Ai Adoption In Smes Supply Chains: Determinants And Impact On Performance In Limpopo, South Africa

Abstract

Artificial Intelligence (AI) is increasingly transforming supply chain management (SCM) by enhancing efficiency, reducing costs, and improving decision-making. This study examines AI adoption among small and medium enterprises (SMEs) in Limpopo, South Africa, focusing on three key determinants: Organizational Readiness, Top Management Commitment, and Competitive Pressure. A quantitative research design was employed using structured questionnaires distributed to 230 SMEs, yielding 207 valid responses (90% response rate). Data were analyzed using SPSS for descriptive statistics, correlation, multiple regression, and diagnostic testing. Results show that Organizational Readiness is the most significant predictor of AI adoption (ß = 0.391, p < 0.001) and is strongly associated with improved SCM performance (r = 0.58, p < 0.01). Top Management Commitment also significantly influences adoption (ß = 0.278, p = 0.001), while Competitive Pressure was not a significant factor (ß = 0.142, p = 0.089). The regression model explained 41.2% of the variance in SCM performance (R² = 0.412). These findings highlight the importance of internal capabilities and strategic leadership in enabling successful AI integration. The study contributes to the growing literature on AI in developing economies and offers actionable insights for SME managers and policymakers aiming to enhance supply chain performance through digital transformation.