The effect of IT on information sharing and supply chain performance: Case study of automotive industry

Applied mathematics in Engineering, Management and Technology 2014

The special issue in Management and Technology (Sep. 2014):645-657

www.amiemt-journal.com

645

Abstract

Today, the increase of competition and unstable conditions in business made

various organizations that for sustainability or attaining more profit create a strong

supply chain. It can be said that creation and managing such supply chain requires

having key information of all the partners of that chain. Despite the environmental

instabilities, having access to such information without information systems is

impossible. However, only having access to the highest and the best technology

levels and information systems to meet the supply chain needs is not adequate, it is

required to identify the needs rapidly and plan for the best strategy. The correct

information sharing in all levels of chain and partners pave the way to achieve this

aim. The present study investigates the role of information technology (IT) in

information sharing and improving supply chain performance. To do this, based on

the increase of IT application in automotive industry, supply chain in industrial

group of Iran Khodro is selected for evaluation. Then, the structural equations

modeling method is used to analyze the information. The results of the study showed that IT had directly significant

association with information sharing. Also, information sharing had also directly significant association with supply chain

performance that is divided here into capability, responsiveness and flexibility and this association is stronger with

capability than other factors.

Keywords: IT, Information sharing, Supply Chain, Capability, Responsiveness, Flexibility

1- Introduction

The organizations are not in vacuum. Any organization including big companies, state companies with small

business want to meet the demands of customers and various stockholders. Thus, they need materials,

equipments, facilities and suppliers from other organizations. The performance of the organization is affected

by the activities of other organizations forming supply chain. The efficiency and effectiveness of any

organization is the result of management performance and supply chain of the organization. The survival secret

of the current organizations is in understanding the customers’ needs and rapid response to these needs [5].

Supply chain is including all the activities related to goods and services exchange from raw materials stage to

final product stage being consumed by the customer. These exchanges besides materials flow including

financial and information flow [5]. Figure 1 exhibits a general view of a supply chain [6].

Figure 1- General view of supply chain

Internal supply chain

Suppliers Customers Purchase Production Distribution

The effect of IT on information sharing and supply chain

performance: Case study of automotive industry

Mohammad Reza Taghva and Faezeh Ghanepasand Foomani Faculty of Management and Accounting, Allameh Tabatabe'i University, Tehran, Iran.

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The supply chain is including a network of participators and various operational channels from the inside and

outside of the organization affecting the utility of supply chain outputs. The main goal of the activities of supply

chain is meeting the demand of customer as the required product can be delivered with the maximum quality,

minimum price and required time to the customer [6].

To achieve supply chain competitiveness, giving services to customers should be on priority. Today,

competition between individual firms is replaced by competition between supply chains. One of the necessary

capabilities to achieve competitiveness of supply chain is information sharing. Information sharing refers to

company capability for knowledge sharing with the partners of supply chain in effective and efficient method.

Effective information sharing is considered as one of the main capabilities of supply chain process [5]. In

supply chain, to optimize internal processes of chain, each member should be consistent with other members of

chain [6].

Slow response to market changes and high production costs reduce competitiveness gradually and the solution

to this problem is using IT [10].

IT is one of the main factors in economy progress in recent century with unavoidable role in production

improvement and growth. The evidences showed that investment in IT had high output mean in enterprise and

section levels and output of IT emerged earlier than productivity wave in the late 1990s in the world [7].

Uniform IT supports flexibility and uniform supply chain [10]. The role of information systems in

organizational performance is changed effectively and information systems now create value for organization

[6].

Information systems play the role of uniformity and coordination between various sections of supply chain and

the efficiency of this system has direct effect on efficiency of supply chain performance [6].

Most of the recent evidences showed that the organizations attain many benefits via using IT and good

productivity is attained by information sharing [10].

IT in supply chain by some methods affects the performance. First, a uniform system via better responsiveness

to the problems of customers and demands can attain profit. Second, information sharing possibility by IT can

increase sale secretly [10].

2- Background of the study

In modern business environments, the manufactures by increasing pressure of customers’ requirements in

customization of product are faced with improving the quality and responding the demand. To keep business

under these pressures, most of the companies attempt to develop the long-term strategic partnership with a few

supplier and collaboration with them as the increasing competitive requirements in efficiency, cost and

responding the customer obliged the companies to create strategic partnership with suppliers, minor customers

and providers of logistic services for using their capabilities and providing new value for customers and this

leads to the formation of supply chain management concept [3].

