities. Unlike earlier research that examined resilience and sustainability separately, these findings demonstrate their interdependence and the necessity of aligning structural redundancy with adaptive capacity. Digital capabilities further strengthen this link by embedding visibility and intelligence into diversified networks. Situated in Saudi Arabia’s Vision 2030 context, the study advances RBV and DCT by clarifying how resources and capabilities jointly generate sustainability outcomes, while offering practical guidance for emerging economies seeking to build resilient and sustainable supply chains.
11. Theoretical Contribution
This study advances the Resource-Based View (RBV) by demonstrating that supply chain diversification strategies (SCDS) represent valuable structural resources, but their impact on sustainability performance is contingent upon complementary dynamic processes. Specifically, the mediation of supply chain resilience (SCR) shows that diversification alone does not guarantee outcomes; rather, resilience acts as the mechanism that transforms structural redundancy into sustainable performance advantages. This extends RBV from a static resource perspective to a dynamic understanding of resource activation.
From the perspective of the Dynamic Capabilities Theory (DCT), the findings clarify that resilience is more than disruption recovery; it embodies the capacity to reconfigure, adapt, and sustain supply chain operations in volatile environments. The study further advances DCT by showing how digital supply chain capabilities (DSC) moderate the diversification–sustainability link, illustrating that technology-enabled sensing, learning, and reconfiguration amplify the adaptive use of diversification strategies. This contribution enriches prior work that has often overlooked the digital dimension of resilience.
Finally, incorporating the Stakeholder Theory (ST) highlights that the interaction between diversification, resilience, and digital capabilities is shaped by external pressures for environmental, social, and governance (ESG) compliance. By situating these dynamics within the Saudi Vision 2030 context, the study shows how institutional transformations and stakeholder demands directly influence the pathways through which diversification strategies generate sustainability performance. Collectively, the findings deepen RBV, DCT, and ST by illustrating that resilience and digitalization are not peripheral supports but essential mechanisms for converting diversification strategies into long-term sustainability advantages.
12. Practical Contribution
From a managerial perspective, this research provides actionable guidance for firms, particularly in emerging markets such as Saudi Arabia, on how to translate supply chain diversification strategies (SCDS) into tangible sustainability outcomes. The findings demonstrate that diversification on its own is insufficient; it must be complemented by resilience-building mechanisms and strengthened through digital supply chain capabilities.
For supply chain leaders, the study offers a framework to design multi-sourcing networks, optimize geographical dispersion, and integrate resilience practices such as strategic inventory holding and proactive risk assessment. At the same time, it emphasizes the importance of adopting advanced digital tools GPS, IoT, AI, blockchain, predictive analytics, and digital twins that enable real-time visibility, compliance monitoring, and adaptive decision-making.
These insights are especially relevant for organizations in Saudi Arabia’s western region, where Vision 2030 is driving both supply chain localization and global competitiveness. However, the implications extend beyond Saudi Arabia: multinational firms and policy-makers in other emerging economies can draw lessons on how structural redundancy, resilience mechanisms, and digital integration can collectively enhance sustainability in volatile environments. In advanced economies, the findings provide evidence that even mature supply networks must balance efficiency with redundancy and digital innovation to withstand global crises. By strategically combining diversification, resilience, and digitalization, managers worldwide can safeguard supply continuity while simultaneously advancing environmental responsibility, ethical practices, and long-term economic viability.
14. Research Limitations and Implications
This study has several limitations that should be acknowledged. First, the reliance on self-reported survey data, while common in supply chain research, raises the possibility of common method bias. Although reliability and validity tests were conducted, future research could explicitly test and control for this bias, for example, through Harman’s single-factor test or multi-source data collection. Second, the cross-sectional design restricts the ability to infer causal relationships. Longitudinal studies or panel data would allow researchers to capture how diversification, resilience, and digital transformation evolve over time, particularly under recurring disruptions. Third, the geographic focus on Saudi Arabia’s western region, while offering valuable context under Vision 2030 reforms, limits the generalizability of findings to other institutional or economic environments. Comparative studies across regions and countries could provide deeper insights into contextual contingencies.
In terms of research extensions, future work could employ multi-level analyses at the firm, network, and industry levels to examine how resilience and digital capabilities operate not only within organizations but also across supply chain ecosystems. Additionally, incorporating complementary variables such as supply chain agility, green innovation, environmental regulatory pressure, and risk management practices would broaden the explanatory framework. Mixed-method approaches combining large-scale surveys with in-depth case studies could further unpack the mechanisms by which diversification strategies, resilience-building, and digitalization interact to drive long-term sustainability and competitive advantage.