Performance Impact of Digitalization in the Food Supply Chain: Evidence from the Food Processing Complex in Ethiopia

Background: Although digitalization is recognized to improve the food supply chain, its effect pathways have not been thoroughly researched, especially in the context of developing countries. This study examines the association of three digitalization practices: digital internal practice (DIP), digital integration with suppliers (DIS), and digital integration with customers (DIC) with nine supply chain performance metrics: efficiency, flexibility, food safety/quality, reliability, traceability, food loss, and sustainability, mediated by operational efficiency, trust, and transparency, using food processing company case in Ethiopia. Methods: Using an explanatory approach, data from 153 respondents were analyzed through mediation-based structural equation modeling (SEM) in JASP (v.0.95.4.0). The analysis involved 27 direct and 81 indirect effect paths. Results: The results demonstrated a fundamental comprehension that while digital practices manifest direct positive (improvement) effects, a purely direct-impact assessment is insufficient. Statistically, more than half of the suggested direct paths were not significant. The total effects, on the other hand, were significant for all 27 paths tested with much stronger positive associations. Conclusions: The mediation-based examination of the relationship of digitalization practices on food supply chain performance offers essential insight, indicating that the impact of digitalization on supply chain performance is primarily indirect, functioning through the enhanced capabilities it fosters.