留學生dissertation網-物流供應鏈留學生畢業dissertation-發展演化的供應鏈：案例與最佳做法-E-volution of a supply

留學生dissertation網提供物流供應鏈留學生畢業dissertation。E-volution of a supply chain: cases and best practices
Dimitris Folinas
Vicky Manthou
Marianna Sigala andMaro Vlachopoulou
The authors
Dimitris Folinas is a Researcher and Vicky Manthou isAssociate Professor, both in the Department of AppliedInformatics, University of Macedonia, Thessaloniki, Greece.
Marianna Sigala is a Lecturer in Operations and ProductionManagement, Business Administration Department, Universityof the Aegean, Chios, Greece.Maro Vlachopoulou is Associate Professor, Department ofApplied Informatics, University of Macedonia, Thessaloniki,Greece.
Keywords
Supply chain management, Case studies, Electronic commerce
Abstract
Supply chain management (SCM) is an integrating philosophy tomanage the total flow of materials, information and finance fromsupplier to ultimate customer. The goal of SCM is to meet theneeds of the final consumer by supplying the right product at theright place, time and price. Companies use SCM as a way to meetthe competitive challenges of today’s business environment. Thefocus of SCM has shifted from engineering efficient functionalprocesses to the co-ordination of activities in a supply chainnetwork. The aim of this paper is to examine the stages in theevolution of the supply chain to an electronic supply chain. Toillustrate and support the types of evolutionary progressinvolved, best practices and case studies are provided andanalysed.
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Introduction
Supply chain management (SCM) in the newbusiness era is considered as a medium forachieving short-term economic benefits andgaining long-term competitive advantages. SCMcan be considered as an aggregation of approachesand efforts supporting the efficient consolidationof producers, suppliers and distributors, in effect aco-ordination of the value chain so that productsare produced and distributed in the right quantity,at the right quality, at the right time and at the rightplace to ultimately achieve consumer satisfaction(Simchi-Levi et al., 2000). Current advances ininformation and communication technology(ICT) have revolutionised SCM to make it amechanism that enables diverse andgeographically disperse companies to createalliances to meet a new form of Internet-orientedconsumer demand (De Man et al., 2002). Thesealliances represent advanced and dynamicallychanging networks that aim to become competitiveby focusing their resources on bringing elements ofe-business to specific market segments. In otherwords, the focus of SCM has shifted from theengineering and improvement of individualfunctional processes to the co-ordination of theactivities of a dynamic supply chain network. Thetremendous transformations fostered bye-business have called for SCM research (Grieger,2002).#p#分頁標題#e#
This paper aims to develop a framework foridentifying and analysing the various types of SCMranging from the initial efforts towards optimisingmain and isolated business functions to thecreation of virtual enterprise networks, which byadapting several e-business models and practicesare totally dependent on the Internet. Fiveparameters are used for identifying the varioustypes of SCM:
(1) the business strategy;
(2) co-operative relationships among clients andpartners;
(3) the degree of application of innovatortechnologies;
(4) the management/evaluation of information fordecision processing; and
(5) basic logistics functions.Specific examples, case studies and best practicesare provided to illustrate the evolution of SCM andsupport the development and applicability of theproposed SCM evolutionary framework. Thelatter has both operational and strategic value.Enterprises can use it as a useful tool for evaluatingand managing the efficiency of their existing
logistics and supply chain systems. Furthermore,
the framework can be used as a strategic tool foridentifying future trends and dynamics that may
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q Emerald Group Publishing Limited · ISSN 1066-2243
DOI 10.1108/10662240410555298
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enforce and justify the adoption of e-businessapplications and practices.
Types of supply chain evolution
Internet and e-business applications significantlyinfluence the operation of SCM (Hoek, 2001).
New communication channels are required tosatisfy the increasingly varied and sophisticateddemand trends for lower prices and faster delivery.Consequently, firms are now facing pressure toexpand beyond the frontiers of their traditionalsupply chains. Customers now expect Web-basedorder-status tracking capabilities, electronic proofof delivery, flexible manufacturing and immediateservice based on call centers and Web-basedcustomer service systems, self-service, and
personalised interaction. Production, marketing,distribution and transportations are now blurredinto a single procedure, creating the need forfulfillment and re-engineering. In this light, theability to gather, disseminate and analyseinformation becomes the foundation of e-supplychain evolution, and consequently companies aretrying to offer total integrated logistics servicesthat address not only the main logistics functions,but also all the ICT needs of the supply chain(Grieger, 2002).
