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The Mediating Role of Information Technology (IT) on the relationship between Supply Chain Management and Firms Performance: Evidence from Rwanda

Author(s)

Katlego Tumo Wantlo ,

Download Full PDF Pages: 42-61 | Views: 546 | Downloads: 159 | DOI: 10.5281/zenodo.5066239

Volume 10 - April 2021 (04)

Abstract

This study's major objective is to evaluate the mediating role of IT on the relationship between supply chain management and firm performance in Rwanda. The research design used simple random and stratified sampling methods as a representative sample of SMEs in Rwanda. The sample size of the study was 300 respondents.  In pursuit of data collection for the study, both supplier and buyer relationships were incorporated. However, the participants were logistics managers, procurement or purchasing officers/managers, or supply chain managers who considered the field interviews' appropriate participants. The data was analyzed using appropriate models for appropriateness, convenience, clarity, and simplicity. The models such as structural equation modelling was used be evaluate the direct and indirect effect of IT on supply chain management in Rwanda. However, the elliptical reweighted least squares (ERLS) procedure of the EQS program was used as the statistical tools to analyze the research. The overall fit statistics show that the model suits the results very well in its entirety (x2 = 1076.96 with df = 249, CFI = 0.917, RMSEA = 0.062, NFI =0.913, NNFI = 0.956). However, IT advancement has a substantial positive impact on both IT alignment (t = 0.321, p<0.05) and supply chain management (t =0.612, p<0.05) in the hypothesized relationship. Thus, hypothesis 2 is supported in this findings which implies that information technology infrastructure positively relates to supply chain management as it is evidential that both IT alignment and advancement showed positive and significant relationship with supply chain management. The total effect was assessed considering supply chain management with the mediating effect of IT alignment (t=0.321, p<0.05), and IT advancement (t=0.612, p<0.05) as well as firm performance (t=0.512, p<0.05) indicating that H1 and H3 are supported which implies that supply chain management positively relates to IT infrastructure which positively influence firms’ performance significantly. To attract and retain customers, businesses must be committed to consistently providing high-quality services at a low or managed rate. This can be accomplished by instilling a customer service philosophy in the supply chain management department. In today's world, Information and Communication Technology (ICT) is rapidly evolving. In light of the findings, it was observed that information technology plays crucial role in supply chain management such that it eliminates paper works and smoothen workflow.

Keywords

Supply chain management; Information technology; Firm performance; Marketing performance; Firm size

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