Impact of information technology integration and lean/just-in-time practices on lead-time performance

Managers seeking to improve lead-time performance are challenged by how to balance resources and investments between process improvement achieved through lean/just-in-time (JIT) practices and information technology (IT) deployment. However, extant literature provides little guidance on this question. Motivated by both practical importance and lack of academic research, this article examines empirically the relationships among interfirm IT integration, intrafirm IT integration, lean/JIT practices, and lead-time performance using data from IndustryWeek's Census of Manufacturers (IndustryWeek, 2006). The results provide several new insights on the relationship between IT integration and lean/JIT practices. First, the study confirms that implementing lean/JIT practices significantly reduces lead time. Second, lean/JIT practices mediate the influence of IT integration on lead-time performance. This suggests that process improvements that result from lean/JIT practices are important contributors to the success of IT integration. Even companies that have experienced success in reducing lead time through lean/JIT practices may benefit from IT integration practices such as those embodied in enterprise resource planning systems. The findings provide managers with empirical evidence and a theoretical framework on the balance between lean/JIT and IT for effecting improvement in lead-time performance, thus offering practical guidance on this important question. Future research is needed to extend the lean/JIT practices in this study to supply chain practices and explore the relationship between supply chain practices and IT integration.