Industry 4.0 Capabilities and Sustainable Supply Chain Resilience: The Sequential Roles of Sustainability‐Oriented Dynamic Capabilities and Circular Supply Chain Practices

Abstract

ABSTRACT This study examines how Industry 4.0 capabilities contribute to sustainability‐oriented dynamic capabilities, facilitate circular and reverse supply chain practices, and jointly produce sustainable supply chain resilience. Addressing the persistent reference fragmentation across digitalization, sustainability, circular economy, and resilience research, the study develops and empirically validates a sequential capability architecture grounded in the dynamic capabilities view (DCV) and an emerging circular intelligence perspective. Using survey data from 2503 supply chain professionals across 500 US manufacturing firms, covariance‐based structural equation modeling confirms the higher‐order structure of Industry 4.0 capabilities, sustainability‐oriented dynamic capabilities, reverse supply chain, and sustainable supply chain resilience, and tests the direct, mediating, and serial mediating relationships. Results show that I4C significantly enhances sustainability‐oriented dynamic capabilities and reverse supply chain. Sustainability‐oriented dynamic capabilities further enable circular practices and resilience, and the reverse supply chain is the dominant driver of sustainable resilience. Mediation and serial mediation analyses reveal that digital capabilities translate into resilience only when routed through sustainability‐oriented interpretation and regenerative circular operations. This study provides initial empirical support for an integrated digital, sustainability, and circular capability pathway. The study advances DCV by demonstrating how digital sensing evolves into higher‐order sustainability cognition and extends circular‐economy logic through a circular‐intelligence perspective, identifying the circular mechanisms through which sustainability capabilities produce resilient outcomes. Managerially, the findings underscore that digitalization must be coupled with sustainability learning and circular system design for firms to achieve resilience that is environmentally regenerative and operationally robust.

The authors' abstract, as published at the source. Business Strategy and the Environment, 2026 · DOI ↗