Journal of Operations Management 25 (2007) 13481365

www.elsevier.com/locate/jom

Supply chain practice and information sharing

Honggeng Zhou a,1, W.C. Benton Jr.b,*
a
Department of Decision Sciences, Whittemore School of Business and Economics, University of New Hampshire,
15 College Road, Durham, NH 03824, United States
b
Department of Management Sciences, Fisher College of Business, The Ohio State University, 2100 Neil Avenue,
Columbus, OH 43210, United States

Available online 17 January 2007

Abstract
Effective supply chain practice and information sharing enhances the current supply chain management environment. The
purpose of this study is to investigate the integration of information sharing and supply chain practice in supply chain management.
Data from 125 North American manufacturing firms were collected. The results show that (1) effective information sharing
significantly enhances effective supply chain practice; (2) supply chain dynamism has significant positive influence on effective
information sharing as well as effective supply chain practice. Supply chain dynamism has more influence on information sharing
than supply chain practice; (3) and effective supply chain practice becomes more important when the level of information sharing
increases. The findings show that both effective information sharing and effective supply chain practice are critical in achieving
good supply chain performance.
# 2007 Elsevier B.V. All rights reserved.

Keywords: Supply chain management; Information sharing; Supply chain practice

1. Introduction tion sharing focuses on information flow (Premkumar

During the past 10 years, supply chain management
and information technology management have attracted
much attention from both practitioners and researchers.
As information technology evolves, firms tend to
become more integrated. Therefore, integrating effec-
tive supply chain practice with effective information
sharing becomes critical for improving supply chain
performance. Supply chain practice focuses on material
movement (Chopra and Meindl, 2001), while informa-
* Corresponding author.
E-mail addresses: honggeng.zhou@unh.edu (H. Zhou),
benton.1@osu.edu (W.C. Benton Jr.).
1
Tel.: +1 603 862 0869.
and William, 1994).
In this study, three categories of supply chain
practice are considered: supply chain planning, just-in-
time (JIT) production, and delivery practice. A group of
supply chain practice is regarded as effective supply
chain practice if the selected best practices have been
implemented. Information sharing is another focus of
this study. Information technology investment in
Corporate America has increased significantly. It is
estimated that the US information technology (IT)
spending will reach $497 by 2008 (http://www.itfacts.-
biz). Information technology has had an impressive
impact on supply chain practice. This study focuses on
three aspects of information sharing: information
sharing support technology, information content, and
information quality.

0272-6963/$ see front matter # 2007 Elsevier B.V. All rights reserved.
doi:10.1016/j.jom.2007.01.009
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
Effective supply chain practice and effective
information sharing are two sources of supply chain
improvement. While some companies emphasize
improving supply chain practice, others emphasize
leveraging the information sharing among supply chain
partners. Since these two major approaches are not
independent, firms must work on both supply chain
practice and information sharing simultaneously. As an
example, Toyota, a world class in supply chain practice,
began to implement SAP in late 1990s. The purpose of
this study is to investigate (1) the relationship between
information sharing and supply chain practice, (2) the
influence of supply chain dynamism on information
sharing and supply chain practice, and (3) the impact of
information sharing and supply chain practice on
delivery performance.
In the next section, we review the literature on
supply chain practice, information sharing, supply
chain dynamism, and delivery performance. In Section
3, the relationships among these variables are
examined and the research hypotheses are presented.
In Section 4, the research methodology and measure-
ment scale development are presented. In Section 5,
the model and the results of testing the relationship
among supply chain dynamism, supply chain practice,
and information sharing are given. The model and the
results of testing the relationship among supply chain
practice, information sharing, and delivery perfor-
mance are in Section 6. Section 7 provides the
managerial implications. Finally, Section 8 concludes
the study.
2. Literature review
In this section, we review the literature on supply
chain practice, information sharing, supply chain
dynamism, and delivery performance. The literature
review provides the theoretical foundation for this
research. The literature taxonomy is provided in
Table 1.
2.1. Supply chain practice
In this study, we consider three categories of supply
chain practice (supply chain planning, JIT production,
and delivery practice), because they have been shown to
be closely related to delivery performance (Schroeder
and Flynn, 2001; Supply Chain Council, 2002). Since
other categories of supply chain practice such as
sourcing and product return are not expected to have
significant influence on delivery performance, they are
not considered in this study.
1349
2.1.1. Supply chain planning
Supply chain planning practices are used to process
information from suppliers, customers, and internal
operations. Supply chain planning is driven by two
objectives: (1) make a good forecast of future demand,
and (2) coordinate various functions within a firm and
its suppliers and customers. The importance of supply
chain demand forecast has been well documented (Lee
et al., 1997; Aviv, 2001). The impact of supply chain
forecast on delivery performance has also been well
researched (Cook and Rogowski, 1996; Krajewski and
Wei, 2001). Inter-functional coordination within a firm
is important because the alignment among the functions
is necessary to achieve a firms goal (Hodge et al., 1996;
Womack et al., 1990). Several researchers have shown
the value of the inter-firm cooperation and sharing
information among supply chain partners (Hill, 1994;
Mentzer, 2001; Gavirneni et al., 1999; Lee et al., 2000).
This study measures the effectiveness of supply chain
planning from the extent to which effective supply chain
demand forecast and coordination practices are
implemented.
2.1.2. JIT production
JIT production includes five practices: pull system,
cycle time reduction, cellular manufacturing, agile
manufacturing strategy, and bottleneck removal (Flynn
et al., 1995; Powell, 1995; MacDuffie et al., 1996). In a
pull system, production is driven by customer demand.
The objective is to meet the customers demand in a
precise and timely manner. Reductions in cycle time
allow for running smaller batches, which in turn
improves the quality and timeliness of feedback.
Cellular manufacturing identifies similar products or
similar processes and groups them together. It can
reduce throughout time. An agile manufacturing
strategy allows production systems to cope with rapid
demand changes, which enhances effective supply
chain management. Bottleneck removal balances
resources and maximizes output of production. Overall,
JIT production practices improve the responsiveness
and efficiency of supply chains.
2.1.3. Delivery practice
The extant literature and anecdotal evidence have
shown that effective delivery practices have had
significant impact on supply chain performance (Supply
Chain Council, 2000). Delivery is clearly a competitive
weapon for Dell Computers. Ford recently partnered
with the UPS logistics group to develop and implement
an Internet-based delivery process (Gurin, 2000). Wal-
Mart uses the cross docking technique, in which its
1350 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365

