| Companies such as Cisco systems, Dell Computers, and Lockheed Martin, have gained significant benefits by effectively deploying supply chain management systems to tightly couple operations with their business partners. On the contrary, other firms have struggled to achieve this level of success. It is not clear how interorganizational systems (IOS) can be used to promote supply chain integration and better firm performance. This study consequently endeavors to examine the relationship between supply chain management systems, supply chain integration, and firm performance.; We draw from multiple theoretical perspectives to develop the research model that posits IOS characteristics as the main antecedent to supply chain integration, which in turn leads to enhanced firm performance. In the process of examining these relationships, we also provide comprehensive conceptualization of IOS characteristics (IOS integration, IOS Intelligence, and System Modularity) and supply chain integration (Flexible Integration, Strategic Integration, and Operational Integration). These conceptualizations are unique and go beyond the limited treatment they have received in extant literature.; Empirical evaluation of the model was conducted through a field survey of 40 manufacturing firms that are primarily in the automotive and aviation industries in USA. The results show that supply chain integration mediates the relationship between IOS and plant level performance. In particular, performance impact of IOS depends on how effectively firms are able to leverage these systems to develop inter-firm process capabilities. Specifically, integration and intelligence characteristics of IOS can enable firms to achieve cost reduction, improve processes, and become more responsive to their customers. However, the mediation effect suggests that this relationship is dependent on the extent to which certain facets of IOS are effectively utilized in enhancing supply chain integration. The results also show that system modularity does not help in promoting supply chain integration and its role within a supply chain context requires further examination.; This study furthers theory development by proposing that performance impact of IT systems should be examined based upon how effectively firms are able to use them to develop unique processes and routines. Recommendations to managers are provided along with future avenues for research. |