A reveiw of the literature shows that numerousapproaches regarding the evolution and type ofSCM are to be found. Someanalysts, such as
Burnes (1996), LaLonde (1998), Muzumdar andBalachandran (2001) and Noekkenved (2000)support a three-phase evolutionary process, whileStraus (2002) advocates a four-phase evolutionary
process, and others even advocate a five-phaseprocess (Durchslag et al., 2001; Poirer and Bauer,
2001; Stein, 2001). In this paper, these approachesare summarised and integrated within thefollowing types of SCM (Figure 1):#p#分頁標題#e#
. core logistics activities efficiency;
. co-ordination of internal organisational
processes;
. inter-enterprises business exchanges; and
. establishment of dynamic networks betweenvirtual organisations (Manthou et al., 2002).The first two types are related to a single enterprise(internal), while the last two relate to a cluster ofenterprises (external). These types are analysedbelow.
The following five key dimensions were appliedto identify and classify the four types of SCMevolution:
(1) business strategy;
(2) customer and partnership relationships;
(3) technology implementation;
(4) information/decision making; and
(5) orientation of logistics processes/activities.
These dimensions were used as they cover all thebusiness and technology aspects of a supply chainmember (Manthou et al., 2002). Thus, enterprisesfalling into different SCM types have differentproperties and characteristics, as well as differentmeans of implementation and utilisation ofresources.
The SCM types are analysed in the followingsections. Furthermore, synoptic tables includingall the key dimensions are presented to illustratethe main character of each SCM type. Overall,enterprises can use these tables as a roadmap forboth SCM strategic planning and transformationas well as operational, day-to-day evaluation ofSCM systems.
Type 1: core logistics activities efficiencySome analysts refer to this type (Table I) as“fundamental” or “inception” SCM (Dobbs,1998; Poirer and Reiter, 1998). This typerepresents a company’s first effort to apply supply
chain techniques by pursuing logisticsimprovements in specific activities and specifically
by leveraging its total volume over a smaller base ofsuppliers. Business benefits of this type includebetter quality, lower prices, inventory reductionsand lower costs. Analytically, each functional areaor department plans and operates in an isolatedenvironment. The structure is strictly hierarchicaland the various departments operate as individual
units creating an environment consisting of“isolated islands” of ICT systems and informationuse, sharinganddecisionmaking processes.
Overall, this type is function- rather thancustomer-centric, as it focuses on creating valuefor the various departments/functions, and not onaligning processes and collaborating with the
customer or partner. Consequently, opportunitiesfor gaining a strategic advantage are limited.
Type 2: co-ordination of internalorganisational processes
Analysts have called this type (Table II) “crossfunctional”,“developmental” or “integrated”.Cross-business unit co-operation arises to achieveinternal excellence. From an ICT perspective, thislevel represents the initial stage of e-commerceinfrastructure development, whereby companiesdevelop internal information support systems,networks (intranets) and enterprise systems, whichin turn foster business process re-engineering andE-volution of a supply chain: cases and best practices#p#分頁標題#e#
Dimitris Folinas, Vicky Manthou, Marianna Sigala and Maro VlachopoulouInternet Researchsupport the evolution of the supply chain. So, byutilising a centralised database environment,enterprise-wide systems (enterprise resourceplanning; ERP) can significantly contribute to theintegration and co-ordination of ICTand businessoperations. Moreover, apart from supportingelectronic communication and partnerships withmain suppliers, intranets are also used to supportand co-ordinate distribution and transportationmanagement as well as to ensure the alignment of
production with procurement. Regarding supplychain planning and execution decisions, these aretaken at an enterprise-wide level and aim not onlyat performance and cost optimisation, but also atbetter customer service and automation oftransactions. As enterprises grow and demand forexpanded supply chain services rises from bothmain upstream and downstream players,companies are faced with increasing challengesand requirements for process integration alongtheir whole supply chain.