Today, IT is considered as the required requirement for effective control of complex supply chains. A supply

chain that is integrated with IT system is chain in which all important organizational commercial relations with

suppliers and customers are activated or deactivated electronically [10].

IT by adjusting work processes is important in productivity improvement and services quality and keeping

comprehensive database about the customers, suppliers, employees, processes and projects of the development

and progress of organization. This technology by providing logical solution for management with the reduction

of costs and time attempt to control and supervise all affairs from a central point [2].

Based on the studies conducted on the role of information systems in supply chain, the existing papers in this

regard are divided into six general groups: Planning information systems in supply chain, IT infrastructure in

supply chain, E-commerce and supply chain, IT management and knowledge in supply chain, implementation

of IT in supply chain, electronic organizations and supply chain. Today, the effect of IT is found in production

information systems. These systems by reduction of weaknesses of producers and suppliers could bring

competitive advantage for organizations and this is the goal followed by planning information systems. Today,

in global level, price is the most important fact of continuance. Normally, supply management is created for this

to eliminate the activities without value-added and provides the possibility that organizations can present lower

prices. IT in all stages reduced both process costs and better decision [6].

Supply chain competitiveness in recent years at the same time with the development of supply chain

management concept is discussed widely. The researchers believe that companies inside supply chain via

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developing closer relations with supply chain member companies can achieve sustainable competitive

advantage and reduce time and costs significantly based on correct supply chain management, while responding

the customer demands. In competitive environment, a successful supply chain is useful in promoting company

competitiveness.

Another group based on resources-based view showed that supply chain capabilities by IT can make the

company distinctive and inimitable from that of competitors [5].

The decisions of supply chain are classified based on time and operational considerations. In the designing

stage of this chain, the company decides about its structuring and performance of the process of each step. The

company should be ensuring that supply chain configuration supports strategic goals of company during this

stage [6].

To improve supply chain efficiency over time, it is required to measure chain performance in definite time

intervals. In order to have exact evaluation of this case, it is required to design some indices in this regard [6].

The role and effectiveness of information systems is developing in organization. One of the key goals of

planning information systems in organization is defining registration and documentation opportunities of

knowledge in organization. Today, the greatest challenge in organization is that we know whether the

information we have has the high quality or not. This quality is summarized in flexibility, accuracy, reduction

of time, consistency, reliability of source and its completeness [6]. In the present study, the impact of IT

progress and its consistency with the goals on supply chain is investigated.

3- Review of literature

Totally, the review of literature identified various discussions in accepting the relationship between IT,

information sharing and performance of supply chain [5]. Thus, an empirical study was done to investigate the

relationship between these three variables via the test.

Some study hypotheses based on the identified findings are including:

Hypothesis 1: IT, affects information sharing.

Hypothesis 2: Information sharing affects capability of supply chain.

Hypothesis 3: Information sharing affects responsiveness of supply chain.

Hypothesis 4: Information sharing affects flexibility of supply chain.

Later, by the comments of experts, a model is designed and shown in figure 2.

Figure 2: Research model

3-1 IT

IT is a revolution with the aim of creating the foundation of electronic supply chain. The intelligent application

of IT makes information exchange electronically and avoids extra information entrance and provides required

information at required time and let the managers receive complex information effectively and follow it and

exchange the information among the chain members easily and the relationship between supplier and customer

is improved widely [1].

Supply chain is including uniform processes and provides product, services and information creating the

customer value added. The purpose is reduction of uncertainties in demand, delivery time, quality and

competition in chain. Porter and Miller believe that using IT in all activities of supply chain develops created

value potential. Today, management capability of information flow is a critical weapon for leadership on the

razor edge of the organizations. IT can manage information flow and affect most of the dimensions of supply

chain including quality costs, flexibility and organization profit. IT communicates between the supports and

partners of supply chain. Handfield and Nikel regarding the importance of IT in determining the final success in

IT Information

sharing Responsivenes

s

Capability

Flexibility

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supply chain management conducted some studies and the evidences showed that IT is a necessary factor for

survival of supply chain management projects [11].

