The Relationship between AI Adoption and Supply Chain Agility in Retail Organizations of Pakistan

Abstract

The growing digital transformation in retail has brought artificial intelligence (AI) to the forefront of supply chain management, enabling firms to enhance efficiency, responsiveness, and adaptability. This study investigates the relationship between AI adoption and supply chain agility among retail organizations in Pakistan. Drawing on the Resource-Based View (RBV), Dynamic Capabilities View (DCV), and Resource Orchestration Theory (ROT), the research explores how AI integration contributes to agility dimensions—flexibility, speed, and responsiveness. A quantitative research design was employed, using structured questionnaires distributed to 200 supply chain and operations managers across major retail sectors, including grocery, e-commerce, apparel, and consumer electronics. Data were analyzed using SPSS and Smart PLS, incorporating descriptive statistics, correlation, and regression analyses. Results indicate a strong and positive relationship between AI adoption and supply chain agility (R = 0.79, R² = 0.62, p < 0.001). AI adoption was found to significantly enhance all agility dimensions, enabling firms to better anticipate market changes, streamline operations, and improve customer responsiveness. The findings suggest that organizations that effectively leverage AI tools are more capable of achieving operational flexibility and competitive advantage. The study contributes theoretically by extending technological management literature through the integration of RBV, DCV, and ROT, and practically by offering insights for managers and policymakers promoting digital transformation in emerging economies. Limitations and future research directions are discussed, emphasizing longitudinal and cross-sectoral studies for broader generalizability.