Factors affecting information sharing between supply chain partners and the effect of information sharing on supply chain performance : a context of Nepal

In today's competitive business environment, no company can survive without coordinating, cooperating and collaborating with their supply chain partners. Information sharing is an integral aspect of supply chain management. To accomplish the three important Cs of supply chain management, cooperation, coordination and collaboration, information sharing plays a key role. However, supply chain partners are hesitant to share information with each other due to various reasons. It is important to identify the factors that influence information sharing in supply chains. A systematic review of the literature reveals that the research in this field has extended from the study of information characteristics, organisational characteristics and relationship characteristics to environmental characteristics and economic characteristics as the factors affecting information sharing in supply chains. However, previous studies are limited in terms of the number of factors being examined and the categories of the factors. Although in a segmented manner, a large number of factors appeared in the literature, many of them were repeated using different terminologies or overlapped with other factors and others were completely missing. Furthermore, many factors have not been adequately studied because some factors have only been proposed through theoretical discussions and others have only been studied in a particular context. Moreover, most of the studies have been done in countries where supply chains have been well developed. Finally, there is a dearth of work that identifies the antecedents of information sharing and further explores the role of information sharing on supply chain performance. With the above gaps in the literature, this study identified a comprehensive list of factors affecting information sharing in supply chains and investigated the effect of information sharing on supply chain performance. In addition, this study also grouped the identified factors into four categories based on how they arise. Furthermore, to fill the gap of limited studies conducted in developing countries this study was carried out in Nepal which is different from developed countries in a number of aspects. Hence, the first primary research question for this study is: How is information sharing affected in supply chains in the context of Nepal? To answer the first research question, this study investigated i) the critical factors affecting information sharing in supply chains in Nepal; and ii) how these factors affected information sharing at operational and strategic levels. The second primary research question is: How does information sharing affect the supply chain performance of individual firms in the context of Nepal? To answer the second research question, this study examined i) the effect of operational information sharing on supply chain performance of individual firms in Nepal; and ii) the effect of strategic information sharing on supply chain performance of individual firms in Nepal. To answer the two primary research questions, this study used a convergent parallel mixed method research design comprising of a questionnaire survey and semi-structured interviews with supply chain participants in Nepal. The invitation to participate in the survey was dropped-off to the associate/general members of the Federation of Nepalese Chamber of Commerce & Industries (FNCCI) and Nepal Freight Forwarders Association (NEFFA). Random sampling technique was used to generate a list of 215 companies from the population of 558. Emails were also sent to potential participants including the link to the online version of the questionnaire as well as its electronic copy to provide them with different options to complete the survey. In total, 135 responses were received out of which four were invalid due to incomplete information, representing an effective response rate of 60.9 percent. For the semi-structured face-to-face interviews, nine from a sample size of 15 supply chain members participated, representing a response rate of 60 percent. The results of the data analysis (quantitative and qualitative) reveal that a number of critical factors across all four categories had a significant effect on information sharing in supply chains in Nepal. The quantitative results show that operational information sharing is significantly affected by interaction routines, organisational compatibility, incentives, project payoffs, commitment, personal connection and top management commitment while strategic information sharing is significantly affected by interaction routines, government support, personal connection and monitoring. The research model explained 38 and 31 percent of the variations in operational and strategic information sharing respectively. The results from the qualitative analysis were largely congruent with the quantitative results. The results also confirmed that information sharing affected supply chain performance. While the effect of information sharing on cost and quality performance was not statistically significant, delivery and flexibility performance was significantly affected by operational as well as strategic information sharing. This thesis contributes to the literature by simultaneous empirical analysis of the cause and effect on information sharing in supply chains. This study identified a wide-ranging list of factors affecting information sharing in supply chains and empirically examined their effects on information sharing and the effect of information sharing on supply chain performance. The results of this study exhibits how supply chain members in Nepal perceive information sharing and what factors affect them to share information with their partners. The results also show that not all factors postulated to affect information sharing in developed countries were applicable in the context of Nepal. It provides support to the fact that not all supply chains are same and hence, context-specific research is imperative. Hence, it fulfils the need to conduct such studies in less-developed countries that are different in many aspects such as economic, political, legal, social and cultural settings. On the performance side, significant variations exist in the studies conducted previously. Some authors considered information sharing and supply chain performance as onedimensional constructs while some considered information sharing as one-dimensional and supply chain performance as multi-dimensional. Few studies have considered both as multidimensional constructs. While all the authors who considered information sharing as multidimensional construct separated it into operational and strategic levels, the components of supply chain performance varied. By considering information sharing at operational and strategic levels and supply chain performance as cost, quality, delivery and flexibility performance, this study confirmed the need to consider information sharing and supply chain performance as multi-dimensional constructs. From an industry perspective, it illustrates that information sharing between supply chain partners can be enhanced by improving the identified factors, which in turn will enhance supply chain performance. While many authors have identified information technology as an important precursor of information sharing, this study provides empirical evidence to show that information technology might not be as important in developing countries because of its high cost and compatibility issues. The results suggest that for a country like Nepal with limited IT advancements, factors such as interaction routines and personal connection can have more value than IT. The findings of this study can help practitioners in Nepal to improve those factors that had a significant effect on information sharing rather than focussing on all the factors that theories have suggested. This study contributes to the development and improvement of supply chain management in Nepal by providing them a better understanding of the importance and benefits of information sharing in supply chains. This study also highlights the need to enhance information sharing between supply chain partners for firms to achieve their individual as well as supply chain goals. The main limitation of this research is the moderate sample size compared to the large number of items in the data set. In addition, small companies were excluded as potential respondents in this study. Larger sample size should be aimed in future studies to improve the EFA results. To incorporate small companies, future research may frame their survey/interview instrument in a way that can be understood and answered by small firms. As this is the first study conducted in a country like Nepal, future research can be conducted in similar countries, land-locked and low-income, to improve the generalisability of the findings. Future research can also consider conducting empirical analysis to confirm the four categories of factors as proposed in this study. Finally, since information sharing can enhance trust, commitment and integration between supply chain partners, future research may consider a feedback loop analysis from information sharing to such factors to enrich the findings.