Supply chain information and relational alignments: mediators of EDI on firm performance

Abstract

PurposeThe purpose of this paper is to examine the effects of inter‐organization information exchange on supply chain information and relational alignment. Drawing on literature on information systems, supply chain management, and logistics, the paper aims to present a multidimensional framework for considering electronic data interchange (EDI) adoption in supplier management and its effect on information and relational alignment.Design/methodology/approachTheories drawn from resource‐dependent and transaction cost economics, and the resource‐based view of the firm were used to establish hypotheses. Structural equation modeling using survey data of manufacturing firms was used to test the hypotheses and research model.FindingsResults support the central premise that firms must consider EDI adoption in supplier management to improve information and relational alignment between supply chain partners. It is through this alignment that firms achieve superior performance.Research limitations/implicationsThis study used a single respondent from each firm due to cost considerations, and hence might have affected the inter‐rater reliability of the survey data.Practical implicationsResults show that firms should consider EDI adoption in supplier management because of its positive effect on information and relational alignment, which in turn impacts firm performance. However, EDI does not affect performance directly.Originality/valueThe role of EDI adoption in supplier management was examined and shown to indirectly affect firm performance via improved information and relational alignment. Moreover, supply chain information alignment was found to enhance relational alignment among supply chain partners.