Table 1
Literature review taxonomy
Authors Supply chain practice Information sharing Supply chain Delivery
dynamism performance
Plan JIT Delivery Information Information Information
production practice sharing support content quality
technology
*
Aviv (2001)
*
Boyer et al. (1997)
*
Boyer and Pagell (2000)
* *
Chopra and Meindl (2001)
*
Cook and Rogowski (1996)
*
Dess and Davis (1984)
*
Fine (1998)
*
Fisher (1997)
*
Flynn et al. (1995)
*
Gavirneni et al. (1999)
*
Gurin (2000)
*
Handfield and Nichols (1999)
*
Hill (1994)
*
Hodge et al. (1996)
*
Lee et al. (1997)
*
Lee et al. (2000)
*
Liker and Yu (2000)
*
Krajewski and Wei (2001)
*
MacDuffie et al. (1996)
*
Mendelson and Pillai (1998)
*
Mentzer (2001)
* *
McCormack (1998)
*
McGowan (1998)
*
Miller and Friesen (1983)
*
Neumann and Segev (1979)
*
Petersen (1999)
*
Powell (1995)
*
Ramdas and Spekman (2000)
*
Schroeder and Flynn (2001)
*
Seddon (1997)
*
Stalk et al. (1992)
* * *
Supply Chain Council (2000)
*
Sum et al. (1995)
*
Vijayasarathy and Robey (1997)
*
Womack et al. (1990)
*
means the particular topic was discussed in the particular article. For example, the first asterisk means supply chain planning was discussed in
Aviv (2001).

