Going digital doesn't actually make companies 'lean'—it just makes them want to hoard more cash and supplies.
March 26, 2026
Original Paper
Digital Transformation in Cash-to-Cash Routines and Organizational Resilience: Evidence from Buffer Configuration
SSRN · 6467488
The Takeaway
We usually think digital technology helps companies minimize waste and inventory. However, empirical data shows that the most digitally advanced firms actually use their tech to manage significantly larger buffers of stock and capital, which acts as a protective shield that allows them to survive global supply chain disruptions better than their 'efficient' peers.
From the abstract
Digital transformation is reshaping firm operations, but its role in building organizational resilience remains insufficiently understood. We examine whether the digitalization and operational embedding of routines governing inventories, receivables, and payables strengthen firms’ ability to withstand, adapt to, and recover from disruption. Using panel data on Chinese listed firms from 2012 to 2024, we develop a text-based measure of digital transformation in working-capital management from annu