Excerpt
CONTENTS
ABSTRACT
LIST OF TABLES
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Problem Statement
1.3 Research Objectives
1.4 Research Questions
1.5 Significance of the Study
1.6 Brief Methodology
1.7 Structure of the Study
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
2.1 The Internet of Things (IoT)
2.2 Supply Chain Integration (SCI)
2.3 Performance
2.4 The relationship between Internet of Thing and supply chain integration
2.5 The relationship between Internet of Thing and performance
2.6 The relationship between supply chain integration and performance
2.7 Related Theories
2.7.1 Organizational Capability Theory
2.7.2 Systems Theory
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
3.1 Research Design
3.2 Research paradigm
3.3 Population of the study
3.4 Sampling Size and Technique
3.5 Questionnaire Design and Data Collection Instrument
3.6 Data Sources and Collection Procedure
3.7 Data analysis
3.8 Ethical considerations
DATA ANALYSES AND DISCUSSION OF FINDINGS
4.0 Introduction
4.1 Evaluation of Common Method Variance (CMV)
4.2 Descriptive Statistics
4.3 Reliability and Validity of the Constructs
4.3.1 Standardized Factor Loadings and T Values
4.3.2 Correlation Matrix and Average Variance Extracted (AVE)
4.3.3 Model Fitness
4.3.4 Kaiser-Meyer-Olkin (KMO) Barlet’s Test (BT)
4.3.5 Rotated Component Matrix
4.4 Multi-collinearity Test
4.5 Analysis of the Effect of Internet of Thing on Supply chain performance.
4.6 Analysis of the Effect of Internet of Thing on Performance
4.7 Analysis of the Effect of Supply Chain Integration on Performance
4.8 Discussions of Findings
4.9 summary of research hypothesis
CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusions of the study
5.2 Theoretical and managerial implications
5.3 Recommendation of the study
5.4 Limitations and recommendation for future research
REFERENCES
APPENDIX QUESTIONNAIRE
ABSTRACT
The Internet of things (IoT) is a next generation of Internet connected embedded ICT systems in a digital environment to seamlessly integrate supply chain and logistics processes. Integrating emerging IoT into the current ICT systems can be unique because of its intelligence, autonomous and pervasive applications for better organizational performance. This study explored the effect of IoT on supply chain integration and performance in the automotive industry of Germany. The dataset comprises a quantitative survey and a sample size of 50 employees in the automotive industry of Germany. The obtained data from a structured questionnaire, which was built on a 5-point Likert scale, was analyzed by the use of Linear Regression. The analysis of the study was enacted by using STATA (15.0) statistical software to excerpt the results. The proposed model was blueprinted based on relationship marketing theory, resource-based view theory, contingency theory, and related literature. Before estimating the main results, preliminary analysis such as descriptive statistics, correlation analysis, validity and reliability of the instruments, multi-collinearity test and model fitness were done to provide initial justification and appropriateness of the instruments and the methods chosen to test the proposed relationships guiding the study. The outcome of the study revealed that Internet of Thing had a significant and positive effect on supply chain integration in the Mercedes automotive industry, Germany. Again, the findings of this study indicate that Internet of Thing had a significant positive effect on performance in the Mercedes automotive industry, Germany. Consequentially, this study has found out that supply chain integration has significant and positive effect on performance in the Mercedes automotive industry of Germany.
Keywords: Internet of Things, supply chain integration, performance, organizational capability theory and system theory
LIST OF TABLES
Table 4.1: Descriptive Statistics and Composite Reliability
Table 4.2: CFA Standardized Factor Loadings and T Values
Table 4.3: Correlation Matrix and Average Variance Extracted
Table 4.4: Kaiser-Meyer-Olkin and Bartlett's Test
Table 4.5: Rotated Component Matrix
Table 4.6: Multi-collinearity Results
Table 4.7: The effect of Internet of Thing on Supply chain performance
Table 4.8: The effect of Internet of Thing on Performance
Table 4.9: The effect of Supply Chain Integration on Performance
Table 4.10: The summary result of hypothesis testing
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
In recent years, Internet of Things and supply chain integration have witnessed tremendous paradigm shifts (De Vass, et al 2018). The increasing interest in Internet of Things and supply chain integration has been driven by competitive pressure and has led to its eventual elevation to critical part of organizational operations and strategy (Rejeb, et al 2020). The roles of Internet of Things and supply chain integration as organizational functions have become more pronounced in sustaining their competitive position in this increasingly dynamic business environment (Tang, & Veelenturf, 2019). Organizations have to continuously upgrade their Internet of Things and supply chain integration in order to deliver the right product to the right customer at the right time (Rejeb, et al 2020).