Type 3: inter-enterprise business
exchanges
The orientation of these types of companies movesto a more dynamic model that tries to balanceinternal improvement with external needs of theentire supply chain network (Table III). In theFigure 1 The evolution of supply chain
Table I Dimensions and key elements of the first SCM evolutionary typeDimensions Key elementsBusinessstrategy
Narrow and functionally focused in a reactive mode
Departmental, fragmented, partial
Deep functional expertise
Sales growth
Cost reduction
“Push” model
Customer and
partner
relationships
One-way communication
Limited trust
Win-lose interactions with vendors
Reactive customer service
Low, fixed supplier base
Pure or segmented standardisation
Technology Legacy/departmental systems, “island” of information
留學生dissertation網提供物流供應鏈留學生畢業dissertationsystems, materials requirement planning (MRPI)
Data-driven, batch process models
National and industry-oriented electronic data interchange
(EDI) data structures of information exchange
Point-to-point direct connections
Information/
decision
making
Silo-based, by functional managers and key associates based
on limited information visibility and standardisation
Limited information visibility and standardisation
Decision-making based on historical data
Logistics
processes/
activities
Limited dissemination of information and minimal interaction
with other functional areas/business units
Departmental procurement and sales planning and execution
Limited feedback from customers, reactive customer service
“Push” model
Planning and execution based on historical data#p#分頁標題#e#
Limited visibility
Manual/labour-intensive order processing
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search for network improvement and customersatisfaction, external resources are added tointernal teams. Enterprises also aim to createstrong customer relationships and differentiatetheir services by providing personalised products/services and valued-added information. This stageis also characterised by a transition of the supplychain flow from a push model towards theconsumer to a pull model, in which the consumerpulls the product/service via actual demand. Theoverall aim of such strategies and practices is theacquisition of greater market share. At thetechnology level, innovative Internet technologiesare also exploited to execute transactions amongbusiness partners as well as to automate exchangesof business documents (e.g. purchase orders,invoices). At this stage, information exchange isthe only requirement for accomplishing specifictransactions, such as a product order from asupplier. Thus, contrary to dynamic networks ofvirtual enterprises, which have a more strategiccharacter, these value-added partnerships are onlyapplied in a strictly operational manner to silos oflogistics departments. As these partnershipsexpand beyond the organisational boundaries,
they are considered as “extended supply chains” or“integrated logistics networks”, and their degree ofoperational integration and synchronisation alongthe supply chain becomes the more criticalbusiness success or failure factor.
Table II Dimensions and key elements of the second SCM evolutionary type
Dimensions Key elements
Business strategy Information flow efficiency, spanning multiple business
processes
Prioritised improvements across the enterprise
Enterprise-wide “push” model
Multiple business process mapping
Soft skills, ability to lead and work in cross-functionalteams and in multiple business processes
Customer and
partner relationships
Access in central database
Interaction (forms, bulletin boards, FAQs, catalogues, emails)
Low transparency, no centralised market
Arm’s length relationships
Interaction in standardised processes
Customised standardisation
Technology MRPII, ERP, distribution resource planning (DRP)
Total quality management (TQM), business process
reengineering (BPR), activity-based costing (ABC),
just-in-time (JIT)
International EDI data structures
Value-added networks (VAN)
Intranets
Internet
Information/decision
making
Business process focus, medium effectiveness because
of limited standardisation of information across the
enterprise
Internal, centralised (for corporate planning) share of#p#分頁標題#e#
information
Integrated cross-functional decision making based on
central database management systems
Logistics processes/
activities
Integrated systems based on MRP/ERP in order to make
efficient long-range planning decisions
Decisions based on central DBMS
Cross-departmental decision making
Integrated systems based on MRP/ERP in order to make
efficient long-range plans
Customer segmentation
Management of marketing and sales based on
