Organizational adoption of supply chain management system: A multi-theoretic investigation

Supply chain management (SCM) systems have many benefits to firms, including minimizing the bullwhip effect, maximizing the efficiency of activities, reducing inventories, lowering cycle times, and achieving an acceptable level of quality. The key to realizing the benefits is the sharing of information among members of supply chain network via SCM systems. We survey more than 200 firms and the results show that firms tend to adopt SCM systems if they fit their major business processes and that there is a network externality to adopting such systems. Moreover, the aforementioned two forces interact with each other as the benefits of SCM system will be amplified in the supply chain network as the number of system users increases. Likewise, the problems of SCM system caused by the misfit between SCM system and major business processes will be exacerbated as the number of users in the network increases.

► Firms tend to adopt SCM when BP alignment and network externality (NE) exist. ► Interaction between BP and NE is amplified as the number of users increase. ► Misfit between SCM system and BP is exacerbated as the number of users increases.