warehouse serves as a switching station rather than a
stocking place (Stalk et al., 1992). Given the importance
of delivery practice, a formal measurement scale has yet
to be developed. Thus one contribution of this study is
the development, validation, and testing of a reliable
measurement scale for delivery practice.
2.2. Information sharing
This study considers three aspects of information
sharing: information sharing support technology,
information content, and information quality. Informa-
tion sharing support technology includes the hardware
and software needed to support information sharing.
Information content refers to the information shared
between manufacturers and customers. Information
quality measures the quality of information shared
between manufacturers and customers. In sum, the three
aspects of information sharing measure the technologies
used to support information sharing, the scope of
information shared, and the quality of information
shared, respectively.
2.2.1. Information quality
Information quality measures the degree to which the
information exchanged between organizations meets
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
the needs of the organizations (Petersen, 1999). A
number of researchers have identified several important
characteristics of information quality (Neumann and
Segev, 1979; Mendelson and Pillai, 1998). Neumann
and Segev (1979) studied four information character-
istics: content, accuracy, recency, and frequency.
McCormack (1998) measured information by accuracy,
frequency, credibility, and availability of forecast.
Petersen (1999) measured information quality by
currency, accuracy, and completeness. Vijayasarathy
and Robey (1997) measured information intensity and
quality. Information quality is an important determinant
of the usefulness of an information system. Sum et al.
(1995) found that data accuracy is critical in affecting
operating efficiency and customer service. McGowan
(1998) argued that the information system is perceived
useful when the information is high quality, readily
accessible, accurate and relevant. In this study, there are
nine aspects of information quality: accuracy; avail-
ability; timeliness; internal connectivity; external
connectivity; completeness; relevance; accessibility;
and frequently updated information.
2.2.2. Information content
Many managers mistakenly concentrate their infor-
mation sharing on only the hardware and software,
ignoring the decision-making in the information sharing
process (Davenport, 1994). Schroeder and Flynn (2001)
suggested that what makes the performance difference
is how information is used. For example, high
performing firms had a higher percentage of informa-
tion exchanged via EDI with customers and suppliers.
Their results demonstrated that information technology
investment alone is not enough. Only when manage-
ment teams both emphasize technology investment and
choose the appropriate information to share, can a firm
achieve effective firm performance.
Information content can be classified as supplier
information, manufacturer information, customer infor-
mation, distribution information, and retailer informa-
tion (Handfield and Nichols, 1999; Chopra and Meindl,
2001). This study measures two information flows: the
information that manufacturers share with their
customers (manufacturer information), and the infor-
mation that customers share with their manufacturers
(customer information). Since the two information
flows are completely different, two latent variables will
be used to measure the two information flows. As a
result, information sharing in this study has four latent
variables: information sharing support technology,
customer information, manufacturer information, and
information quality.
1351
2.2.3. Information sharing support technology
Since this research focuses on manufacturing envir-
onments, information sharing support technology
focuses on advanced manufacturing technology and
emerging supply chain management IT applications.
Besides advanced manufacturing technology (Boyer
et al., 1997; Boyer and Pagell, 2000), many supply chain
management (SCM) IT applications have emerged and
become widely adopted in supply chain management in
recent years. The SCM ITapplications can be categorized
into three categories based on the length of the planning
periods (Supply Chain Council, 2002). The first category
is supply chain execution, which focuses on short term
daily activities such as warehouse management, trans-
portation management, and collaborative manufacturing.
The second category is supply chain planning, which
focuses on medium to long term activities. The third
category is supply chain execution management, which
bridges the first two categories as a supporting tool.
2.3. Supply chain dynamism
The business environmental dynamism is defined as
the unpredictable changes in products, technologies,
and demand for products in the market (Miller and
Friesen, 1983; Dess and Davis, 1984). Fine (1998)
measured three environmental clock speeds: product
clock speed, process clock speed, and organization
clock speed. All three clock speeds measure the pace of
the changes in business environment and are shown to
have a significant impact on operations. Fisher (1997)
suggested that supply chains facing different environ-
mental dynamism (e.g. volatile demand versus stable
demand) should use different supply chain practices. In
this study, supply chain dynamism measures the pace of
changes in both products and processes.
2.4. Delivery performance
Delivery performance is a key performance mea-
surement criterion in supply chain management.
McCormack (1998) measured delivery performance
versus committed date and delivery performance versus
quoted order lead-time. Ramdas and Spekman (2000)
measured order fulfillment. The Performance Measure-
ment Group benchmarks supply chain performance
along three dimensions, which are delivery perfor-
mance to request, order fulfillment lead-time, and order
fill rate. The Supply Chain Council uses on-time-
delivery-to-schedule as one of its supply chain
performance measures. Liker and Yu (2000) used the
percentage of late deliveries as a performance measure.
1352 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
In this study, the delivery performance includes on-time
delivery, perfect order fulfillment rate, and delivery
reliability/dependability.
3. Conceptual model and hypotheses
As can be seen from the literature review and the
taxonomy given in Table 1, there have been no scholarly
research attempts that link supply chain practice and
information sharing. The research herein will test the
linkages among supply chain dynamism, information
sharing, supply chain practice, and delivery perfor-
mance. We use a structural equation model (as shown in
Fig. 1) to test the influence of supply chain dynamism
on information sharing and supply chain practice
followed by a regression model to test the impact of
information sharing and supply chain practice on
delivery performance.
3.1. Supply chain practice and information sharing
Effective information sharing between supply chain
partners enhances most supply chain initiatives,
including vendor managed inventory, continuous
replenishment program, collaborative forecasting and
replenishment, and efficient customer response (Chen
and Chen, 1997; Lummus and Vokurka, 1999; Chen,
2002; Lee and Whang, 2000). Shaw (2000) found that
Fig. 1. Supply chain practice, information sharing, and supply chain dynamism (conceptual model).
emerging manufacturing technologies have an influence
on supply chain activities and supply chain structures. It
is also found that those web-based emerging manu-
facturing technologies make information transmission
among the supply chain partners much easier. Spring
and Sweeting (2002) synthesized a number of existing
and emerging themes in supply chain management,
information and customer relationships. They showed
that the use of enterprise resource planning software
profoundly changes the supply chain partner relation-
ships. Two anecdotal examples of information sharing
and supply chain practice are shown below.
3.1.1. Dell
Dell is a good example of using information sharing to
improve its supply chain practices. Dell receives
customer order information directly from its website.
At the same time component availability information is
shared with its customers. As an example, the component
feature price is lower for components with high inventory
levels. The Dell web site also allows customers to
customize their orders. The interaction between Dell and
its customers makes the pull production system more
effective and enables the supply chain planning. Dell also
shares information with its suppliers. Once it receives the
order information, it transmits the information directly to
appropriate suppliers. Suppliers also have backlog
and inventory information. Sharing information with
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
suppliers (especially long lead time suppliers) improve
the supply chain planning capability. Specifically, Sonys
logistics information system is linked directly to Dells
information system. In some instances, Sony ships its
monitors directly to the Dells customers. Finally, Dell
outsources its warranty and repair service systems. When
Dell receives service request, it forwards the request
directly to its service and parts providers. This informa-
tion sharing feature improves customer service and
makes the supply chain more responsive. Overall, Dells
information system interacts with its customers and
suppliers to improve its supply chain planning, JIT
production, and delivery practices.
3.1.2. Cisco
Cisco also uses information sharing to enhance
supply chain practices. Cisco outsources more than 50%
of its production capacity. This virtual manufacturing
model is driven by information sharing. Ciscos
manufacturing model allows it to focus on its core
competencies and innovation. Information sharing
drives the Ciscos supply chain practices in the
following ways:
1. A significant number of Ciscos orders originate from
online customer interfaces.
2. Cisco shares its order information electronically with
its component suppliers. Information sharing allows
Cisco to coordinate its supply chain in real time and
respond to demand changes. Cisco also shares
production schedule, inventory, quality, performance
and capacity information with its suppliers.
3. Ciscos logistics system is also driven by information
sharing with its suppliers. Many products are shipped
from its suppliers directly to its customers. Through
the virtual manufacturing model, suppliers are also
involved in Ciscos product design process.
4. Information sharing with suppliers significantly
improves Ciscos ability to rapidly respond to the
demand changes in the supply chain.
Overall, Cisco shares information with its customers
to enhance supply chain management. Cisco also has
significant two-way information sharing with its
suppliers, which enhances supply chain planning, JIT
production, and delivery practices.
Based on the literature and anecdotal evidence,
information sharing is critical for managing the e-
supply chain and effective supply chain practices. To
date, the importance of information sharing in supply
chain management has not been comprehensively
investigated. The previous studies focus on the
1353
influence of one aspect of information sharing on one
particular group of supply chain practice (Schroeder
and Flynn, 2001; Chen, 2002). This study fills the
research gap by considering various groups of supply
chain practice and various aspects of information
sharing simultaneously. Please see the literature
taxonomy in Table 1.
Based on the previous research studies (Lee and
Whang, 2000; Schroeder and Flynn, 2001; Chen, 2002)
and anecdotal evidence (Brunn and Mefford, 2004;
Supply Chain Council, 2002), the following hypothesis
is developed:
Hypothesis 1. Effective information sharing enhances
effective supply chain practice.
3.2. Influence of supply chain dynamism on supply
chain practice and information sharing
Information processing theory supports the influ-
ence of supply chain dynamism on information sharing
and supply chain practice (Galbraith, 1973; Tushman
and Nadler, 1978; Daft and Lengel, 1986; Forster,
2000). As supply chain dynamism increases, informa-
tion processing capacity needs to increase in order to
achieve superior firm performance. In the information
processing model described in Galbraith (1973),
information systems are suggested as an effective
approach to increase information processing capabil-
ity. In supply chains, sharing information among
supply chain members is one way to increase
information processing capacity. Galbraith (1973) also
suggested that appropriate structures such as lateral
relations and self-contained tasks can increase infor-
mation processing capability. Effective supply chain
practices are the structures that can increase
information processing capacity. For instance, effec-
tive supply chain planning and delivery practices can
improve lateral relationships in supply chains. An
effective production system usually consists of self-
contained tasks. Recently, Forster (2000) extended the
information processing theory into the supply chain
environment.
Since it has been suggested that supply chain
dynamism has a positive influence on supply chain
practice and information sharing (Galbraith, 1973;
Forster, 2000), the research hypotheses are proposed as
follows:
Hypothesis 2. Supply chain dynamism has significant
positive influence on information sharing.
Hypothesis 3. Supply chain dynamism has significant
positive influence on supply chain practice.
1354 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
3.3. Supply chain practice, information sharing and
delivery performance
Since delivery performance is one of the key
supply chain measures, this study uses a regression
model to test the impact of supply chain practice and
information sharing on delivery performance. The
literature review for the three groups of supply
chain practices suggests that effective supply chain
practices have a positive influence on delivery
performance. Supply chain planning can provide an
accurate customer demand forecast and thus meet
the varying customer demand in a timely manner
through intra-firm and inter-firm coordination (Supply
Chain Council, 2002; Mentzer, 2001). JIT production
uses practices such as pull system and agile
manufacturing strategy to meet the customer demand
in a timely fashion (Schroeder and Flynn, 2001).
Effective delivery practices directly impact the
supply chain delivery performance (Gurin, 2000;
Supply Chain Council, 2002). Thus, given the litera-
ture and anecdotal evidence, we hypothesize the
following:
H4a. Effective supply chain planning practice has
positive impact on delivery performance.
H4b. Effective JIT production practice has positive
impact on delivery performance.
H4c. Effective delivery practice has positive impact on
delivery performance.
In addition, studies also have shown that informa-
tion sharing has positive influence on delivery
performance. Bourland et al. (1996) demonstrated that
sharing timely demand information may result in
improvement in delivery performance. Gurin (2000)
revealed how Ford and UPS leverage information
sharing to improve Fords delivery performance.
Ahmad and Schroeder (2001) showed the impact of
EDI system on delivery performance. Because infor-
mation sharing can facilitate the information exchange
between customers and manufacturers, it is expected to
have a positive influence on delivery performance.
Higher information quality (Seddon, 1997; McGowan,
1998) and higher level of investment in information
sharing support technology (Boyer et al., 1997; Supply
Chain Council, 2002) are also expected to improve
delivery performance. Thus, the following hypotheses
are developed:
H5a. Increases in the information quality improves
delivery performance.
H5b. Increases in the level of information sharing
support technology investment improves delivery per-
formance.
H5c. Increases in the level of sharing customer infor-
mation improves delivery performance.
H5d. Increases in the level of sharing manufacturer
information improves delivery performance.
4. Research design and methodology
The purpose of this study is to investigate (1) the
relationship between information sharing and supply
chain practice, (2) the influence of supply chain
dynamism on information sharing and supply chain
practice, and (3) the impact of information sharing and
supply chain practice on delivery performance. The
primary research instrument for the study is a rigorously
validated questionnaire. A summary of the survey
questions is shown with the summary statistics in
Table 2.
4.1. Instrument design and data collection
The study involves two data collection stages: pilot
survey and formal survey. The pilot survey is designed
to test the viability of the study and purify the data
collection instrument. Four academic researchers and
three industry executives critiqued the research instru-
ment for relevance and clarity. The questionnaire for the
main study was refined based on feedback from the pilot
study. The study includes a wide variety of manufactur-
ing industries. A total of 745 surveys were mailed. Of
the 134 returned questionnaires, 125 were usable. The
response rate was approximately 18%. The data
analysis is based on the 125 useable questionnaires.
4.2. The sample list
The sample list consisted of individuals at decision-
making levels, and in strategically oriented positions.
The targeted respondents were senior executives (i.e.
CEO, President, Vice President, Director, and Plant
Manager). The average number of employees in the
respondents firms was about 5000. Eight companies
had more than 10,000 employees. The median annual
sales value, as reported by the respondents, was between
$100 million and $500 million dollars. Five companies
had annual sales of more than $5 billion. Regarding the
manufacturing process, 41% of the companies used
make-to-stock strategy. Twenty-eight percent of the
companies used make-to-order strategy. Six percent of
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365 1355