Internet of Things (IoT) is defined as a universal platform of Internet-connected smart objects that allow things to connect anytime, anywhere using any network or service (De Vass, et al 2018). It is advancement in technological innovation connecting objects and devices through Internet (De Vass, et al 2018). The network of objects embedded with sensors and software has the potential to collect and communicate data over internet (Rejeb, et al 2020). Internet of Things and supply chain integration platform facilitate things to be identified, located, sensed and controlled via the global platform. It is viewed as progression of information and communication technology (ICT) applications that are helpful to capture and share data in a network of organizations on real-time basis (De Vass, et al 2018). This digitally upgrading of conventional objects via internet connectivity generates added capabilities to its functionality. Internet of Things may differ to previous ICT capabilities due to their ubiquity, intelligence and autonomy (Mohanty and Mishra 2020).
The Internet of Things is the next generation of internet-connected embedded ICT systems to integrate supply chain process in a digital environment. Because of its intelligence and pervasive applications, the integration of emerging of Internet of Things into the current ICT systems can be unique (Cruz, 2021). It is viewed as an extension of legacy ICT systems that facilitate information sharing among individuals, organizations, and industries (Borgia, 2014). Internet of Things (IoT) has become an imported part of company performance in any company around the world, irrespective of its ideology, culture, religion. Additionally, it can be said supply chain integration with IoT has a critical factor to influence the company performance. Thus, the platform facilitates the identification, location, sensing and control of "things" through the global platform (Borgia, 2014). It is viewed as advancing information and communication technology (ICT) applications that are useful in capturing and sharing data in real-time networks of organizations (De Vass, et al 2018).The technical reason for promoting the supply chain insole the need to improve the quality of the life as reflected by IoT, increasing opportunities for enhancing the company performance and the need to absorbed the consuming time on the production and commutation with the customer, employee, Supplier.
1.2 Problem Statement
Supply chain is primarily demand driven, intense digital connectivity and coordination via adoption of new technology can be considered as an intervention in improving performance. The emerging IoT paradigm plays a significant role in organizations to manage supply networks in response to customer demands (De Vass, et al 2018). Moreover, the supply chain literature on IoT application is broadly rhetoric, technology and architecture focused and quite nascent (Mishra et al., 2016). Due to enthusiasm on technological adoption in data transparency and visibility to achieve supply chain process integration, the research on IoT within this context is timely (Tu, 2018). Aside conventional ICT technologies help monitor supply chain functions such as purchasing, transportation, storage, distribution, sales and returns, many other smart devices recently joining the list under the newly coined Internet of Things umbrella of technologies, the potential to address the information capture and exchange in real-time has multiplied (De Vass, et al 2018; Vanpoucke, et al., 2017).
Although the advances in Internet of Things applications is expected to revolutionize retail sectors, its acceptance and potential to integrate supply chain processes is largely under developed both for theoretical and practical implications (Kahlert et al 2017). Again, there have been a number of studies that have investigated the ICT-enabled supply chain processes integration in improving the performance, however, little studies are documented to empirically assess the effect of emerging Internet of Things on supply chain integration (Vanpoucke et al., 2017). Also, Internet of Things has increased as a creative innovation with volumes to progress inventory network data stream, stand that as it might, the influence of Internet of Things on supply chain integration and thus execution is not yet been thoroughly investigated (De Vass, et al 2018). Theoretically, in the global literature sense, a number of studies have been done in more developed economies on the various facets of Internet of Things and supply chain integration such as Europe, America, Asia and the Western world (Mohanty & Mishra 2020). However, the impact of Internet of Things on supply chain integration and performance in the automotive industry is limited and is still unclear.
1.3 Research Objectives
This study seeks to examine the effect of internet of things on supply chain integration and performance. In assuring that the above objective can be achieved, few specific objectives need to be accomplished. These specific objectives are as follows:
(i) To examine the relationships between internet of things and supply chain integration in the Mercedes automotive industry.
(ii) To examine the relationships between internet of things and performance in the Mercedes automotive industry.
(iii) To examine the relationships between supply chain integration and performance in the Mercedes automotive industry.
1.4 Research Questions
For the above objectives to be achieved, the study will attempt to answer the following questions.
(i) Does internet of things has a significant effect on supply chain integration in the Mercedes automotive industry?
(ii) Does internet of things has a significant effect on performance in the Mercedes automotive industry?
