The capability to develop and sustain superior knowledge of markets and
supply chains, or supply market intelligence (SMI), is an important
element in increasing the strategic relevance of purchasing and supply
management (PSM). This study draws on information processing theory
(IPT) to shed light on how firms acquire SMI. In particular, the study
aims to identify the drivers and mechanisms of information processing in
SMI acquisition and to explore how the two constructs are related. Our
findings emerged from an abductive multiple case study including 22 SMI
tasks in eight case companies operating in various manufacturing
industries. We find that the drivers of information processing needs in
SMI acquisition are related either to uncertainty or equivocality.
Uncertainty describes a situation in which decision-makers may be
ignorant of a variable's value while equivocality describes a situation
in which they may be ignorant of the variable's existence. We identify
four structural mechanisms and three information technology mechanisms
for information processing in the SMI context. We also find that
equivocality seems to trump uncertainty in determining the use of the
identified SMI acquisition mechanisms. In addition to elaborating IPT in
the SMI context and exploring the theoretical foundations of SMI, we offer practitioners a framework for supporting the design of SMI practices in procurement organisations.