Enabling Supply Chain Agility through IOS Integration and Supply Chain Flexibility

In today’s turbulent environment, competitive pressures and market unpredictability have dramatically lashed business profits. Being agile is an essential ability for firms facing such an environment. However, coping with the hostile business environment requires not only the agility from individual firms but also the collaboration from their supply chain partners. Supply chain agility (SCA) therefore is vital to the competitiveness and performance of a firm and its supply chain partners. Exploring how to effectively enable SCA is significant for both practice and theory development. Recently, firms are increasingly relying on integrated information systems and analytical tools, such as business intelligent systems, and close collaboration and linkage with their supplier chain partners to enhance their responsiveness. The purpose of this paper seeks to broaden the understanding about the enabling roles of IOS integration, analytical ability of IOS, and supply chain flexibility on SCA based on the dynamic capabilities view and real options theory. With 147 matched-pair samples gathered from the top 2000 Taiwanese manufacturing firms, the results of this study support the effect of IOS integration on supply chain flexibility, including offering and sourcing flexibilities, which in turn facilitates SCA. We also propose and show the moderating effect of analytical ability of IOS on the process of enabling SCA. Our results provide the theoretical and practical implications that contribute to a better understanding in the way SCA may be achieved. The model and findings of this study should be able to serve as a basis for future research for studying SCA.