(iii) Does supply chain integration has a significant effect on performance in the Mercedes automotive industry?
1.5 Significance of the Study
This study certainly serves as a springboard for other studies into the field of internet of things, supply chain integration and performance especially in the automotive industry that has seen intense competition. The outcome of this research also holds significant benefits for researchers and practitioners who are interested in internet of things with the useful knowledge and in-depth overview of IoT and supply chain integration. Theoretically, this study empirically validates the positive effect of IoT on supply chain integration to improve performance by testing a conceptual framework. This study also provides detailed evidence of how IoT technologies influence supply chain integration and firm performance. Also, this research enlightens practitioners, policy makers and industry associations that IoT technologies enable information capture that can be helpful in decision making. The study finishes practitioners that investment in IoT technologies is a strategic move for better integration of supply chain partners for inventory status and market demand.
1.6 Brief Methodology
This research was conducted by employing the following methodologies in collecting and analyzing the data. Data was collected from the employees of automotive industry in Mercedes, Germany. Considering the research objectives and hypotheses, quantitative research method is employed and considered appropriate since it facilitates the examination of the hypotheses. This study also employs the deductive reasoning approach, which develops hypotheses from existing expertise and tests them through empirical observations (Andreev et al,. 2009). The hypotheses were tested based on empirical data using SPSS and STATA software. Consequentially, preliminary analytical procedures were undertaken to check the following: (a) the appropriateness of the data distribution (b) exploratory factor analysis (EFA) to examine the appropriateness, factor extraction (c) test for internal consistency and reliability, (d) tests of multi-collinearity among explanatory variables. Lastly, the hypotheses were tested for direct relationships using multiple linear regression models.
1.7 Structure of the Study
The thesis is consisted of five (5) chapters which was organized as follows: Chapter one provided a general overview of the entire study that is; background of the study, problem statement, aim and objectives, research questions and the significance of the study. Chapter two presented the literature review. The chapter reviewed literature on internet of thing, supply chain integration and performance. Chapter three provides discussion of the methodology adopted for the research. It also outlined the research design for the study. Chapter four also provides an in-depth analysis, presentation, and interpretation of results of all the data collected for the study in relation to the research objectives and questions mentioned in chapter one. The final chapter, Chapter five comprised of the conclusion, recommendations, limitations and other avenues for further research.
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter encompasses of the literature relating to the topic. This will comprise of both the theoretical, conceptual and empirical literature of evaluating the effect of Internet of Thing on supply chain integration and performance. It further discusses the theories underlying the study of Internet of Thing, supply chain integration and performance as well as the conceptual framework.
2.1 The Internet of Things (IoT)
Internet of Thing pertains to an extension or a new version of generic ICT (Borgia 2014), an evolution from internetworked computers to internetworked objects connecting previously unconnected “things” (De Vass, 2018). Uckelmann, et al., (2011) conceptualise IoT as a virtual world of ICT integrated seamlessly with the real world things. The IoT core concept was pioneered in 1999, when the Auto-ID Center of MIT used radio frequency identification tags with a unique electronic product code as a tool to identify and track supply chain commodities via the Internet platform (Verdouw et al. 2016). Although IoT originates from radio frequency identification, it is now a central element on its own with far reaching capabilities (Borgia 2014). The notion of IoT has evolved by complementing further competences such as sensory, context awareness, intelligence, pervasiveness, learning ability and automation to reach its conceptualized unlimited potentials (Kahlert et al. 2017). IoT is not a singular novel technology, but rather a collection of several complementary technologies that provide extended capabilities (Lee & Lee 2015). IoT has the potential to dramatically change our lives by making many impossible things possible, by connecting everything on the earth together via the Internet. Therefore, IoT is seen as a disruptive technology, due to the fundamental changes it is reported to generate. IoT uses the Internet as a global platform for devices to communicate, coordinate, compute and dialogue with each other (Miorandi et al. 2012). The capabilities and intelligence of IoT devices is posited to exceed the in-built functionalities of the device itself by using the Internet as a communication infrastructure, storage mechanism and a medium for data processing and information synthesis (De Vass, 2018).