integrated database systems
Increased warehouse management and automation
(picking, packing and shipments)
Table III Dimensions and key elements of the third SCM evolutionary type
Dimensions Key elements
Business strategy E- partnership, e-services
Inter-enterprise business efficiency
Best partner performance
Extended enterprise, “pull” model (build-to-demand),
Web-based services
Alignment with inter-enterprise processes, interenterprise
process optimisation
Focused on inter-enterprise processes, extended
enterprise management skills
Inter-enterprise decision making
Customer and
partner relationships
Data and information exchange
Automated (front-end CRM)
High inter-enterprise transparency
Joint ventures, partial alliances
customisation
Technology Extended ERP, front-end CRM, partners relationship
management (PRM), SCM
Efficient consumer response (ECR), enterprise
application integration (EAI), integrated demand
forecasting, planning and scheduling
High complexity (incompatible system interfaces,
heterogeneous platforms and external systems)
International EDI data structures or national and
industry-oriented XML data structures
Extranets, Internet
Information/decision
making
Extension planning process beyond enterprise, limited
collaboration
External information-sharing with vendors and
customers
Decision making by cross-functional teams based on
core competencies
Logistics processes/
activities
E-catalogs, e-procurement, e-orders, e-auctions
Vendor management inventory (VMI), ECR
Proactive customer service, one-to-one marketing, frontend
CRM
Automated customer service using e-business
techniques and methodologies
“Pull” model
Planning and production based on CAD/CIM systems
Strong linkage between plan and execution
Logistics network optimisation
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To achieve such integration, information
management and sharing becomes a central and
vital SCM issue (Barrett and Konsynski, 1982;#p#分頁標題#e#
Palvia and Lee, 1996; Shore, 1996, 2001). One
popular characterisation of poorly managed
information flows is the “bullwhip effect”, in which
demand variability amplification through the
supply chain sequence leads to inaccurate
forecasts, low capacity utilisation, excessive
inventory and inadequate customer service (Lee
et al., 1997). Studying the high technology
industry, Lee et al. (2000) concluded that
information sharing could significantly minimise
the consequences of this problem. Handfield et al.
(2000) provided evidence of the crucial role of
partners’ co-ordination and relationship
management for the success of SCM. Studying
supplier development in 84 companies, they
concluded that lack of supplier commitment and
insufficient resources on the part of suppliers can
substantially and negatively affect SCM
efficiencies. However, although the technical
issues associated with ICT in SCM and the ability
to effectively design, operate and manage the
technical infrastructure are critical to the success
of these systems, social factors are also cited as
being vitally important. Specifically, in
investigating the effect of partnership quality on
ICT outsourcing, Lee and Kim (1999) found that
information sharing, participation and top
management support were significantly related to
partnership quality. However, similarity among
corporate cultures was evidenced to have “no
effect on partnership quality”. Kumar (1996)
addressed the issue of trust between
manufacturers and retailers, while Hart and
Saunders (1997) addressed power and trust in the
adoption of EDI technology. Others who have
considered social factors include Stuart and
McCutcheon (2000), Lee et al. (2000) and
Handfield et al. (2000). Recent studies (Kern and
Willcocks, 2002; Sigala, 2004) proved that trust,
information sharing, commitment and alignment
of organisational culture are factors which
determine success in ICT outsourcing
relationships.
Finally, this type is also referred to as the
“acceleration phase”, because as it fosters different
value chain constellations it creates new, dynamic
business-to-business (B2B) models and innovative
models (Poirer and Bauer, 2001).
Type 4: establishment of dynamic
networks between virtual organisations
The final type involves the development of esupply
collaborative models and full network
connectivity among virtual enterprises (Table IV).
Firms also adopt advanced SCM concepts in order
to optimise the use of mutual assets, minimise
costs, and surpass consumer expectations. At the
same time, external and dynamic environments are
also created for leveraging e-business applications#p#分頁標題#e#
and enhancing supply chain optimisation.
