The paradox of information systems in supply chain flexibility: the indirect effect on the lean production-business performance relationship through sourcing, operating system and distribution flexibility

Abstract

Purpose – This research analyzes the role that information systems flexibility (IS flexibility) plays in the other components of supply chain flexibility (SCF) and how this role affects business performance (BP) in lean production (LP) environments. Design/methodology/approach – Three hypotheses are tested using covariance-based structural equations modeling (CB-SEM). The previous literature shows that IS flexibility does not mediate the LP-BP relationship. The three hypotheses add the mediating effects of SCF components (sourcing, operating systems and distribution flexibility) between IS flexibility and BP. Data on 260 companies are analyzed with EQS software. SPSS Process software is used to test the indirect impact of IS flexibility on BP through the paths of the other three SCF dimensions. Findings – Research results show that IS flexibility’s role is paradoxical in SCF’s mediating role between LP and BP: although it does not mediate between LP-BP, its role in the indirect LP-BP effect is key as it acts on BP indirectly through the mediation of the other three SCF dimensions (sourcing, operating system and distribution flexibility). Originality/value – This paradoxical effect of IS flexibility as an SCF dimension in the LP-BP relationship has been identified for the first time in this work. This study finds that IS flexibility is a fundamental factor in the SCF “eclipse effect” between LP and BP in LP contexts due to its effect on the other SCF dimensions and, indirectly through these, on BP. This IS flexibility paradox has major implications for theory and business management.