Table 2
Survey questions and descriptive statistics
Survey question Mean S.D.
Assess your firms information system capability in the following dimensions: [1 = not capable, 7 = highly capable]
IA1. Information accuracy 5.62 1.23
IA2. Information availability 5.36 1.32
IA3. Real-time information 4.88 1.55
IA4. Internal connectivity 5.33 1.49
IA5. External connectivity 4.75 1.60
IA6. Updating information frequently 5.27 1.22
IA7. Information completeness 5.24 1.23
IA8. Information relevance 5.48 1.09
IA9. Information accessibility 5.02 1.40
How often does your major customer electronically provide your firm with its information in the following dimensions [1 = never, 2 = annually,
3 = semi-annually, 4 = quarterly, 5 = monthly, 6 = weekly, 7 = daily]
IB1. Changes in purchase order information 5.23 2.48
IB2. Planned order information 4.39 2.35
IB3. Inventory level information 3.36 2.55
IB4. Product design specifications 2.66 2.16
IB5. Performance evaluation information 3.12 2.01
IB6. Future demand forecasting information 3.78 2.12
IB7. Production planning information 3.42 2.39
How often does your firm electronically provide your major customer with your firms information in the following dimensions [1 = never,
2 = annually, 3 = semi-annually, 4 = quarterly, 5 = monthly, 6 = weekly, 7 = daily]
IC1. Production capacity information 2.43 2.12
IC2. Order status information 5.10 2.53
IC3. Delivery schedule information 5.03 2.64
IC4. Changes in delivery schedule 4.95 2.68
IC5. Lead time information for products 3.28 2.47
What percentage of the information in the following dimensions does your major customer provide your firm in an electronical format [1 = 010%,
2 = 1025%, 3 = 2540%, 4 = 4060%, 5 = 6075%, 6 = 7590%, 7 = 90100%]
ID1. Changes in purchase order information 4.93 2.50
ID2. Planned order information 4.52 2.68
ID3. Inventory level information 3.07 2.59
ID4. Product design specifications 3.16 2.58
ID5. Performance evaluation information 3.82 2.71
ID6. Future demand forecasting information 4.13 2.60
ID7. Production planning information 3.49 2.73
What percentage of the information in the following dimensions does your firm provide to your major customer in an electronical format [1 = 0
10%, 2 = 1025%, 3 = 2540%, 4 = 4060%, 5 = 6075%, 6 = 7590%, 7 = 90100%]
IE1. Production capacity information 2.86 2.53
IE2. Order status information 4.64 2.62
IE3. Delivery schedule information 4.77 2.58
IE4. Changes in delivery schedule 4.45 2.64
IE5. Lead time information for products 3.19 2.56
The following questions are designed to measure the use of information system support technologies including both hardware and software in your
company. Please indicate the amount of investment your company has in the following activities [1 = no investment, 4 = moderate investment,
7 = heavy investment]
II1. Advanced planning and scheduling software 4.28 2.04
II2. Bar coding/automatic identification system 4.26 1.98
II3. Electronic data interchange (EDI) capability 4.88 1.94
II4. Enterprise resource planning systems (ERP) system 4.61 2.35
II5. E-procurement system 3.30 2.05
II6. Forecast/demand-management software 3.66 2.17
II7. Manufacturing Execution Systems (MES) 2.16 1.67
II8. Transportation/warehouse management software (WMS) 3.21 2.20
To what extent have the following planning practices been implemented in your company [1 = not implemented, 7 = extensively implemented]
IIIA1. The use of historical data in the development of forecasts 5.00 1.86
1356 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
Table 2 (Continued )
Survey question Mean S.D.
IIIA2. What-if analysis has been implemented for supply/demand balancing 3.41 1.98
IIIA3. A change in the demand information instantaneously reconfigures the production and supply plans 3.21 2.18
IIIA4. Online visibility of supply-chain demand requirements 3.35 2.05
IIIA5. The designation of a supply chain planning team 3.65 2.15
IIIA6. Both marketing and manufacturing functions are involved in supply chain planning process 3.70 2.08
To what extent have the following production practices been implemented in your company [1 = not implemented, 7 = extensively implemented]
IIIB1. Pull system 3.97 2.11
IIIB2. Cellular manufacturing 3.42 2.25
IIIB3. Cycle time reduction 4.40 1.96
IIIB4. Agile manufacturing strategy 3.10 2.04
IIIB5. Bottleneck/constraint removal 4.02 1.83
To what extent have the following delivery practices been practiced in your company [1 = not practiced, 7 = extensively practiced]
IIIC1. We deliver products to our major customer on a just-in-time basis 4.82 2.07
IIIC2. We have a single point of contact for all order inquiries 5.12 1.82
IIIC3. We have real time visibilities of order tracking 4.41 2.17
IIIC4. We consolidate orders by customers, sources, carriers, etc. 4.59 2.03
IIIC5. We use automatic identification during the delivery process to track order status 3.26 2.19
Please indicate whether you agree or disagree with the following statements about your business environment [1 = strongly disagree, 7 = strongly
agree]
IV1. New products account for a high fraction of total revenue 4.04 1.74
IV2. Products and services are innovated frequently 4.64 1.53
IV3. The innovation rate of operating processes is high 3.64 1.55
The following questions relate to the performance of your firm. Compared to your competitors, please indicate your position on the following
dimensions [1 = significantly lower, 4 = equal, 7 = significantly higher]
V1. On-time delivery 5.12 1.41
V2. Perfect order fulfillment rate 4.96 1.36
V3. Delivery reliability/dependability 5.30 1.23