However, by converging e-business with the supply
chain, new e-business models are created that help
companies and their partners to achieve market
dominance. Specifically, enterprises and their
partners foster the development of communities,
marketplaces or supply chain synergies aiming to
meet common aims and objective goals (Poirer and
Table IV Dimensions and key elements of the fourth SCM evolutionary type
Dimensions Key elements
Business
strategy
Broad-based collaboration, customer value
Dynamic network competitive advantage (real-time
visibility, flexibility, customer responsiveness)
Virtual business communities/networks
Virtual, rapidly re-configurable, dynamic
Broad-based collaboration, integrated organisational
team structures at multiple levels
Knowledge management systems
Hard-skilled staff in advanced ICT
Customer and
partner
relationships
High trust
Full sharing of information and processes
Collaborative relationships
Based on knowledge management (analytical CRM)
High inter-enterprise knowledge management
Pure customisation
Technology Integrated e-business solutions, data- and Web-mining
systems, analytical CRM
CPFR, knowledge management (data- and Web-mining
methodologies)
High complexity (increased semantic diversity, many
flavors of XML-schema chaos)
International XML data structures (schemas)
Dynamic virtual networks
Information/
decision
making
Full sharing and information visibility, real-time
collaboration
Collaborative design, planning and demand forecasting,
virtual network life-cycle management, collaborative
proactive decisions
Decision making based on analytical and knowledge
management capabilities
Logistics
processes/
activities
CPFR
Long-range relationships
Broad-based collaboration around business processes
that extend beyond the enterprise to key customers and
suppliers
ECR
Collaborative scheduling
Sales, marketing and customer service based on
knowledge management and analytical CRM systems
Knowledge management
Real time information and visibility
Dynamic network optimisation
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Bauer, 2001; Durchslag et al., 2001). Such
marketplaces are either created or controlled by
existing “mortar” companies (e.g. the autobytel
e-marketplace), new start-up players
(hospitalitysupplies.com) or by co-operations (e.g.
industry consortia such as Covisint in the#p#分頁標題#e#
automotive industry, Transora in the retail
industry and myAircraft.com in the aerospace
industry).
The dynamic nature of the enterprise network
gives a significant competitive advantage to
participating enterprises and renders them capable
of coping with the new conditions of the global
market (Simchi-Levi et al., 2000; Kulin and
Rosenbaum, 2000). To achieve that, emphasis is
given on the high level of information and
processes integration among members (Folinas
et al., 2001; Manthou et al., 2001, Hinterhuber
and Levin, 1994; Pfohl and Buse, 2000; Sydow,
1996). Through collaboration, supply chain
partners may become involved in such processes as
advanced planning and scheduling, demand
planning and scheduling, or inventory
management (Hamel and Prahalad, 1990). More
enhanced e-marketplaces also move towards
product co-design, joint planning and production
capabilities (e.g. Transora). Collaboration
enhances the possibilities of virtual supply chain
networks to flourish and boom. For example,
co-operative virtual networks allow their members
to jointly co-operate in:
. the design and development of new products;
. demand forecasting (by disseminating and
sharing information along the supply chain);
. flexible usage of all available resources; and
. better and faster response to customer
demand.
To foster and support collaboration, supplier
alliances with extensive two-way information flows
and integrated systems are essential (Stuart and
McCutcheon, 2000). Integrated systems can
utilise the existing information stored in ERP,
e-business and customer relationship management
(CRM) applications (Handfield and Nichols,
1999). However, at this stage, data sharing goes
beyond internal systems and expands to include
planning and control systems within supplier
organisations. For this type of SCM, the
philosophy is more than a database processing or
management information system (MIS). Instead,
the SCM philosophy is a decision support system
(DSS) that helps managers to take decisions
efficiently and effectively when they are planning,
operating and controlling the networked
organisation (Chopra and Meindl, 2000; Zheng
et al., 2000). For example, a system identifying
demand changes on retailers’ shelves may initiate
changes to the aggregate production plan, the raw
materials requirements, the purchasing plan, and
overall, to all stages in the manufacturing and
distribution network.
Evaluating SCM types: cases and best
practices
Having discussed the different types and evolution
of SCM based on Internet advances and business
models, this section aims to illustrate the
applicability and value of the proposed framework#p#分頁標題#e#
by identifying and discussing a series of cases and
best practices.
