THE EFFECT OF SUPPLY CHAIN INTEGRATION AND IT USE ON FIRM PERFORMANCE: AN EMPIRICAL STUDY ON SERVICE INDUSTRIES

Abstract

upply chain integration (SCI) has been widely discussed area in supply chain literature.  Based on extended resource based view (RBV), and resource orchestration theory (ROT), our study was conducted to analyze the effects of SCI (i.e. information integration, process integration and measurement integration) on firm’s performance (i.e. operational, business) in service industries in Pakistan. In addition, we investigate the contingency effect of IT use (i.e.  Transaction management, order delivery and customer services, planning & control) on the relationship of integrative Supply chain practices and firm’s performance. We follow step wise hierarchical regression approach by pair wise comparison of performance effect of IT use and each dimension of SCI. Survey data were collected from a sample of firms in food, hospitality, fashion, telecom, IT and retail industries in Pakistan. The empirical results indicate that IT use strengthen the effects of SCI on firm’s performance by significantly moderating the aforementioned relationship. The results demonstrate best model fitted with pair wise interaction between IT use and SCI mechanisms. The study contributes to supply chain literature by analyzing pivotal role of IT use in integrating various supply chain activities in B2 B and B2 C markets. The research has implications for retail managers, service supply chain planners and distribution companies to use IT in integrating supply chain and materializing performance.