An organizational capability viewpoint: The "Internet of Things" on supply chain integration and performance.

Abstract

Purpose: The Internet of things (IoT) is a next generation of Internet connected embedded ICT systems in a digital environment to seamlessly integrate supply chain and logistics processes. Integrating emerging IoT into the current ICT systems can be unique because of its intelligence, autonomous and pervasive applications. This study is drawn upon the organizational capability theory for developing an empirical model considering the effect of IoT capabilities on multiple dimensions of supply chain process integration, and in turn improves supply chain performance as well as organizational performance.

 Design/ Methodology/Approach: Cross-sectional survey data from 227 Australian retail firms was analyzed using structural equation modeling (SEM).

Findings: The results indicate that IoT capability has a positive and significant effect on internal, customer, and supplier-related process integration that in turn positively affects supply chain performance and organizational performance.

Contribution to policy and practice: Theoretically, the study contributes to a body of knowledge that integrates information systems research into supply chain integration by establishing an empirical evidence of how IoT-enabled process integration can enhance the performance at both supply chain and organizational level. Practically, the results inform the managers of the likely investment on IoT that can lead to chain’s performance outcome.

Originality/Value: The research on the IoT adoption in supply chain domain is scarce and acceptance of the IoT into the retail services in specific has been overly rhetoric. This study is among the few studies to conceptualize the integration of IoT in supply chain domain.