Nowadays, most businesses have already
adopted or are planning to adopt the first type of
SCM (Cagliano et al., 2003) in order to automate
procedures of their procurement department and
capture the benefits of decreased inventories and
costs. A variation on and a more sophisticated
implementation of such models is found in
corporations that exploit ICT to apply SCM in a
centralised manner, spreading but also optimising
SCM costs at a corporate-network level. For
example, Sigala (2003) described and analysed
how five major hotel chains (Marriott
International Inc., Hyatt Hotels Corporation,
ClubCorp USA Inc., Bass Hotels and Resorts, and
Fairmont Hotels and Resorts) achieved enterprisewide
procurement benefits by using avendra.com
(an Internet-enabled procurement systems) in
order to control and organise procurement
centrally for all their hotel properties.
Nevertheless, even in this case, SCM benefits are
derived only from the procurement function, and
particularly from centralisation (e.g. downsizing
effects).
As discussed previously, further business
benefits accrue when SCM practices are aimed at
rationalising procurement along the whole
business value chain. A typical example of the
implementation and benefits of this second type of
SCM is Benetton. Benetton was one of the first
manufacturers in the industry to start
collaborating and exchanging information with
downstream supply chain players in order to better
co-ordinate its production operations. Specifically,
Benetton has allied itself with key retail stores to
collect point-of-sales data and determine the
product mix and the assortment of colours to be
produced. Although this required heavy
investment in internal and external ICT
infrastructures, this agility of Benetton’s supply
chain would not have been successful without the
re-engineering of its business processes.
Specifically, Benetton’s operational flexibility was
enabled through a product and process redesign,
whereby sweaters were first knitted in gray and
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then dyed to the desired color. In other words,
Benetton exploited supply chain integration to
foster benefits across its whole value chain and
system, from sales and distribution to production
processes and efficiency.
However, in order to be competitive in today’s
global and dynamic market, organisations need to
forge tighter and closer working relationships with#p#分頁標題#e#
their supply chain partners. The Internet provides
organisations with the opportunity to extend their
internal information systems beyond their
boundaries in order to incorporate their partners,
and then all behave like a single, unified virtual
enterprise. New e-business models and
technologies support the successful
implementation of e-supply chains by breaking
down barriers among business partners all along
the chain. New Web-based business networks are
established which, by enabling the global visibility
of the customer, the product, or supply
information throughout the supply chain, are
replacing linear supply chain models. In this way,
Web-based networks provide professional
customer response services, fast and accurate
product delivery, rapid decision-making
environments, and synchronised global supply
chains. As a result, businesses can further enhance
their customer relationships and gain the benefits
of repeat business.
These benefits can be partly achieved by
“extended supply chains”, as described by the
third type of SCM. Reyes et al. (2002) used a case
study from the telecommunications industry in the
US to illustrate the importance of inter- and intra-
SCM, achieved not only by integrating internal
systems but also by collaborating with both
upstream and downstream supply chain partners
and entities. The case study describes the specific
supply chain synchronisation problem of a
telecommunications original equipment
manufacturer (OEM) and the implementation of
an advanced planning equipment and scheduling
(APS) system that extended beyond its four walls
to address this problem. The OEM implemented
APS to integrate its internal demand flow system
with e-business software and enabled real-time
collaboration with trading partners, which in turn
resulted in specific business benefits that
encompassed the whole supply chain. This case
study highlighted the need to:
. focus on business results;
. adopt a common business model across the
global supply chain;
. focus on process, people and technology;
. deliver value at regular intervals; and
. move fast.
Strong leadership was found to be paramount to
the success of e-business systems, but APS was
found to lead to competitive parity. Thus, Reyes
et al. (2002) concluded that companies seeking a
competitive advantage are currently establishing
“private” collaborative commerce networks with
their own trading partners. The benefits to
suppliers from a strong supply chain facilitated by
APS for e-business systems, as described in the
case study, are that:
. it allows suppliers to forecast their inventory
needs, eliminating the need to acquire#p#分頁標題#e#
products from alternative sources;
. it transforms customer relationships into
supply chain partnerships and allows suppliers
to differentiate themselves from competitors
on their value-added service offerings; and
. it increases revenue from existing accounts
while creating new customer revenue streams.