3-2 Information sharing

Today, information sharing is increasingly an important issue in supply chain and it has significant effect on

supply chain costs. The first aim of information sharing is facilitating information flow and improving the

efficiency and effectiveness of supply chain and responds the demands of customers more rapidly than the

members inside the organization [12]. Information sharing is effective due to the intersection of supply chain

and creates value-added for it [13,14].

Information sharing methods is changed with the concentrated information being applied by IT. The relations

between the manufacturers and retailers are improved via information sharing [14]. Totally, improving

information sharing has important positive effect on supply chain performance [9].

Information sharing is a tool to achieve dynamic supply chain and reduction of internal and external

environment uncertainties [15] and is effective by the impact on the costs and services level on supply chain

performance [16].

Although information sharing is important, the importance of its effect on supply chain depends on the fact that

which information when, how and by whom is shared [16]. Information sharing can create effective

improvement in supply chain performance. In addition, the companies by its aid can re-design the strategies of

their supply chain to achieve more profit. Most of the papers showed positive impact of information sharing on

supply chain [17].

3-3 Capability

To achieve leveling in IT, the organization needs to developed uniformed capabilities at high level [18]. The

difference in organizational performance namely is due to the distinctive resources and valuable, rare,

inimitable and unchangeable resources [18].

Supply chain management is faced with some challenges including trust and collaboration between the partners

of supply chain, determining the best actions that can facilitate consistency and uniformity of supply chain

process and successfully implement the latest information systems stimulating the efficiency, performance and

quality of supply chain. Thus, reliability of supply chain performance is in delivery of good product at

appropriate time, place and quantity to an appropriate customer [3]. If the supply chain capabilities act well,

supply chain strategies act successfully [5].

3-4 Responsiveness

Supply chain responsiveness is defined as a field of consistent response of the members of supply chain to

environmental changes. Responsiveness of supply chain considers dynamic nature of supply chain capabilities

and allowing the company to develop and revise the special capabilities of the company and give better

response to the environmental changes [18]. The current complex market needs permanent and efficiency

response from all members of supply chain [5].

Genaskaran et al considered supply chain a network of enterprises that can create wealth for their beneficiaries

in a competitive environment and respond the requirements of varied market as rapidly with high effectiveness

in costs [4].

3-5 Flexibility

Flexibility is the agility of supply chain in respond to market changes to acquire or keep competitive advantage

[3].

An agile supply chain emphasizes on increasing flexibility and adaptability and has rapid and effective response

to the market changes. Agile supply chain was raised as supply paradigm in 21th century and is considered as

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win strategy of the companies considering the market leadership at international level. The existing approaches

in agility of supply chain investigate the promotion of internal agility features of enterprise by supply and

demand of the end of network. These approaches attempt to coordinate network physically with market

requirements and competition and changing the production processes inside supply chain and behavioral and

communication analysis between the members of supply chain [4].

3-6 Supply chain performance

The evaluation of supply chain performance was challenged by the researchers from the past. In a general

division, the measurement methods of supply chain are classified into five groups of evaluation methods of

traditional performance, performance evaluation systems at global level, balanced scorecard model, and specific

models of each supply chain [5].

Finally, by concluding the information obtained of the studied resources of Table 1 in accordance with the

mentioned model, the explanation of the criteria of each of the variables is expressed separately.

Table 1- Explanation of study criteria

Criterion Criterion explanation Author

IT

Internal organizational facilities Li,Wu

Support and technology development Li,Zhou

Consistency with partners Wu

Information

sharing

Sharing Li,Cheng,Zhou

Information flow Rahman Seresht Wu,Tseng

Information quality Zhou,Li,Cheng

Capability

Good product delivery Manian

Information exchange Wu

Coordination Wu

Uniformity Wu

Information transparency Wu

Information analysis Wu

Responsiveness

Response time , Amid cheng

Responding the environmental changes Li

Speed in presenting the products Manian

Responding the environment changes , Rahman Seresht Zhou,Tseng

Response to customer wu,Zhou

Permanent and efficient response Rahman Seresht

Flexibility

Keeping competitive advantage Manian

Rapid reaction Tseng

Speed Jafarnejad

In addition, based on the study, the good index for evaluation of each of them is shown in Table 2 separately.