the companies used assemble-to-order strategy. Fifteen
percent are engineer-to-order companies. The remain-
ing 10% were hybrid systems. The study resulted in a
missing value rate of 2%. The missing values were
replaced with the mean of each item. To test the non-
response bias, the responses of those who returned early
were compared with those who returned late to
determine if there are any statistical differences (Lessler
and Kalsbeek, 1992). There were no statistical
differences between the early and late responses.
4.3. Measurement scales
Descriptive statistics for each survey statement are
presented in Table 2. Each statement required responses
based on a 7-point Likert scale. There are 11 latent
variables: information sharing support technology,
manufacturer information, customer information, infor-
mation quality, supply chain planning, JIT production,
delivery practice, supply chain dynamism, delivery
performance, supply chain practice, and information
sharing.
For customer information, questions IB1 to IB7 given
in Table 2 measure how often customer information is
provided to manufacturers electronically (i.e. the
frequency of information sharing). Questions ID1 to
ID7 measure the percentage of electronically provided
customer information (i.e. the scope of information
sharing). In this study, the product of the information
sharing frequency and information sharing scope was
used to measure the level of electronic customer
information sharing. Only when both information
sharing frequency and information sharing scope have
high scores will the level of customer information sharing
be high. The indicators for customer information are
generated as follows: MB1 = (IB1  1)(ID1  1)/7, . . .,
MB7 = (IB7  1)(ID7  1)/7. Variables MB1 to MB7
measure the level of customer information shared in
electronic format.
Similarly, questions IC1 to IC5 measure how often
manufacturer information is provided to customers
electronically. Questions IE1 to IE5 measure the
percentage of manufacturer information that is provided
electronically. The indicators for manufacturer informa-
tion are generated as follows: MC1 = (IC1 
1)(IE1  1)/7, . . ., MC5 = (IC5  1)(IE5  1)/7. Vari-
ables MC1 to MC5 measure the level of manufacturer
information shared electronically.
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365 1357

Table 3
Results of measurement validation
Scale name Variable CITC Factor Scale statistics
name loading
Information quality IA1 0.63 0.72 Cronbachs alpha: 0.89, largest eigenvalue
IA2 0.75 0.82 (variance explained): 4.99 (55%), second
IA3 0.69 0.76 largest eigenvalue (variance explained):
IA4 0.57 0.64 0.99 (11%)
IA5 0.48 0.56
IA6 0.74 0.80
IA7 0.76 0.84
IA8 0.60 0.70
IA9 0.70 0.79
Customer information MB1 0.54 0.66 Cronbachs alpha: 0.86, largest eigenvalue
MB2 0.77 0.86 (variance explained): 3.89 (55.6%), second
MB3 0.54 0.67 largest eigenvalue (variance explained):
MB4 0.46 0.58 0.88 (12.6%)
MB5 0.65 0.75
MB6 0.73 0.83
MB7 0.74 0.84
Manufacturer MC1 0.52 0.68 Cronbachs alpha: 0.83, largest eigenvalue
information MC2 0.62 0.76 (variance explained): 2.99 (60.0%), second
MC3 0.76 0.86 largest eigenvalue (variance explained):
MC4 0.75 0.85 0.94 (18.8%)
MC5 0.53 0.70
Information sharing II1 0.64 0.75 Cronbachs alpha: 0.86, largest eigenvalue
support technology II2 0.59 0.70 (variance explained): 4.06 (50.8%), second
II3 0.63 0.73 largest eigenvalue (variance explained):
II4 0.50 0.61 0.89 (11.1%)
II5 0.69 0.78
II6 0.70 0.80
II7 0.47 0.58
II8 0.62 0.73
Plan IIIA1 0.43 0.58 Cronbachs alpha: 0.81, largest eigenvalue
IIIA2 0.63 0.77 (variance explained): 3.10 (51.6%), second
IIIA3 0.59 0.74 largest eigenvalue (variance explained):
IIIA4 0.54 0.69 0.93 (15.5%)
IIIA5 0.63 0.78
IIIA6 0.59 0.74
JIT production IIIB1 0.41 0.57 Cronbachs alpha: 0.82, largest eigenvalue
IIIB2 0.66 0.79 (variance explained): 2.99 (59.8%), second
IIIB3 0.74 0.86 largest eigenvalue (variance explained):
IIIB4 0.59 0.77 0.87 (17.4%)
IIIB5 0.71 0.84
Delivery practice IIIC1 0.39 0.58 Cronbachs alpha: 0.74, largest eigenvalue
IIIC2 0.46 0.67 (variance explained): 2.45 (48.9%), second
IIIC3 0.63 0.81 largest eigenvalue (variance explained):
IIIC4 0.53 0.74 1.04 (20.8%)
IIIC5 0.48 0.68
Supply chain dynamism IV1 0.60 0.84 Cronbachs alpha: 0.73, largest eigenvalue
IV2 0.60 0.84 (variance explained): 1.96 (65.2%), second
IV3 0.47 0.74 largest eigenvalue (variance explained):
0.63 (21.0%)
Delivery performance V1 0.53 0.76 Cronbachs alpha: 0.79, largest eigenvalue
V2 0.72 0.90 (variance explained): 2.12 (70.7%), second
V3 0.65 0.86 largest eigenvalue (variance explained):
0.59 (19.7%)
1358 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
Table 3 (Continued )
Scale name Variable CITC
name
Information sharing Information sharing 0.52
support technology
Customer information 0.49
Manufacturer information 0.58
Information quality 0.37
Supply chain practice Supply chain planning 0.51
JIT production 0.55
Delivery practice 0.43
4.3.1. Validity and reliability of measurement
scales
The validation process for the survey instrument had
three steps: content validity; construct validity, and
reliability. The literature review and in-depth interviews
conducted with business executives and researchers
established the basis of content validity for the survey
instrument. The purpose of construct validity is to show
that the items measure what they purport to measure.
Unidimensionality was established with exploratory
factor analysis, where 0.30 is generally considered to be
the lowest significant factor loading to define the
construct (Hair et al., 1998).
Two approaches were used to measure reliability.
First, the internal consistency in this study is measured
by Cronbachs alpha. The lower limit of 0.6 is
considered acceptable for newly developed scales and
0.7 for established scales (Nunnally, 1994). Cronbachs
coefficient alphas were calculated for the items of each
survey construct. Second, the Corrected Item-Total
Correlation (CITC) reliability test is used (Kerlinger,
1986). In this test all items for the same construct should
be closely related to the underlying latent variable. 0.30
is considered as the lowest acceptable value.
4.3.2. The results of the measurement scales
The results of the measurement scales are shown in
Table 3.
Table 3 shows that all factor loadings meet the
criterion of larger than 0.3 and all constructs satisfy the
unidimensionality requirement. For all construct scales
except Delivery Practice, only one eigenvalue is
larger than 1.00. The variance explained by the largest
eigenvalue is larger than 40%. For the construct
Delivery Practice, the second largest eigenvalue is p-Value H0: close fit (RMSEA  0.05)
slightly larger than 1.00. The largest eigenvalue
explains more than 40% of the variance. The scree
test also suggests that one factor is the most appropriate
Factor Scale statistics
loading
0.76 Cronbachs alpha: 0.70, largest eigenvalue
(variance explained): 2.13 (53.2%), second
0.73 largest eigenvalue (variance explained):
0.81 0.78 (19.4%)
0.60
0.80 Cronbachs alpha: 0.68, largest eigenvalue
0.82 (variance explained): 1.84 (61.3%), second
0.72 largest eigenvalue (variance explained):
0.67 (22.3%)
for this set of items. Thus, Delivery Practice is
determined to be unidimensional.
All scales have Cronbachs alpha values of 0.70 or
higher except Supply Chain Practice. Supply Chain
Practice construct is a newly developed construct for
this study. Its Cronbachs alpha is well above 0.6, which
is acceptable for a newly developed scale (Hair et al.,
1998). In addition, the CITC for all items are larger than
0.30. Since all Cronbachs alpha and CITC measures are
supported, all measurement scales are deemed reliable
(Hair et al., 1998).
5. Structural equation model testing and results
Structural equation modeling is used to test the
influence of supply chain dynamism on supply chain
practice and information sharing. The RAMONA
program is used for this study. The root mean square
error of approximation (RMSEA) measures the sample
discrepancy function value per degree of freedom. An
absolute RMSEA value of less than 0.05 suggests a good
fit, and a RMSEAvalue between 0.05 and 0.08 indicates a
reasonable fit (Browne and Cudeck, 1993). The normed
chi-square, which divides chi-square statistics by the
degree of freedom, is also used as a fit statistic (Joreskog,
1969). A normed chi-square below 1 indicates that the
Table 4
Fit measures of overall model in Fig. 2
Sample discrepancy function value 0.382
Population discrepancy function valuebiased 0.128
adjusted point estimate
Root mean square error of approximation 0.063
(RMSEA)point estimate
RMSEA90% confidence interval (0.017, 0.099)
0.26
Chi-square test statistic 47.879
Degrees of freedom 32
Normed chi-square (chi-square/degree of freedom) 1.50
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365 1359

