Dual transformation pathways in supply chains: linking national reforms to efficiency gains and capability development

Purpose This study aims to examine how national reform policies shape supply chain transformation through two distinct but interrelated pathways: Pathway A (short-term efficiency and service performance gains) and Pathway B (long-term capability development via organizational readiness). Using Saudi Arabia’s Vision 2030 as the empirical context, this study addresses how policy-driven reforms translate into firm-level outcomes. Design/methodology/approach A sequential explanatory mixed-methods design was used. Survey data from 247 supply chain professionals across 14 sectors were analyzed using partial least squares structural equation modeling. These findings were complemented by 20 semi-structured interviews. Multi-group and mediation analyses were conducted to examine sectoral variation and the mechanisms linking reform drivers to transformation outcomes. Findings The results reveal a dominant efficiency-oriented pathway. Pathway A accounts for 54%–65% of observed effects, while Pathway B explains 35%–46%. Digitalization, localization and regulatory reform activate both pathways, but with clear sectoral contingencies. Logistics sectors prioritize efficiency gains, whereas manufacturing sectors emphasize capability development. Organizational readiness operates as a dynamic capability mediating reform–performance relationships. IoT, AI and blockchain enable both immediate operational improvements and longer-term adaptive capacity. Research limitations/implications The findings are grounded in a Saudi Arabian reform context and a cross-sectional design, which may limit generalizability to other institutional environments. Future research could adopt longitudinal and comparative multi-country designs to examine how dual transformation pathways evolve across sectors and policy contexts. Practical implications This study provides managers and policymakers with the Dual Transformation Readiness Framework (DTRF), a diagnostic tool for aligning reform initiatives with organizational readiness, sectoral conditions and staged technology adoption strategies. The framework supports evidence-based prioritization of both efficiency-oriented and capability-building investments. Social implications The findings demonstrate that coordinated national reforms spanning digitalization, localization and regulatory restructuring can strengthen supply chain resilience, workforce adaptability and long-term capability development, thereby supporting broader economic transformation objectives. Originality/value This study advances supply chain transformation theory by developing a dual-pathway framework that moves beyond single-mechanism explanations. It reconceptualizes organizational readiness as a dynamic, multidimensional capability. This study also demonstrates how national reforms operate through a coordinated architecture of digitalization, localization and regulatory change. By integrating institutional and contingency perspectives, it explains sectoral variation in transformation responses. The DTRF is introduced as a diagnostic tool for aligning reform pressures with organizational capabilities.