The role of information systems integration in achieving supply chain agility

Supply chain agility has gained significant attention from both academics and practitioners to master fast-changing markets (Christopher, 2005; Ismail and Sharifi, 2006). Supply chain agility is regarded as an operational strategy, concerning customer responsiveness and flexibility in the supply chain (Prates et al., 2001). But it can be hampered by fragmented employment of information systems (IS) (Broadbent et al., 1999). Studies have shown that the development of IS has rapidly reshaped business processes and supply chain agility has been especially affected (Christopher, 2005). However, the way IS integration, in the context of supply chain agility, improves operational performance is poorly understood (Fawcett and Magnan, 2002; Mabert et al., 2003). A research model is proposed to explore how IS integration contributes to supply chain agility which can be realised through four dimensions-customer sensitivity, process integration, network integration and virtual integration (Van Hoek et al., 2001c). The research is conducted through interviews and surveys across the Chinese automotive industry. Interviews are carried out with senior managers across IS and Supply Chain Management (SCM) -related departments from three Original Equipment Manufacturers (OEM) and five first tier suppliers. 102 surveys are collected from assistant managers or team leaders from IS and SCM-related departments from the cases. Triangulation of the methods improves validity of the results (Bryan, 1995) The results support the factors, data consistency and cross-functional application integration identified in the literature, and extend the indirect causality relationship between data consistency and IS integration. Furthermore, the study supports the importance of IS integration in the context of supply chain agility and identifies the context for the deployment of IS integration through the hierarchy of the four dimensions of supply chain agility from virtual integration, process integration, network integration to customer sensitivity. It is noted that IS integration is necessary, but not sufficient on its own to enable supply chain agility. Other operational and managerial issues have been identified from the cases, supported by the survey analysis, e.g. face-to-face communication, and proper knowledge and skills. Furthermore, the findings reveal the mechanisms of how IS integration can facilitate greater agility in the supply chain, leading to improved operational performance, such as responsiveness, flexibility, dependability, and accurate forecasting. More importantly, IS-enabled supply chain agility focuses on shortening lead time and improving work efficiency to realise fast customer responsiveness rather than providing interactive customized service. Therefore, this research identifies that efficient supply chain agility enabled by IS integration could be the major target in the cost-reduction driven and mass production manufacturing environment