The impact of information technology use on plant structure, practices, and performance: An exploratory study

Abstract

AbstractFirms have been investing millions of dollars on information technology (IT) in their manufacturing plants. However, the research literature is unclear about the extent and scope of the impact of IT use on plant operations. This study examines the impact of IT use on the structure, practices, and performance of manufacturing plants. Drawing on information systems and operations management literature, the study differentiates between plant IT use (i) at the process level, (ii) due to internal process integration, and (iii) due to customer and supplier collaboration, labeled as process intelligence, integration intelligence, and collaboration intelligence, respectively. The study also accounts for intelligence gathering due to statistical process control (SPC) practices. The proposed impacts of IT use are examined using data from a study sample of manufacturing plants from electronics, machinery and transportation component industries. Overall, the evidence suggests that SPC has a broader and more significant impact on many aspects of plant operations than the individual dimensions of IT use. However, the three dimensions of IT use do exhibit distinct effects on plant structure, practices, and performance. Process intelligence tends to be associated with plant size and productivity, while integration intelligence and collaboration intelligence tend to be associated with work practices related to increased organizational decentralization and a flexible technology focus.