2.2 Supply Chain Integration (SCI)
Supplier integration is defined as the coordination and information sharing with suppliers that provide the focal firm with insights into suppliers’ processes, capabilities and constraints, ultimately enabling more effective planning and forecasting, product and process design, and transaction management (De Vass, 2018). It is the extent to which a firm collaborates with suppliers to configure inter-firm practices, behaviours, procedures and strategies into synchronised, practicable and cooperative processes to meet customer demand (Huo 2012). Integration implemented in the supply chain, with the aim of collaborating with other supply chain partners, is to have a free flow of information and resources to manage both the intra and inter-organization processes and to ensure a smooth flow of operations. The aim of supply chain integration is to have a free flow of information or resources or money or products and services to serve customers in an efficient and effective manner. This, in turn, influences rapid organizational processes and reduces operating costs (De Vass, 2018). It also encourages supply chain patterns for strategic collaboration and provides both operational and strategic benefits. It encourages supply chain partners to share information, reduce risks in the supply chain and accelerate the duration of the contract and enhance trust between the partners (Huo 2012). It highlights the importance and outcomes of both the inter-organizational and intra-organizational processes. The objective is to achieve both operational and organizational performance. Supplier and customer integration refers to strategic common management, information sharing and in general collaboration between suppliers and customers (Yu et al., 2017). In order to obtain successful supply chain integration a system that joins all the information retrieved along every step of the supply chain is necessary. Supply chain integration is the last step of a successful IoT implementation. It is a cloud-based platform for business collaboration, which is based on a common set of Internet technology (Verdouw, et al., 2014).
2.3 Performance
According to Agwu, (2018) performance is the total wellbeing of an organization matching its results against assets committed to achieving the set goals. It is the attainment of organizational strategic goals (Almatroshi et al., 2016). It is the process of assessing the profitability, market share, increase of return on investment, increase of customer satisfaction, an increase of customer retention, and sales growth of an organization (Battor & Battor, 2010). It is the output-input ratio in the organization, the degree of target achievement, and the satisfaction of participants in the organizational process. One major issue that hems most managers is how their organizations perform in the marketplace (Tseng et al., 2013). Therefore, managers consider it as a fantastic management strategy (Gupta & Wales, 2017). Generally, the multifaceted nature of performance has gained the heed of researchers with multiple opinions on the most right way to measure performance (Gupta & Wales, 2017). The main objective of evaluating the performance is to define the difference between real and desired results and to determine the efficiency and effectiveness of the process. Performance measurement guided the organization to achieve a double improvement and an accurate evaluation of the benefits achieved. Performance indicators take into account sales and efficiency. It allows the shareholder to know the long-term success of the business and how it serves its own clients on the market. Understanding the aspects will make a company effective in providing good product quality to meet consumer expectations (Wisner et al., 2010).
2.4 The relationship between Internet of Thing and supply chain integration
The literature reports that IoT, as an extension of ICT (Borgia 2014), also has the extended ability to assist with real-time information flow thereby facilitating inter- and intra-firm communication to further integrate supply chains. The way Internet connects computers, IoT platform has the capability to potentially connect products, machines and people in sync, therefore coordinating and integrating the internal and external activities of an enterprise (Li & Li 2017).
Studies have long-established the positive relationships between ICT and supplier integration. Moreover, as per organizational capability theory, ICT as a core capability can positively influence supplier integration (Huo 2012). Studies have also found that while ICT does not have a direct relationship with performance ICT affects performance through its positive effect on SCI (Kim 2017). Vanpoucke et al. 2017; Zhang et al. 2011) from multidimensional angle, find IoT to be a crucial enabler for all three dimensions of SCI, namely supplier, internal and customer integration. Therefore they conclude that IoT, as a progression of ICT can enhance supplier, internal and customer integration capability. De Vass et al., (2018) studied the effect of Internet of Things on supply chain integration and performance. They draw upon the organizational capability theory for developing an empirical model considering the effect of IoT capabilities on multiple dimensions of supply chain process integration, and in turn improve supply chain performance as well as organizational performance. Cross-sectional survey data from 227 Australian retail firms was analyzed using structural equation modeling (SEM). The results indicate that IoT capability has a positive and significant effect on internal, customer-, and supplier-related process integration that in turn positively affects supply chain performance and organizational performance. Naser, H. A. N. (2019) examines the adoption of IoT in the supply chain environment and its reflection on the supply and company performance. Finding analysis reveals IoT added capacity which increases the transparency of the supply chain, auto-capture and sharing of information for greater SCI. The integration technology IoT demonstrates a positive impact on the entire supply chain's price, efficiency, distribution, and versatility and increases the sustainable performance of retail companies with performance, social, and environmental outcomes. Based on the above literature, we therefore hypothesize that:
H1: Internet of Thing has a positive effect on supply chain integration .