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Table 2- The indices of evaluation of study criteria Criterion Criterion explanation Evaluation index

IT

Internal organization

facilities 1-IT enables organization to increase information sharing levels.

Technology support and

development

2- The required infrastructures for development and improving of performance are

predicted by IT.

3-Software-hardware easily can control the infrastructures of IT.

4- Software/hardware can easily and rapidly adapt themselves with the changing

needs and standards.

Consistency with partners 5- Technology level of you and your partners are leveled for sharing

Informatio

n sharing

Sharing 6- The organization has the adequate ability for standard information sharing with the

customers and suppliers.

Information flow 7- By IT information is flowing easily

Information quality 8- There is assurance of information quality

Capability

Good products delivery 9- There is the ability of delivery of the received orders in the predicted date.

Information exchange 10- Assurance of access to the required information for force major decisions

11- The required decisions are given to the users on time.

Coordination 12- There is consistency in response between the partners of supply chain with the

defined systems.

Uniformity

13- There is reliability of collaboration of other partners of supply chain.

14- Multi-duty integration: operationalization of synergic activities in the form of

operational processes being managed

15- Improving the integrity of the activities in supply chain.

Information transparency 16- There is assurance of the accuracy of the available information.

Information analysis 17- The organization is empowered to information analysis

Responsive

ness

Response time 18- Response time in supply chain is reduced.

Responding environmental

uncertainties

19- Identification of problems is possible by collected information

20- Improving decision making after one time providing reliable information

Speed in presenting the

products

21- Delivery speed: The ability of reducing time between receiving order and delivery

to customer

Responding the environment

changes

22- The access to required data for general and macro decision making

23- Information systems have specific flexible services consistent with the varied needs

of the customers.

Responding the customer 24- There is ability to respond to the key customer needs and desires.

25- There is the ability of responding the unplanned and unique needs of customer.

Permanent and efficient

response 26- There is assurance of on time receiving information

Flexibility

Keeping competitive

advantage

27- Creative and rapid solutions are presented by information

28- There is good application of opportunities based on information

Rapid reaction

29- There is the ability of evaluation of solutions based on information

30- The ability of selecting the best solution based on information

31- There is consistency with the unexpected operational conditions

Speed 32- The collection and processing required information is done rapidly

4- Research methodology

The present study was aimed to indentify the role of IT on information sharing and supply chain performance.

As information sharing is intermediating variable, IT as independent variable and supply chain performance as

dependent variable are investigated via questionnaire. The study was descriptive-survey based on correlation

analysis and regression.

The study population was managers, supervisors and experts of supply chain of Iran Khodro industrial group.

Based on the definition of study population, the study scope of this stud y was supply chain of mentioned

industrial group and its time scope was summer 2012. In this study, the managers and experts of supply chain

by stratified random sampling were selected as study sample. As the population size was infinite and not

identified, with confidence interval 95% and accuracy 10%, the lowest sample size was calculated as

followings:

𝑛 = --𝑍∝

2 × 𝛿

휀

2

= 1.96 × 0.667

0.1 2

≅ 171

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200 questionnaires were distributed among managers, supervisors and experts of supply chain and finally 180

completed questionnaires were returned. It can be said that all the respondents had at least 5 year experience

and at least 2 years was about supply chain.

The information of theoretical basics and study literature were provided from library, papers and internet

network. Also, data collection and information for analysis were done via questionnaire. The designed

questionnaire had 32 questions with 5-item Likert scale. The questionnaire was investigated at first in terms of

face and content validity and this was done by the experts. Reliability is one of the technical features of

measurement instrument. The mentioned concept deals with the issues that measurement instrument under

equal conditions how much equal results are given. In this study, to determine reliability of questionnaire,

Cronbach’s alpha was used. This method applies measures as questionnaires or tests measuring the various

attributes to compute internal consistency. The acceptable level of Cronbach’s alpha for applied goals was at

least 0.7.

This method is used to calculate the internal consistency of the measures. To calculate the coefficients of

Cronbach’s alpha, at first the variance of the samples of each subset of total questionnaire is calculated, then by

the following equation, the alpha is computed [8].

