Automatic Replenishment Programs: The Impact of Organizational Structure

Many firms have shifted to response‐based supply chain systems instead of traditional push systems. Research results are presented covering a specific type of response‐based system, Automatic Replenishment Programs (ARPs), in which inventory restocking is triggered by actual sales. The paper looks at the influence of organizational structure, i.e., centralization versus decentralization, on ARP performance and information systems capabilities. Results are mixed. Decentralized firms reported higher performance relating to specific ARP‐related goals. However, no differences were found at a more global level when ARP relationship performance and profitability were examined. Even fewer differences were found between centralized and decentralized firms with respect to their information systems capabilities.