IT ADOPTION MODEL DEVELOPMENT FOR SUPPLY CHAIN MANAGEMENT: CASE OF ETHIOPIAN MANUFACTURING FIRMS

Abstract

In the 21st century companies are required to continuously upgrade and improve their business activities in order to survive and achieve their business goal. One of the competition areas is an effective and efficient information flow along supply chain (SC). The information technology (IT) is one of the biggest enablers of the modern Supply Chain Management (SCM). However, SC systems in Ethiopian Medium and Large-Scale Manufacturing (MLSM) Firms found as fragmented SC, poor information exchanges, outdated systems and paper work. The purpose of this study is to examine IT adoption status and to develop its adoption model to Ethiopian MLSM firms. Cross-sectional survey was conducted on 438 samples from total 2,758 Ethiopian MLSM firms. Both a qualitative and quantitative data were collected using questionnaire survey, interview and document investigation, then descriptive and inferential statistical analysis were conducted by using Statistical Packages for Social Science (SPSS) version 21 and Microsoft office excel. The results indicated that the IT adoption status among Ethiopian MLSM firms was inadequate at all, despite good improvements in adopting some IT tools such as the Internet, Intranet and Barcode Scanner. The result also shows positive and strong correlation between the role of IT adoption and SC performance with correlation coefficient r = 0.824, even though a weakness to accept sophisticated IT tools, such as ERP, EDI, RFID, etc. The study suggests firms to exploit CSFs and reduce associated challenges to adopt IT, government to support these firms by policies, infrastructure, subsidies, incentives and training and universities to focus on producing IT skilled professionals. Finally, study proposes a model of IT adoption for Ethiopian MLSM firms to enhance their competitive advantage and improve firms’ performance