2.5 The relationship between Internet of Thing and performance
IoT is an emerging global Internet-based information service architecture facilitating the exchange of goods in global supply chain networks by generating value for all partners in order to improve performance (Lee & Lee, 2015). As an extended ICT capability, IoT is increasingly adopted to further improve performance (Borgia 2014). IoT can optimise how people and systems interact to coordinate their activities to better performance. Analytics can be applied to make improvements and promote best practices for greater performance across the entire IoT operational efficiency, safety and security and customer experience (Ben Daya et al. 2017). ICT capability is also likely to influence performance through quality improvements, enhanced productivity and utilization, reduced waste and ultimately, increased supply chain efficiency and effectiveness. Academic literature has provided enough empirical evidence on the relationship between IoT and performance, or the effect of IoT capability on SCI the mediation link theorized to be paramount for performance. However, there is emerging consensus about this omission (Ben-Daya et al. 2017; Mishra et al. 2016). Therefore, empirical examinations on whether IoT can strengthen SCI to influence performance have been thoroughly studied (De Vass, et al., 2018; Verdouw et al. 2016). Based on the above empirical studies, we hypothesize that:
H2: Internet of Thing has a positive effect on performance
2.6 The relationship between supply chain integration and performance
From the organizational capability theory perspective, a firm’s integration capability is viewed as a dynamic organizational capability that has a direct effect on performance (Huo 2012). The theory suggests that integration prevents opportunistic behaviours, curtails production and transaction costs and enhances resource obtainability, while facilitating knowledge sharing among supply chain partners, consequently improving the ability to cope with environmental uncertainty (Huo 2012). Literature suggests that partner integration can minimize costs via waste reduction and asset utilization and also help supply chains to be more flexible, adaptive, reactive and responsive to cope with risks and market uncertainty hence improves performance (Reaidy et al. 2015). Literature further suggests that supply chain integration impacts organizational performance positively (Vanpoucke et al., 2017). The real time information provided by IoT helps track supply chain activities, from product design to the end users, providing accurate and timely information to help organizations respond to the market changes (Mishra et al., 2016). While supply chain strategy yields performance by focusing on cost, quality, delivery and flexibility improvement, it attempts to align with the firm objectives of improving performance to generate environmental, social, and economic benefits (Owuso, & Jaja, 2022). De Vass et al., (2018) studied the effect of Internet of Things on supply chain integration and performance. Cross-sectional survey data from 227 Australian retail firms was analyzed using structural equation modeling (SEM). The results indicate that supply chain integration has a positive and significant effect on organizational performance. De Vass, (2018).Examines the effect if Internet of Things enabled on supply chain integration and performance using mixed method investigation of the Australian retail industry. The results reveal that IoT capability is perceived to have a positive influence on internal and external process integration that, in turn, positively affects supply chain and firm performance. Further, IoT-enabled external integration was perceived to influence supply chain performance significantly more than IoT-enabled internal integration. The following studies also found a positive relationship between supply chain integration and performance (Owuso, & Jaja, 2022; Vanpoucke et al. 2017; Prajogo & Olhager 2012). From the empirical studies above, we hypothesize that:
H3: S upply chain integration has a positive effect on performance
Abbildung in dieser Leseprobe nicht enthalten
Figure 2.1: Conceptual framework of the study
2.7 Related Theories
This point presents the theoretical foundations that guide the study of the effect of IoT on supply chain integration and performance in the automotive industry. The two main theories underpinning this work are organizational capability theory and system theory.
2.7.1 Organizational Capability Theory
IoT adoption can be viewed as an additional capability that may add value to the current configuration of ICT capability within any organization. It is important for studies to utilize and treat IoT as a progression of ICT capability that may facilitate intra- and inter organizational communication and information flows in more integrated way (Borgia, 2014). The intra- and inter organizational information sharing information communication and inter-firm relationships together represent process integration capabilities (De Vass, 2018). The inter and intra organizational communication and information exchange are perceived to be facilitated by IoT capability. Organizational capability theory related to resource-based view theory suggests that a firm must develop its own resources and capabilities for performance improvement (Huo, 2012). Integration is a higher order process capability that can directly influence firm performance (Huo, 2012). Organizational capability theory also suggests that internal integration can directly affect external integration where internal process integration is the base for the development of the firm’s external process integration (Huo, 2012). Verona (1999) suggest that internal capabilities include internal communication, process integration and job training, while external capabilities represent external communication and networks of partners. ICT implementation itself cannot have a direct effect on performance; rather it needs to be blended with the other organizational resources for performance improvement. Hence, IoT can improvs the integration capability of an organization as ICT (De Vass, 2018).
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