Reliability test of the questionnaire was done for 40 samples. As is shown, Cronbach’s alpha for all the

variables was more than acceptable value for applied goals as 0.7. It can be said that the required questionnaire

had acceptable reliability. The results of the study are shown in Table 3.

Table 3- Cronbach’s alpha test for reliability of the questionnaire

Variables No. of questions Number of

questions

Number of

samples Cronbach’s alpha value

IT 1 - 3 3 40 0.748

Information sharing 4-9 6 40 0.895

Capability 10-17 8 40 0.736

Responsiveness 18-26 9 40 0.837

Flexibility 27-32 6 40 0.755

Total questionnaire 1-32 32 40 0.937

5- Data analysis

To investigate the causal relation between the variables, many attempts are done in the recent decade. One of

the hopeful methods in this regard is structural equations model or multi-variate analysis with latent variables.

This method is used as causal model and covariance structure analysis. By this method, acceptability of the

theoretical models in special populations by correlation data in experimental and non-experiment conditions is

tested. The structural equations model is a special causal structure between a set of unobserved constructs.

These constructs are measured via a set of observed variables. A complete structural equation model is

consisting of two components:

a. A structural model predicting the special causal structure among latent variables.

b. A measurement model defining the relations between latent variables and measured variables [8].

A structural equations model is including some measurement components that is defined via the relationship

between the circles (latent variables) and the related rectangles (measured variables ). Based on factor analysis

logic, using some measurements of theoretical variable allow us to extract the common factor among the

measured variables related to latent variable. Normally, for each latent variables, there are 2 to 4 measured

variables [8].

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In figure 3, the standardized factor loads, the relationship between independent variables and intermediary and

dependent variables is shown. As the estimation values are as standard, they are compared easily. Thus, it can

be said easily which independent variable has more impact on intermediary and dependent variable. It can be

said that besides factor loads, error values of each factor load is shown in figure 3 and normally the lower the

errors, the more suitable the fitted model.

In Figure 3, the estimation of standardized factor loads (standardized regression coefficients) of conceptual

model is shown. In figure 3, the results of structural equations analysis model, the relationship between

independent variable of IT, intermediary variable of information sharing and dependent variables of capability,

responsiveness and flexibility is evaluated.

Figure 3: The estimation of standardized factor loads of conceptual model of the study

As is shown in figure 3, in IT variable, the relationship between first index is 0.01, second index is 0.97 and the

third index is 0.87. The relationship between first index is very weak and the second and third indices have

direct and strong relationship. It can be said that the relation of second index is more that other indices.

In information sharing variable, the first index relation is 0.85, second index is 0.63 and third index is 0.59. The

relations of three indices are direct and almost strong and the relationship of the first index is more than other

indices.

In capability variable, the relation of the first index to the sixth index is 0.59, 0.57, 0.51, 0.67, 0.67 and 0.61,

respectively. The relationship between all indices of variable of capability is direct and almost strong and the

relation of the fourth and fifth indices is more than other indices.

In responsiveness variable, the relation of the first to sixth index is 0.83, 0.83, 0.47, 0.82, 0.58 and 0.82,

respectively. The relationship between all indices of responsiveness variable is direct and almost strong and the

relation of the first and second index is more than other indices and after these two indices, the fourth and sixth

indices with difference 0.01 have the greatest relation.

In flexibility variable, the relation of the first index is 0.64, second index is 0.79 and third index is 0.75. The

relation of three indices is direct and almost strong and the relation of the second index is more than other

indices.

After the investigation of the relation between each of indices with variables, the relationship between

independent, intermediary and dependent variables is investigated. Based on the direct relationship between

independent variables and intermediary variables and the direct relationship been intermediary variable and

dependent variables, the degree of the indirect relationship of each of independent, intermediary variables with

dependent variables is estimated. The direct and indirect relation between the study variables is shown in the

following tables.

