Examining alignment between supplier management practices and information systems strategy

Qrunfleh, Sufian and Tarafdar, Monideepa and Ragu-Nathan, T. S. (2012) Examining alignment between supplier management practices and information systems strategy. Benchmarking: An International Journal, 19 (4-5). pp. 604-617.

Abstract

Purpose – The purpose of this study is to examine alignment between supplier management practices and information systems (IS) strategies (i.e. particular IS applications portfolios), and its effects on supply chain integration and supply chain flexibility. Design/methodology/approach – The paper develops a model and hypotheses suggesting that “lean” supplier practices, when aligned with the “IS for Efficiency” IS strategy, have a positive association with supply chain integration. Similarly, “agile” supplier practices when aligned with the “IS for Flexibility” IS strategy, have a positive association with supply chain flexibility. The paper empirically validates the model using survey data from directors and senior managers in purchasing and supply chain functions from 205 manufacturing firms in the USA. Factor analysis was conducted to test convergent and discriminant validity. Hypotheses testing was done via structural equation modeling (SEM) analysis using SMART Partial Least Square (PLS) software. Findings – The study finds that lean (agile) supplier management practices are positively associated with supply chain integration (flexibility). Further, alignment of lean supplier practices and IS for Efficiency enhances supply chain integration, as assessed by a positive moderating effect of IS for Efficiency on the relationship between lean supplier practices and supply chain integration. Research limitations/implications – The study contributes to the supply chain – IS interface literature by developing a theoretical basis for analyzing the benefits of different types of IS applications to particular types of supplier management practices. Limitations are that it considers primarily internal supply chain integration as a representative of the entire supply chain's integration (internal and external), and that it relies on data from one person from each organization responding to the survey. Originality/value – The paper theoretically develops and empirically examines a framework proposing that the respective fit or alignment between lean and agile supplier practices with efficient and flexible IS application portfolios has implications for the integration and flexibility of the particular supply chain.