The impact of IT on supply chain agility and firm performance: An empirical investigation

•Investigate impact of IT on supply chain agility and firm performance.•Examine data from 193 U.S. manufacturing firms.•IT improves quality of information on market changes shared with supply chain.•IT improves ability of supply chain to coordinate a response to market changes.•Supply chain agility has positive impacts on firm performance.

This study investigates the impact of information technology (IT) on supply chain agility measured by the ability to sense and respond to market changes, and the impact supply chain agility has on firm performance. Data were collected from supply chain executives at 193 U.S. manufacturing firms. The results suggest that IT improves the supply chain's ability to sense market changes by improving the adequacy, accuracy, accessibility, and timeliness of the information flows among members of the supply chain. IT also increases the supply chain's ability to respond to market changes by reducing the cost, and improving the quality and timeliness of developing and executing coordinated plans to respond to market changes throughout the supply chain. Importantly, the results indicate that enhanced supply chain agility has positive impacts on the firm's sales, market share, profitability, speed to market, and customer satisfaction.