OPTIMIZING SUPPLY CHAIN PERFORMANCE THROUGH INDUSTRY 4.0: THE ROLE OF AUTOMATION AND KNOWLEDGE MANAGEMENT

Abstract

The research aims at exploring readiness of textile industry of Pakistan for Industry 4.0 with focus on the mediating role of automation level (AL) and knowledge management level (KML) in the development of digital transformation. Building upon systems theory and the resource-based view, we introduce a conceptual model to assess the effects of these two constructs on supply chain performance (SCP) and the intention to adopt Industry 4.0 (PUOI). The managers of textile industries were surveyed, and data were collected and analyzed with SEM and CFA. This study suggests that automation, as well as knowledge management, can contribute to the potential usage level of Industry 4.0, while the roles of automation are more significant. Knowledge management is positively associated with supply chain performance, although automation and PUOI have weaker dependences at this lower level of adoption. The study contributes to theory by clarifying the interdependent roles of automation and knowledge management in digital readiness, while offering practical guidance for managers and policymakers. It cautions against assuming that automation alone ensures performance improvements and underscores the need for synchronized strategies that balance technology, human capital, and organizational processes. The framework provides actionable insights for strengthening Industry 4.0 readiness, competitiveness, and sustainability in emerging economies.

Keywords: Automation Level, Knowledge Management Level, Supply Chain Performance, Industry 4.0, Readiness Level.