Over the past decade, an important focus of researchers has been on supply chain management (SCM), as many organizations believe that effective SCM is the key to building and sustaining competitive advantage for their products/services. To manage the supply chain, companies need to adopt an SCM strategy (SCMS) and implement appropriate SCM practices. However, different SCM strategies and practices require support from appropriate information technology (IT) applications and their usage. To effectively manage the supply chain, there is therefore a need for aligning these applications and their usage with the supply chain strategy and practices of the firm. While the literature on IT-business alignment has mainly focused on various aspects of the alignment between information systems (IS) strategy (ISS) and business strategy, it is largely deficient in offering an understanding of how specific supply chain strategies should be aligned with relevant IS strategies. Similarly, prior studies on SCM have developed considerable detail on supply chain strategies, without enunciating the implications of these strategies for the use of IT. Additionally, many studies have examined the importance of implementing SCM practices and their impact on supply chain and firm performance without identifying the corresponding IS usage that might be required for executing those practices in a more effective manner. Thus, there are no studies that explore the alignment between SCMS and ISS and between SCM practices and the usage of IT. This study contributes to the literature of SCM and IT by examining the alignment between the supply chain and information systems (SC-IS) at two levels. First, it looks at different SCM strategies and assesses appropriately- aligned information strategies that would enhance their effectiveness vis-à-vis their effect on the supply chain and firm performance; this is what this study refers to as alignment at the planning/strategic level. Second, the study looks at SCM practices and identifies corresponding IS usage practices that enhance the success of those practices vis-à-vis their effect on the firm and its supply chain performance; this is what this study refers to as alignment at the practice/operational level. Alignment was assessed using the moderating and mediating methods.Research methods included item development, Q-sort, a large scale survey of 205 respondents, who were mainly purchasing managers/directors of large organizations, and data analysis using Structural Equation Modeling (SEM). The research developed and validated reliable instruments for supply chain management strategy, information systems strategy, IT utilization, the alignment between SCMS and ISS, and the alignment between SCM practices and the usage of IT constructs through an extensive literature review, and then revised the instruments by using pre-test, structured interviews, and Q-sort methodologies. Valid and reliable measures from SCM practices were adapted and validated from previous research to fit the context of the present study.
The research findings suggest that at the strategy level, aligning a particular IS S with the corresponding SCMS enhances supply chain performance and firm performance specific to the type of SCMS. At the operational level, the results suggest that implementation of particular SCM practices requires the use of corresponding IT applications, in order to have an enhanced positive effect on firm performance and supply chain performance. The theoretical contribution of this research is in two domains. The contribution in the IS domain is in introducing alignment concepts in the supply chain context and analyzing ISS/SCMS and IT usage type/SCM practice pairs, the co-presence of which can enhance supply chain performance. The study thus forwards current contingency-based thinking in the IS literature that is beginning to suggest that study of IS deployment or use at the aggregate level might be less informing than looking at specific contexts and requirements against which applications are adopted. In the SCM domain, this research shows the importance of the adoption and use of specific types of IS in achieving enhanced benefits from particular SCM practices and strategies. The study thus extends recent literature that is beginning to recognize the importance of understanding the benefits of different types of IS applications to supply chains. This study also has several important implications for practitioners, by demonstrating to managers the importance of adapting an ISS that matches their SCMS, and the importance of using the appropriate IT applications that match their SCM practices. As a result, the findings help managers to better position, structure, and utilize their IS applications in line with their SCM strategies and practices. So, for instance, if a focal firm acquires a new supply chain related application, it should make sure that the application supports and enhances the supply chain’s ability to achieve its particular goals; this will result in better supply integration and quicker response to customers’ demands, which will allow the firm to achieve its market and financial goals. Therefore, these results should be useful for strategic decision making, especially with regards to investment decisions concerning IT integration in supply chains.