Supply Chain Information Integration and Its Impact on the Operational Performance of Manufacturing Firms in Malaysia

Abstract

Purpose The purpose of this paper is to investigate the impact of Supply Chain Information Integration (SCII) on the Operational Performance of manufacturing firms in Malaysia considering the role of information leakage. Design/methodology/approach To test the model developed, we conducted an online questionnaire survey with Malaysian manufacturing companies drawn from the Federation of Malaysian Manufacturers directory of 2018. Out of the 400 questionnaires sent out to the manufacturing companies, 144 useable responses were received giving a response rate of 36 %. The data were analyzed using SmartPLS, a second-generation statistical tool. Findings The findings of this study showed that information quality, information security, and information technology (IT) had a positive effect on SCII with an explanatory power of 47.2 % while SCII, in turn, had a positive effect on operational performance explaining 17% of the variance. Intentional information leakage (IIL) moderated the relationship between SCII and operational performance, whereas accidental information leakage did not moderate the same relationship. Practical implications This study provides insights into difficulties faced when implementing SCII, particularly by medium and large manufacturing companies in Malaysia. It helps identify appropriate strategies that can guide the management in its effort to improve performance by SCII. Originality/value This research is arguably the first study that simultaneously investigates the effect of information quality, IT, and information security on SCII and the moderating effect of information leakage on the relationships between SCII and operational performance. The results of this study indicate that information security has the largest impact on SCII, followed by IT, and information quality. Furthermore, IIL as a negative aspect of information integration may deprive the strength of the relationship between SCII and operational performance.