Effectiveness of information systems in supply chain performance: a system dynamics study

Organisations are streamlining their supply chains through successful deployment of Information Technology (IT) to succeed in today's global marketplace. Advances in information and communications technologies have made the availability of IT easier, but have they really improved the decision-making processes and performances of supply chains? Effective use of IT tools in a supply chain helps in integrating its trading partners and improving the ability to quickly respond to market changes. Previous works on system dynamics modelling of supply chain, in general, have analysed the effect of key performance variables on demand amplification and inventory level. Evidence of system dynamics simulation works focusing directly on IT implementation and its impact on supply chain are rare, which prompted the need for this study. This paper captures the impacts of using IT in various ways in a supply chain for auto industry. The dynamic interactions among different variables of the case supply chain have been modelled and analysed. Simulation result indicates that the influence of Information Systems (ISs) (through Data Accuracy (DA), Delivery Speed (DS), Usage of IT (UIT) tools, Process Integration (PI)) on the performance of supply chain is relatively more significant as compared to influences of other enabler variables.