The role of absorptive capacity and big data analytics in strategic purchasing and supply chain management decisions

Big data analytics (BDA) is widely used in sales, marketing, distribution, and finance; however, its implementation in supply chain management, specifically in purchasing and supply management (PSM), has been slow and uneven. This study investigates the impact of BDA on strategic PSM decisions and how it interacts with a company’s absorptive capacity. We conducted a survey of 222 purchasing and supply chain managers in international companies across various industries. Using structural equation modeling, we found that the exploration, assimilation, and transformation capabilities of purchasing departments are crucial in facilitating the use of BDA for strategic decision-making in PSM. Companies that excel in BDA in the PSM space are better equipped to capitalize on new and existing knowledge sources, which improves their performance. However, only businesses with the right resources can fully leverage BDA for high-level strategic decision-making; when BDA is applied to operational PSM activities, the desired effects may not be achieved.