The role of information assimilation capability in implementing IT-enabled supply chain under different task environments

Abstract

Although prior research has generated considerable knowledge on the use of information technology (IT) in managing supply chain (SC) activities, i.e., IT-enabled SC, both real-life cases and research findings have found mixed results. The inconsistent results arise because the contingent factors pertinent to the success of implementing IT-enabled SC are not well understood. Drawing on the Organizational Information Processing Theory, we explore these factors and investigate whether the strength of the association between IT-enabled SC implementation and business performance is contingent on these factors with a focus on the information assimilation capability (IAC) of firms and the task environment. Specifically, we (i) explore if there exist different types of firms in terms of their IT-enabled SC implementation by building on the General Systems Theory, (ii) examine the performance implications of implementing IT-enabled SC, (iii) develop and empirically test a theoretical model that explains the relationships amongst IT-enabled SC, IAC and business performance, and (iv) investigate the performance impacts of implementing IT-enabled SC under different task environments. To achieve these objectives, both quantitative survey and qualitative case study research methods were employed to obtain empirical data for answering our research inquires. The former enables us to collect a large array of data to generalize the findings, while the latter allows evidence triangulation and "how" and "why" explanations for the data collected from 188 trading firms with in-depth representative case-based information. From our empirical data analyses, we found that IT-enabled SC implementation is positively related to operational performance of suppliers, operational performance of customers, and financial performance. The positive association between IT-enabled SC implementation and various performance measures are contingent on IAC and task environment. Through in-depth investigations with eight purposely selected respondent wholesale trading firms showing different patterns of implementing IT-enabled SC, we identified, and explained how, the factors of numbers of suppliers and customers, IT resources allocation and vertical integration affect the extent to which IT-enabled SC is implemented and the consequential performance outcomes.