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Table 4- The degree of the direct relationship between study variables

Intermediary and dependent variable

Independent and intermediary variable

Information

sharing Capability Responsiveness Flexibility

IT 0.87 - - -

Information sharing - 0.91 0.7 0.66

Table 5- The degree of direct and indirect relationship between study variables

Intermediary and dependent variable

Independent and intermediary variable

Information sharing Capability Responsiveness Flexibility

IT 0.87 0.87 × 0.91= 0.79

0.87 × 0.70= 0.61

0.87 × 0.66= 0.57

Information sharing - 0.91 0.70 0.66

As is shown in Table 4, it can be said that in the first column of independent and intermediary variables of the

study, in the next column the direct impact of independent variable of IT on intermediary variable of

information sharing is shown. Finally, the direct impact of independent and intermediary variables on

dependent variables is shown. In Table 5, the indirect impact of IT variable on dependent variables is shown.

By Table 4 and Figure 1, the followings are presented.

- Independent variable of IT has impact 0.87 on intermediary variable of information sharing and the impact

is direct and strong.

- Intermediary variable of information sharing has impact 0.91 on dependent variable of capability and the

impact is direct and very strong.

- Intermediary variable of information sharing has impact 0.70 on dependent variable of responsiveness and

the impact is direct and almost strong.

- Intermediary variable of information sharing has impact 0.66 on dependent variable of flexibility and the

impact is direct and almost strong.

After the investigation of direct effect of study variables on each other, the indirect impact of variables is

calculated. These relations are shown in Table 5.

- Independent variable of IT had indirect impact 0.79 on dependent variable of capability. This impact is

obtained of the product of the impact of independent variable of IT on information sharing (0.87) and direct

impact of information sharing variable on capability variable (0.91). This impact is direct and strong.

- Independent variable of IT had indirect impact 0.61 on dependent variable of responsiveness. This impact

is obtained of the product of the impact of independent variable of IT on information sharing (0.87) and direct

impact of information sharing variable on responsiveness variable (0.70). This impact is direct and almost

strong.

- Independent variable of IT had indirect impact 0.57on dependent variable of flexibility. This impact is

obtained of the product of the impact of independent variable of IT on information sharing (0.87) and direct

impact of information sharing variable on flexibility variable (0.66). This impact is direct and moderate.

After the evaluation of the relations between the variables in structural equations analysis, it can be said that all

the relations explained were not significant. To determine the significance of each of the mentioned relations, t-

student statistics is used. If the t-student t statistics is not ranging -1.96 to -1.96, it shows that the parameter at

the level 5% has significant difference with zero, null hypothesis is rejected and the mentioned impact is not

rejected. Indeed, this statistics tests the equality assumption of parameter with zero.

In structural equations model, it is better the equality assumption of the relations with zero is rejected. Thus,

the hypothesis test is as:

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:

:

H

H

0

1

0

0

Based on t-student statistics for each of the indices that in figure 4 called t-student is shown, if statistics is more

than 1.96, null hypothesis is rejected, the relations are significant. But if the statistics is less than 1.96, null

hypothesis is not rejected, the relations are not significant. Besides the investigation of relations significance, the errors values are investigated. For the shown errors figure

4 with factor loads, it is better these errors are equal to zero. It is expected that the following null hypothesis is

not rejected:

:

:

H

H

0

1

0

0

Based on t-student statistics in the figure 4, if t-student value is more than 1.96, null hypothesis is rejected and it

shows that with significant value of error we are faced but if t-student statistics value is less than 1.96, null

hypothesis is not rejected and this shows that error is not significant. In most cases, these errors are significant

and if factor loads of the variable or index are more than 0.5, these errors are ignorable.

T-student statistics value is shown in Figure 4.

Figure 4- The values of t-student statistics of conceptual model of study

Based on t-student statistics value in Figure 4, as t-statistics values for the relation between first index of IT

variable is lower than 1.96, this relation is not significant but as t-statistics value for other relations and impacts

is more than 1.96, these relations are significant.

Based on t-student statistics values of errors, it can be said that the values of this statistics for all indices and

variables except two variables of IT index is more than 1.96 and this shows that with significance value of error

we are faced, these errors are occurred due to the low number of sample sizes and are ignored based on the

strong factor loads.

After the investigation of regression coefficients and model errors, we investigate the total fitness of model. At

first multiple coefficient of determination of fitted model is investigated. The multiple determination

coefficients shows variance value determined of dependent variables by independent variable in the model. This

statistics for each of the indices is calculated separately. These coefficients show that each index alone

determine what percentage of the dependent variable changes. The coefficients of determining the study model

are shown in the following Tables.