Table 5
Estimations of measurement model parameters in Fig. 2
Scale name Effect indicator Path coefficient
estimate (t value)
Supply chain practice Plan 0.753 (14.61)
JIT production 0.610 (9.18)
Delivery practice 0.541 (7.40)
Information sharing Information sharing support technology 0.734 (13.25)
Customer information 0.544 (7.37)
Manufacturer information 0.614 (9.13)
Information quality 0.455 (5.60)
Supply chain dynamism New products account for a high fraction of total revenue (IV1) 0.729 (10.23)
Products and services are innovated frequently (IV2) 0.765 (10.84)
The innovation rate of operating processes is high (IV3) 0.576 (7.46)

model is over fitted (Joreskog, 1969), while a value larger
than 3.0 (Carmines and McIver, 1981) to 5.0 (Wheaton
et al., 1977) indicates that a model does not adequately fit
the data. Both fit statistics adjust the sample discrepancy
function by the degree of freedom. The results of the
structural model fit statistics are presented in Table 4. The
RMSEA of the model is 0.063, which is smaller than
the desirable cut-off value of 0.08. The normed
chi-square is 1.50, which is within the desirable range.
The p-value of the close fit test is 0.26, which implies a
good model fit. From these fit statistics, it is concluded
that the overall model has a good fit.
In addition to a good fit of the structural model, a
good structural equation model needs to have a good
measurement model (i.e. the path coefficients of all
indicators to the related latent variables are significant at

Fig. 2. Supply chain practice, information sharing, and supply chain dynamism. ** indicates significance at p < 0.05 and * indicate significance at
p > 0.05. # please see Table 2 for the survey questions related to the variables IV1, IV2, and IV3. Please see Table 5 for the path estimates li (i = 1,
. . ., 10).
1360 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
0.05 level). As shown in Table 5, all path coefficients
are significant at 0.05 level and the t-values are larger
than 2.0.
5.1. Findings related to Hypothesis 1
We hypothesized that effective information sharing
enhances effective supply chain practice (Hypothesis
1). The results of the study suggest that Hypothesis 1 is
strongly supported (i.e. effective information sharing
enhances effective supply chain practice) as shown by
the standardized coefficient of 0.937 for b1 in Fig. 2, and
a significant t-statistic of 23.77 in Table 6. This result
provides empirical evidence for the enabling effect of
information sharing on supply chain practice, and
corroborates the findings in previous literature and
industry anecdotes (Supply Chain Council, 2002). This
significant empirical finding suggests that effective
information sharing enhances effective supply chain
practices, such as supply chain planning, JIT production
and delivery practices. As a result, supply chain
transparency may be enhanced and forecast errors
may be reduced.
5.2. Findings related to Hypothesis 2
We hypothesized that supply chain dynamism has
significant positive influence on information sharing
(Hypothesis 2). The results of the study show that
Hypothesis 2 is strongly supported (i.e. supply chain
dynamism has significant positive influence on infor-
mation sharing) as shown by the standardized coeffi-
cient of 0.251 for g1 in Fig. 2, and a significant t-statistic
of 2.14 in Table 6.
Hypothesis 2 is supported at the 5% significance
level, i.e. supply chain dynamism has significant
positive influence on information sharing ( p < 0.05).
The result of Hypothesis 2 empirically supports the
information processing theory proposed by Galbraith
(1973). Furthermore, the acceptance of Hypothesis 2
extends the information processing theory to the supply
Table 6
Summary of statistical tests for the hypotheses in Fig. 2
Paths in the structural model Point
estimate
Information sharing ! supply 0.937
chain practice (H1)
Supply chain dynamism ! information 0.251
sharing (H2)
Supply chain dynamism ! supply chain 0.186
practice (H3)
chain environment. The basic proposition of the
information processing theory is that the degree to
which information-processing requirements and infor-
mation-processing capabilities are appropriately
matched determines the quality of outcomes for the
firm (Galbraith, 1973). The original theory was
proposed in the context of a firm instead of a supply
chain. Therefore, this research adds the generality of the
information processing theory in the context of supply
chains (i.e. the information-processing requirement is
determined by the supply chain dynamism). Effective
information sharing provides the information proces-
sing capabilities needed. This study shows that higher
supply chain dynamism leads to a higher level of
information sharing in supply chains. The match
between the degree of supply chain dynamism and
the degree of information sharing is critical, which is
exactly what the information processing theory pre-
dicts.
5.3. Findings related to Hypothesis 3
We hypothesized that supply chain dynamism has
significant positive influence on supply chain practice
(Hypothesis 3). The results of the study show that
supply chain dynamism does have positive influence on
supply chain practice, but not as much as on information
sharing as shown by the standardized coefficient of
0.186 for g2 in Fig. 2, and a t-statistic of 1.90 in Table 6.
Hypothesis 3 is supported at the 10% significance
level, but not at the 5% significance level. It indicates
that supply chain dynamism does have positive
influence on supply chain practice, but not as much
as on information sharing. The coefficient of the path
from supply chain dynamism to information sharing is
larger than the coefficient of the path from supply chain
dynamism to supply chain practice. Meanwhile,
effective information sharing mediates the impact of
supply chain dynamism on supply chain practice. It
suggests that firms need to have some mechanisms to
collect supply chain dynamics information and use the
information to guide effective supply chain practice.
One mechanism is effective information sharing.
t-Value 6. Supply chain practice, information sharing
and delivery performance: regression model and
23.77 results
2.14 Regression analysis is used to test the influence of
information sharing and supply chain practice on
1.90
delivery performance. The reason to use regression
method is that it allows us to test the influence of
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365 1361

