de Vass, Tharaka (2018) The “Internet of Things” enabled supply chain integration and performance: a mixed method investigation of the Australian retail industry. PhD thesis, Victoria University.

Abstract

The Internet of Things (IoT) is a next generation of Internet connected devices and sensors embedded within information and communication technology (ICT) systems in a digitally-enabled environment. It supports supply chain process integration by capturing and transferring key information in real-time. Integrating emerging IoT into the current legacy of ICT systems is unique because of its intelligent, autonomous and pervasive applications. While the impact of ICT-enabled supply chain integration (SCI) in improving firm performance is extensively researched, empirical studies on emerging IoT technologies in integrating supply chain processes is limited. It remains overly rhetoric in literature for its inherent benefits. Thus, it raises a question of whether IoT technologies have the capability to integrate supply chain processes and influence the supply chain performance through the power of data capture and exchange. Therefore, drawing on organisational capability theory, this empirical study develops a holistic model to investigate the effect of IoT capabilities on multiple dimensions of supply chain process integration (e.g. suppliers, customers and internal functions), and, its effect on supply chain performance and, ultimately, firm performance. A mixed methods approach was employed. Cross-sectional survey data from 227 Australian retail firms was analysed using structural equation modeling (SEM), and the results were validated with 13 in-depth interviews with managers from the retail industry. The SEM results reveal that IoT capability is perceived to have a positive influence on internal and external (e.g. customer and supplier) process integration that, in turn, positively affects supply chain and firm performance. Further, IoT-enabled external integration was perceived to influence supply chain performance significantly more than IoT-enabled internal integration. Qualitative analysis supports the quantitative findings above and reveals that IoT capability improves supply chain visibility, auto-capture, intelligence, and information sharing resulting in greater SCI, to influence supply chain performance dimensions of cost, quality, delivery and flexibility, to effect firm’s economic, environmental and social criteria. In terms of theory, this study contributes to SCI and IoT literature by providing an empirical support for IoT-enabled SCI and demonstrating how it helps to integrate the internal and external (supplier and customer) logistics functions that can enhance both supply chain performance and firm performance. The use of organisational capability theory offers a new perspective on the benefits of emerging IoT capability in achieving SCI in relation to data capture and communication in the supply chain for performance improvement. Practically, the study provides insight for managers to understand the potential of IoT technologies in the form of supplier and customer integration into a firm’s internal logistics functions. The study shows that managers developing IoT-enabled SCI capability can reap the benefits in the supply chain and in firm performance. Higher level of SCI needs the support of newly emerged IoT technologies such as RFID, sensors and smartphone and device applications to capture and transfer data for intelligent and timely decision making. To achieve greater benefits of IoT in an integration context, managers must stretch their focus from isolated organisational management to the entire supply chain perspective.

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