The Impact of Information Technology Use on Plant Structure, Practices, and Performance: An Exploratory Study

Journal of Operations Management, Vol. 28, No. 2, pp. 144-162, 2010

Mays Business School Research Paper No. 2012-34

53 Pages Posted: 20 Feb 2011 Last revised: 3 Jul 2012

See all articles by Gregory R. Heim

Gregory R. Heim

Texas A&M University - Department of Information & Operations Management

David Xiaosong Peng

University of Houston - C.T. Bauer College of Business

Date Written: February 17, 2010

Abstract

Firms have been investing millions of dollars on information technology (IT) in their manufacturing plants. However, the research literature is unclear about the extent and scope of the impact of IT use on plant operations. This study examines the impact of IT use on the structure, practices, and performance of manufacturing plants. Drawing on information systems and operations management literature, the study differentiates between plant IT use (i) at the process level, (ii) due to internal process integration, and (iii) due to customer and supplier collaboration, labeled as process intelligence, integration intelligence, and collaboration intelligence, respectively. The study also accounts for intelligence gathering due to statistical process control (SPC) practices. The proposed impacts of IT use are examined using data from a study sample of manufacturing plants from electronics, machinery and transportation component industries. Overall, the evidence suggests that SPC has a broader and more significant impact on many aspects of plant operations than the individual dimensions of IT use. However, the three dimensions of IT use do exhibit distinct effects on plant structure, practices, and performance. Process intelligence tends to be associated with plant size and productivity, while integration intelligence and collaboration intelligence tend to be associated with work practices related to increased organizational decentralization and a flexible technology focus.

Keywords: manufacturing, process control, information technology, regression

JEL Classification: D20, M11, M, L23, O14

Suggested Citation

Heim, Gregory R. and Peng, David Xiaosong, The Impact of Information Technology Use on Plant Structure, Practices, and Performance: An Exploratory Study (February 17, 2010). Journal of Operations Management, Vol. 28, No. 2, pp. 144-162, 2010; Mays Business School Research Paper No. 2012-34. Available at SSRN: https://ssrn.com/abstract=1763432

Gregory R. Heim

Texas A&M University - Department of Information & Operations Management ( email )

320 Wehner Building
4217 TAMU
College Station, TX 77843-4217
United States
979-845-9218 (Phone)

HOME PAGE: http://mays.tamu.edu/info/

David Xiaosong Peng (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

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