Table 7
Supply chain practice, information sharing, and delivery performance (regression results)
Variable name Hypothesis Standardized t-Value p value Hypothesis
coefficient supported?
Supply chain planning H4a 0.137 0.87 0.388 No
JIT production H4b 0.032 0.24 0.811 No
Delivery practice H4c 0.215 1.78 0.079* Yes
Information quality H5a 0.245 2.14 0.036** Yes
Information sharing support technology H5b 0.135 0.87 0.386 No
Customer information H5c 0.292 2.26 0.026** No
Manufacturer information H5d 0.143 1.08 0.284 No
**
Indicates significance at p < 0.05 and * indicate significance at 0.05 < p < 0.10. Dependent variable: delivery performance; R2 is 0.175 for this
regression model.

information sharing and supply chain practice on
delivery performance at a more detail level, i.e. each of
the three supply chain practice variables and four
information sharing variables are tested separately.
Considering the possible influence of firm size on
delivery performance, we first ran an ANOVA test on
delivery performance according to firm size. We
measured the firm size by sales revenue. The
respondents were asked to choose one of the eight
categories: (1) <$5 million, (2) $520 million, (3) $20
50 million, (4) $50100 million, (5) $100500 million,
(6) $500 million$1 billion, (7) $15 billion, and (8)
>$5 billion. The F statistics of the ANOVA test about
firm size is 1.366, which is not significant at 0.10 levels.
Therefore, the firm size is not entered into regression as
a control variable.
For the regression model, the delivery performance
variable is entered as the dependent variable. The three
supply chain practice variables (supply chain planning,
JIT production, and delivery practice) and four
information sharing variables (information quality,
customer information, manufacturer information, and
information sharing support technology) are simulta-
neously entered as independent variables. The F-
statistic for the overall regression model is 0.026, which
indicates that information sharing and supply chain
practice have a significant impact on delivery perfor-
mance. The R2 value is 0.175, which is fairly high
compared to other studies such as Boyer et al. (1997)
and Droge et al. (2004).
The coefficient and t-value for each independent
variable are shown in Table 7. The results show that
information quality has significant positive influence on
delivery performance ( p < 0.05). The coefficient is
0.245. The coefficient of delivery practice is 0.215,
which is significant at the 10% level. Surprisingly,
customer information has a significant negative impact
on delivery performance at the 5% significance level. A
possible explanation is that when the customer shares
information with the manufacturer more frequently, the
customers delivery requirement might change more
often. As a result of the more frequent delivery
requirement changes, it is more difficult for the
manufacturer to meet the delivery requirement. There-
fore, increases in sharing customer information lead to
adverse delivery performance. As can be seen in
Table 7, the remaining four independent variables are
not significant at the 10% level. Therefore, H4c and H5a
are supported. H4a, H4b, H5b, H5c, and H5d are not
supported.

Table 8
Correlations of the information sharing and supply chain practice variables
IQ CI MI ISST SCP JIT DP
IQ 1
CI 0.271** 1
MI 0.289** 0.477** 1
ISST 0.288** 0.373** 0.481** 1
SCP 0.365** 0.341** 0.436** 0.663** 1
JIT 0.332** 0.398** 0.359** 0.429** 0.480** 1
DP 0.343** 0.283** 0.382** 0.458** 0.371** 0.362** 1
IQ: information quality; CI: customer information; MI: manufacturer information; ISST: information sharing support technology; SCP: supply chain
planning; JIT: JIT production; DP: delivery practice.
**
Indicates significance at p < 0.05.
1362 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365

Table 9
Hierarchical regression for delivery performance
Step Variables B R2 DR 2 F F change
1 0.037 0.797 0.797
Supply chain planning 0.216
JIT production 0.032
Manufacturer information 0.143
Information sharing support technology 0.162
2 0.078 0.041 1.391 3.662*
Delivery practice 0.238
3 0.123 0.044 1.886* 4.101**
Information quality 0.238
4 0.175 0.053 2.432** 5.128**
Customer information 0.292
* **
p < 0.10; p < 0.05; values shown for F change are for each step; B is the standardized coefficient of the variable.

