Information and Communication Technology Impact on Supply Chain Integration, Flexibility, and Performance

Information and Communication Technology Impact on Supply Chain Integration, Flexibility, and Performance

Carlos A. Talamantes-Padilla (Universidad Autónoma de Ciudad Juárez, Mexico), Jorge Luis. García-Alcaráz (Universidad Autónoma de Ciudad Juárez, Mexico), Aide A. Maldonado-Macías (Universidad Autónoma de Ciudad Juárez, Mexico), Giner Alor-Hernández (Instituto Tecnologico de Orizaba, Mexico), Cuauhtemoc Sánchéz-Ramírez (Instituto Tecnológico de Orizaba, Mexico) and Juan Luis Hernández-Arellano (Universidad Autónoma de Ciudad Juárez, Mexico)
DOI: 10.4018/978-1-5225-0654-6.ch011


In this chapter, four latent variables will be analyzed to measure the impact of Information and Communications Technology (ICT) on the integration, flexibility and performance of Supply Chain (SC). The aim of the exposition is to provide greater understanding for those responsible of the supply chain, and focus efforts on clear objectives. These clear objectives should help those responsible for the supply chain achieve a better performance within organizations. The information analyzed was obtained from a questionnaire provided to 284 managers in companies located in Ciudad Juarez, Mexico. The results were used to generate a structural equation model in order to learn the relationships between variables. We have postulated six hypotheses regarding the direct, indirect and total effects. The results indicate that there is no direct relationship between ICT integration and SC performance, but an indirect relationship through mediating variables as SC Integration and Flexibility exists.
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Supply Chains

The Supply Chain study has taken an important role within companies, because it is formed by all the institutions and processes that are involved in meeting the customer needs; starting from the extraction of raw materials to finished product and delivery to the end costumer. Efficient administration of supply chains can provide significant competitive advantage and increase organizational performance.

Supply Chain management is defined as the integration of key business processes from end customer until original suppliers that provide products, services and information, which add value for customers and stakeholders of the company (Lambert, Cooper, & Pagh, 1998; Themistocleous, Irani, & Love, 2004; Yu, Suojapelto, Hallikas, & Tang, 2008).

The main elements of a supply chain are: customers, retailers, distributors, manufacturers and suppliers and along this chain there is a two-way flow of materials, products, services, payment and information. In Figure 1, these elements are shown linearly; however in practice it is a network of companies connected.

Figure 1.

Components of supply chain

In supply chain management, some factors can affect performance, including working capital, proximity to suppliers and customers, stability of government policies, structure of the supply chain, among others (Acar & Uzunlar, 2014; Capaldo & Giannoccaro, 2015; C. Marinagi, Trivellas, & Reklitis, 2015; Vlachos, 2014). Another critical factor is region infrastructure, both physical and technological, in this sense, ICTs have proven to be an important support in the Supply Chain performance (Acar & Uzunlar, 2014; Catherine Marinagi, Trivellas, & Sakas, 2014; Singh & Teng, 2016).

ICTs and Its Integration into Supply Chains

The term information and communications technology (ICT) includes the set of techniques and devices used for the processing and transmission of data. The ICT concept encompasses all information exchange services, telecommunications networks that support the data exchange and terminals used to access to services (Altés, 2013).

The integration of information and communications technology has proved been indispensable not only in the modern world, but also in the business environment, due to companies established offices and branches in any location regardless of distance, focusing on the benefits that site represents, maintaining trade relations with partners in these points and speeding the material flow. Thus, it is important to maintain communication between departments and branches around the world, this can be achieved by integrating information and communication technology, as well as keeping in touch in an effective and virtual way to all of the different functions and partners in the supply chain (Li, Lin, Wang, & Yan, 2006; Ngai, Chau, & Chan, 2011).

ICT provides organizations with elements to collect, store, enter, share, and analyze data (Swafford, Ghosh, & Murthy, 2008), and as a result, they have become into essential tools for companies. Besides other benefits of maintaining an integrated structure of ICT between companies and their SC are mentioned, such as reducing costs and achieve competitive advantages through real-time response (Themistocleous et al., 2004). It also helps the organization through the efficient information flow, tracking market needs and allowing to move resources in a quick way (Ngai et al., 2011).

Focusing on the ICTs impact on the supply chain integration, it is important to maintain a good structure to promote it, providing business information to the appropriate group in an efficient way, timely and transparent, in addition, it reduces the time needed to share knowledge and information (Pearcy & Giunipero, 2008). Therefore, the following hypothesis is proposed:

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