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Table 6- The coefficient of determination of IT variable indices

Index IT 1 IT2 IT3

Coefficient of

determination 0.000 0.94 0.75

Table 7- The coefficient of determination of information sharing variable indices

Index Information sharing 1 Information sharing 2 Information sharing 3

Coefficient of

determination 0.72 0.40 0.35

Table 8- The coefficient of determination of capability variable indices

Index Capability 1 Capability 2 Capability 3 Capability 4 Capability 5 Capability 6

Coefficient of

determination 0.35 0.32 0.26 0.45 0.45 0.37

Table9- The coefficient of determination of responsiveness variable indices

Index

Res

po

nsi

ven

es

s 1

Res

po

nsi

ven

es

s 2

Res

po

nsi

ven

es

s 3

Res

po

nsi

ven

es

s 4

Res

po

nsi

ven

es

s 5

Res

po

nsi

ven

es

s 6

Coefficient of

determination 0.69 0.68 0.22 0.67 0.34 0.68

Table 10- The coefficient of determination of flexibility variable indices

Index Flexibility 1 Flexibility 2 Flexibility 3

Coefficient of determination 0.41 0.63 0.56

The coefficient of determination of the study variables are including:

Table 11- The coefficient of determination of study variables

Index Information sharing Capability Responsiveness Flexibility

Coefficient of

determination 0.76 0.83 0.49 0.44

The multiple coefficient of determination of information sharing in structural equations model is 0.76. It means

that information sharing variable alone can determine 76% of the above model. The coefficient of determination

of other variables is observed in the above table. In the next stage, the model significant is investigated by some

criteria as chi-square, RMSEA, GFI,CFI and etc. To investigate Chi-square, significance level with p-value is

used. To investigate the total significance of the model, goodness of fit indices of fitted model with the

interpretation criterion of each index are shown in Table 12.

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Table 12- Goodness of fit indices of conceptual model fitness

Result Criterion Index value Goodness of fit indices

Good fit

- 644.71 χ2

CMIN

- 185 Df

>0.05 0.000 p.value

Unsuitable

fit <2 3.48 χ2/df

Good fit Close to zero 0.062 RMR

RMR, GFI

Good fit Close to 1 0.94 GFI

Unsuitable

fit Close to 1 0.87 AGFI

Good fit >0. 5 0.59 PGFI

Good fit <0.05 0.012 RMSEA RMSEA

Good fit >0.90 0.92 NFI

Baseline

Comparisons

Good fit >0.90 0.95 NNFI

Good fit >0.90 0.98 CFI

Unsuitable

fit Close to 1 0.88 RFI

Good fit Close to 1 0.98 IFI

The investigation of the fitness indices showed that based on criterion of each index, the model is well fitted.

Thus, the study model could determine the relations between the study variables. In the above table, the lack of

good fit by chi-square is shown. This index is one of the important indices in determining model fit that is

dependent upon the sample size and by the increase of sample size, its significance probability is increased. In

this study due to the low sample size, chi-square is not significant and based on the significance of other

important indices as RMSEA, GFI,CFI, it is ignored.

6-Conclusion and recommendation for future studies

The present study aimed to investigate the effect of IT on information sharing and its role in supply chain

performance. In this regard, four hypotheses are raised and by reviewing the results of statistical analysis, it can

be said that IT had directly significant association with information sharing. According to the results regarding

the hypotheses 2,3,4 showing the impact of information sharing on capability, responsiveness and flexibility, it

can be said that information sharing had direct and significant association with three indices of performance but

this relation with capability index was very high and comparison had low impact on supply chain flexibility. In

other words, based on the mentioned evaluation indices, it can be said that information sharing had the major

impact on suitable product delivery, information exchange, coordination, integration, transparency and

information analysis and in comparison with it, the impact on time responsiveness, responding the

environmental changes, responsiveness to customer, competitive advantage and rapid reaction were low. It can

be said that in using various levels of IT and designing supply chain information systems, it can be said that

considerable changes are created in supply chain performance namely its capabilities.

Finally, based on the study and achieved results, for future studies, it is recommended that this model is

investigated as comparative study in other industries to compare the results in various industries with each

other. Also, the model is studied for other dependent variables of supply chain performance.

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