Considering the potential multicollinearity issue of
the seven independent variables, a correlation analysis
was run. The results presented in Table 8 show that the
independent variables are highly correlated. Thus, a
hierarchical regression analysis to confirm the results in
Table 7 was conducted. First, the four insignificant
variables in Table 7 (supply chain planning, JIT
production, manufacturer information, and information
sharing support technology) are entered. Second,
delivery practice is entered. Third, information quality
is entered. Finally, customer information is entered. The
results of the hierarchical regression are shown in
Table 9. In order to confirm the impact of those
significant independent variables in Table 7, the less
significant independent variables are first entered into
the hierarchical regression. By doing so, the changes in
R2 and F statistics in each step can only be attributed to
the additional variable. The standardized coefficients in
Table 9 are the coefficients from each step. For example,
0.216 is the coefficient for the supply chain planning
variable when the first four variables were entered into
the regression in the first step. After the delivery
practice variable was entered into the regression, the
coefficient for delivery practice was 0.238 (i.e. when
there are five independent variables in the second step).
As expected, the results of the hierarchical regression
shown in Table 9 confirm that (1) the delivery practice
variable has significant positive influence on delivery
performance at the 0.10 level, (2) information quality
variable has significant positive influence on delivery
performance at the 0.05 level, and (3) the customer
information variable has significant negative influence
on delivery performance at the 0.05 level.
Since the customer information variable has a
negative impact on delivery performance and the
delivery practice has a positive impact, we further
explore the relationship among delivery performance,
delivery practice, and customer information. We
categorize customer information and delivery practice
into two categories according to their factor scores as
shown in Table 10. The higher score of customer
information reflects more frequent sharing of customer
information. The higher score of delivery practice
reflects a higher level of effective delivery practice
implemented. The mean delivery performance score for
each combination is calculated. A higher value of
delivery performance is preferred. The results in Table
10 show that as the frequency of sharing customer
information increases, the delivery performance
decreases. However, effective delivery practice miti-
gates the effect of frequent sharing of customer
information. When the level of sharing customer
information is high, effective delivery practice can
improve the delivery performance significantly. When
the level of sharing customer information is low,
effective delivery practice does not improve delivery
performance as much as when the level of sharing
customer information is high. This finding suggests that
when the level of sharing customer information is high,
there is a need to implement a high level of effective
Table 10
Customer information, delivery practice, and delivery performance
Delivery practice/ High Low
customer information
High 0.045 (34)a 0.316 (28)
Low 0.238 (28) 0.106 (35)
a
The value in the cell is the mean of the delivery performance factor
score in each category. The number in the parenthesis is the number of
companies in each category. For example, 0.238 is the mean of
delivery performance when customer information is low and delivery
practice is high.
 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
supply chain practice in order to leverage the effective
information sharing.
6.1. Findings related to Hypotheses 4a, 4b, 4c, 5a,
5b, 5c, and 5d (the influence of information sharing
and supply chain practice on delivery performance)
As shown in Tables 7 and 9, information quality and
delivery practice have significant positive influence on
delivery performance, while customer information has a
significant negative influence. The remaining variables
are not significant. This corroborates several extant
studies such as Schroeder and Flynn (2001). Schroeder
and Flynn (2001) found that the difference in advanced
manufacturing technology investment does not have
impact on firm performance. The information quality
and the type of information shared are important. The
finding that information quality has a significant
positive influence on delivery performance in this study
confirms the results in Schroeder and Flynn (2001).
Among the three groups of supply chain practice, only
delivery practice has a significant positive influence on
delivery performance. Supply chain planning and JIT
production do not have a significant direct impact on
delivery performance.
The counterintuitive result that customer informa-
tion has a significant negative impact on delivery
performance, led to further exploration of the relation-
ship between information sharing and supply chain
practice. The result shown in Table 10 suggests that
effective supply chain practice is critical for leveraging
effective information sharing when the level of
information sharing is high. Together with the results
of supply chain dynamism, this study shows that
effective supply chain practice becomes more important
when supply chain dynamism is high. A higher level of
supply chain dynamism, leading to a higher level of
information sharing, enhances effective supply chain
practice in order to utilize the information shared and
maintain a high level of performance.
7. Managerial implications
This study offers practitioners several managerial
insights about the role of information sharing and
supply chain practices in supply chain management.
First, effective supply chain practices and information
sharing play different roles in managing supply chains.
To improve supply chain performance, executives often
choose to implement either effective information
sharing or effective supply chain practice because
limited resources usually prevent firms from pursuing
1363
both simultaneously. Effective supply chain practice
standardizes the supply chain processes and exploits the
efficiency from the standardization. The standardization
of supply chain processes tends to help companies
better leverage the information shared among supply
chain partners. Information sharing is a means to
capture the supply chain dynamics and thus reduce
uncertainty in external and internal environments.
When coupled with the standardization inherent in
effective supply chain practice, this uncertainty reduc-
tion allows performance improvement. Without stan-
dardization, however, uncertainty reduction is less
valuable, because the processes themselves are too
uncertain to control effectively. Clearly, managers
should seek to achieve supply chain performance
improvement by exploiting opportunities to implement
both effective supply chain practice and effective
information sharing. Dell is a good example of using
information technology to get information from its
customers and share the information with its suppliers.
It uses effective supply chain practices to standardize
the supply chain processes and reduce process
uncertainties.
Second, the importance of effective supply chain
practices increases as the level of information sharing
increases. Fisher (1997) categorizes supply chains into
efficient supply chains and responsive supply chains. In
efficient supply chains, products are standardized and
firms tend to deploy more effective supply chain
practices because effective supply chain practices tend
to standardize processes. In responsive supply chains,
firms tend to emphasize on flexibility and buffering
rather than standardization. However, this study
suggests that effective supply chain practices that
standardize the processes have greater value in
responsive supply chains. Looking at the auto industry,
the Japanese automakers such as Toyota and Honda
have more competitive advantage than the US auto-
makers such as General Motor and Ford these days
when the needs for product variety and information
sharing increase. The findings in this study suggest that
the effective supply chain practices that Toyota and
Honda have are giving them more competitive
advantage than their major US competitors in todays
more dynamic world.
Third, this study suggests that firms do not have to
excel in all dimensions of supply chain processes in
order to achieve superior delivery performance. The
regression analysis shows that only delivery practices
(not the supply chain planning or JIT production) have
significant positive influence on delivery performance.
This suggests that firms need to be clear about the
1364 H. Zhou, W.C. Benton Jr. / Journal of Operations Management 25 (2007) 13481365
performance measures they want to excel and invest on
the supply chain practices related to those critical
performance measures.
8. Conclusions
The results of this study show the following basic tenet
about the role of information sharing and supply chain
practice in supply chain management: both effective
information sharing and effective supply chain practice
are necessary to achieve improvement in supply chain
performance. However, the roles of effective information
sharing and effective supply chain practice are different
under alternative supply chain dynamism.
This research offers the following findings: (1)
effective information sharing significantly enhances
effective supply chain practice; (2) supply chain
dynamism has significant positive influence on infor-
mation sharing; (3) supply chain dynamism has positive
influence on supply chain practice, but not as much as
on information sharing; (4) effective information
sharing and effective supply chain practice have
significant influence on delivery performance; (5) the
higher the level of information sharing, the more
important the effective supply chain practice is to
achieve superior performance.
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