Collaboration Over Complexity: How Digital Platforms Foster Circular Procurement in Manufacturing
SMEs
Abdullah Kaid Al‐Swidi, Mohammed A. Al‐Hakimi, Ibraheem Saleh Al Koliby, Triss Ashton, Abdulalem Mohammed ABSTRACT
The transition toward a circular economy requires manufacturing firms to rethink how resources are sourced, managed, and retained within supply chains. For manufacturing SMEs, digital capabilities can facilitate this transition by improving information exchange, supplier coordination, and procurement processes. However, how digital platform capability (DPC) contributes to circular procurement practices (CPPs) and the mechanisms and conditions through which this relationship occurs remain insufficiently understood. Building on the practice‐based view and dynamic capabilities view, this study explores the role of DPC in enhancing CPPs. It also investigates the mediating role of suppliers' collaboration and the moderating role of digital maturity in the link between DPC and CPP, as well as examines the effect of CPP on sustainable performance. Drawing on data collected from dual respondents across 237 Malaysian manufacturing SMEs and analyzed using structural equation modeling, this study reveals that DPC significantly influences CPP, both directly and indirectly through suppliers' collaboration. Suppliers' collaboration was found to partially mediate the DPC–CPP relationship. However, digital maturity does not significantly moderate the relationship between DPC and CPP or between DPC and suppliers' collaboration. CPP, in turn, has a strong positive effect on sustainable performance. Theoretically, the findings reveal that the contribution of DPC to circular procurement extends beyond the technological capability itself, with suppliers' collaboration serving as an important organizational mechanism through which digital capabilities are translated into CPP. Practically, the findings suggest that manufacturing SMEs should complement investments in digital platforms with stronger supplier collaboration to convert digital connectivity and information exchange into effective CPP and improved sustainable performance.