The Impact of Information Sharing and Inventory Management Practices on Firms’ Performance in Supply Chain Practices

Abstract

This study’s aim is to conduct an empirical investigation of the impact of supply chain practices on firm performance. The prime objective of the paper is to study the impact of information-sharing practices and inventory management on firm performance. To realize the specified objective of the study, data were gathered from 170 individuals who are familiar with the supply chain practices of the companies and analyzed using structural equation modeling (SEM). The result shows a significant direct and indirect effect of information sharing and inventory management practices on firm performance. Generally, the results show that higher information-sharing practices and better inventory management practices lead to greater firm performance; and higher information-sharing leads to improved inventory management, which in turn leads to greater firm performance. Theoretically, the result provides evidence of the effects of information sharing and inventory management on the supply chain practices’ performance in a firm. The managerial implications of the results are enhancing information sharing and inventory management practices by adopting, internalizing, and building information technology into all the business operations to enhance information sharing and inventory management practices to enhance firm performance.