How does supplier digitalization improve customer resource allocation efficiency? The role of supply chain entrainment

Purpose Customer resource allocation efficiency (RAE) refers to the ability of customers to use, allocate and manage their available resource inputs to produce valuable outputs. This study draws on organizational entrainment theory (OET) to examine how the implementation of supplier digitalization affects customer RAE through supply chain entrainment. Design/methodology/approach Based on supplier and customer data disclosed by Chinese A-share listed firms from 2009 to 2022, this study uses fixed effects panel data models to empirically examine the impact of supplier digitalization on customer RAE and the mechanistic role of supply chain entrainment. Findings The results show that supplier digitalization significantly increases customer RAE. It improves RAE by influencing the three dimensions of supply chain entrainment (the bullwhip effect, inventory management coordination and risk management coordination). Practical implications This study provides important insights into how managers can adapt the external digital environments and maintain synchronous operations with their supply partners. Our findings demonstrate how managers can fully leverage the advantages of digitalization of their suppliers to improve their own RAE through supply chain entrainment strategies. Originality/value This study introduces the concept of supply chain entrainment to reveal how firms optimize their own resource allocation strategies and achieve efficient operations. Our research enriches the understanding of supply chain governance in the digital age and contributes to the literature on supply chain digitalization.