The Consequences of Information Technology, Information Sharing and Supply Chain Integration, towards Supply Chain Performance and Firm Performance

Abstract

This paper presents the concerns in manufacturing supply chain. Further this study investigates the role of information technology (IT) and information sharing (IS) in manufacturing supply chain and determines its impact towards supply chain integration (SCI), supply chain performance (SCP), and manufacturing firm performance (FP) in Malaysia. The theoretical framework was proposed for the study on the basis of existing literature. The study administered a survey questionnaire to collect data from manufacturing firms in Malaysia with 112 respondents. A multiple regression analysis is conducted to establish the relationship between IT, IS, SCI, and FP. The study finds that IT and sharing has significant positive effect towards and performance. Firms that use IT and practice IS across partners in the supply chain are more likely to integrate their internal and external value chain for better performance both within and across the manufacturing firms in the supply chain. This study can be of interest to the manufacturing industry as well as other industry practitioners interested in improving the performance of the organization and supply chain in total. For supply chain practitioners, this results indicate that the firms should adopt IT and IS practices to strategically improve SCI. This in turn will also improve the supply chain network and firm’s performance. This study employs a newly developed framework which depicts the causal relationship between IT, IS, SCI, Supply Chain Performance, and FP in Malaysia. Furthermore, it closes a gap in existing literature by examining the effect IT and communication (ICT) practices toward manufacturing firms’ performance and SCP in a single setting. In addition, the current study attempted to construct a model which would estimate and interpret SCP and FP simultaneously, and to evaluate this model in an empirical fashion.