The Impact of Supply Chain Agility on Sustainable Supply Chain Performance: The Moderating Role of Supply Chain Innovation and The Mediating Role of Sustainable Supply Chain Management Practices in Sri Lankan Manufacturing Companies

Abstract

This study examines the impact of supply chain agility on sustainable supply chain performance, with sustainable supply chain management (SSCM) practices as a mediating mechanism and supply chain innovation as a moderating factor within the context of Sri Lankan manufacturing firms. Drawing on Dynamic Capabilities Theory, the Resource-Based View, and the Triple Bottom Line framework, the study develops and tests a conceptual model through a quantitative, cross-sectional survey. Data were collected from 78 people involved in supply chain operations across export-oriented manufacturing industries, and the hypotheses were tested using partial least squares structural equation modeling (PLS-SEM). The results reveal that supply chain agility has a significant positive effect on SSCM practices, while its direct effect on sustainable supply chain performance is not significant. SSCM practices, however, have a significant positive impact on performance and fully mediate the relationship between agility and performance, indicating that agility contributes to sustainability outcomes only when translated into operational practices. In contrast, the moderating effect of supply chain innovation is not supported. The model demonstrates acceptable explanatory power and predictive relevance. The study contributes to the literature by providing evidence of full mediation and highlighting the importance of operationalizing dynamic capabilities through sustainability practices to achieve performance outcomes, particularly in emerging economy contexts. The findings offer practical insights for managers and policymakers to integrate supply chain agility into SSCM practices to enhance sustainable performance.