The benefits to customers from a strong supply
chain facilitated by APS for e-business systems, as
described in the case study, are that it allows them
to (Reyes et al., 2002):
. share inventory management functions;
. reduce on-site and in-transit inventory stocks;
. reduce working capital costs; and
. reduce the need for emergency shipments,
thereby reducing transportation and
administration costs.
Amazon.com and Barnes and Noble are also good
examples, illustrating how evolving industry
standards can affect data-sharing strategies
between customers and suppliers. Amazon.com
does not stock all the books advertised on its site,
but shares customers’ order data with suppliers to
speed customers’ orders. However, to further
increase their operational agility and business
benefits, businesses are increasingly exploiting
Internet advances and models to form dynamic
supply chain networks between virtual
organisations and communities. Good examples of
such dynamic networks, as described by the fourth
type of SCM, are Smart Car, Coca-Cola Bottling
Co., Baker Street Technologies, Lexmark
Electronics, SciQuest.com, Motorola, value chain
(for Dell.com), eHub (for Cisco) and Micron. To
be successful, competitive and beneficial for all
network members, increased levels of
collaboration, commitment, information
transparency and trust are required. Very often,
business operational boundaries and operations
become blurred. Specifically, the last three
electronics companies share not only product
development plans, forecasts and replenishment
strategies, but they also have supplier personnel
working in their plants and participating in their
planning strategies. Micron Electronics, a $1.6bn
computer manufacturer based in Nampa, Idaho,
claims to have the most efficient supply chain in
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the computer industry. The improvements in its
supply chain over the last two years are attributed
to collaborative supply chain practices. The
numbers support this: Micron was producing#p#分頁標題#e#
2,100 computers a day in January 1998, while in
2002 this figure was 10,000-12,000 a day. Product
lead times have dropped from as high as 21 days to
below five days. In 1998, Micron carried $130.7
million in inventory, whereas today, it carriers $17
million. This has been achieved through close
relationships with suppliers, especially Modus
Media, which specialises in providing procurement
and technology. The level of collaboration is high.
For example, Modus employees work in Micron’s
plant, and attend meetings with Micron’s
sourcing, manufacturing and marketing teams.
Modus employees replenish Micron’s assembly
plant and take part in new product launch
meetings. This level of resource sharing allows for
quick response and drives down costs for both
companies. Gordon (2000) provides more
information about this case study.
Cisco is also an excellent example of a company
that has exploited the Internet to create a supply
chain community. Hartman and Sifonis (2000)
have described how Cisco achieved this and other
business goals by creating “Manufacturing
Connection Online” (MCO). MCO is a globally
networked manufacturing environment that
provides a central point of access for employees,
suppliers and logistics partners. It allowed Cisco to
reduce lead times, increase operational agility and
so move to a “pull”, make-to-order environment.
To differentiate itself from the competition in what
is essentially a commodity business, Cisco acquires
companies who have leading technology and then
integrates them rapidly within its systems. It also
sells network solutions, not just components, to its
customers. This requires the co-ordination of
hardware, software and service components in
many sales. The ability to provide these services
and integrate many new businesses is enabled by
Cisco’s single enterprise system. This system
provides the backbone for all activities in the
company by connecting not only customers and
employees, but also chip manufacturers,
components distributors, contract manufacturers,
logistics companies and systems integrators.
Consequently, these participants can perform like
one unified company because they all rely on the
same Web-based data sources. Moreover, all its
suppliers see the same demand and do not reply on
their own forecasts based on information flowing
from multiple points in the supply chain. Cisco’s
average turns for commodity items are even more
impressive, reaching 25-35 turns a year.
However, by analysing several case studies, Levi
and Levi (2002) demonstrated that although the
Internet can help companies move away from the
traditional “push” strategy employed by most#p#分頁標題#e#
supply chains, eventually many companies end up
with a hybrid strategy, i.e. a “push/pull” supply
chain. In a push-pull strategy, some stages of the
supply chain – typically the initial stages – are
operated in a push-based manner, while the
remaining stages are operated in a pull-based
strategy. The interface between the push-based
stages and the pull-based stages is referred to as the
push-pull boundary.
The book industry is a good example of the
push-pull strategy. When Amazon.com established
their supply chain, it was a pure “pull” system with
no warehouses and no stock, and Ingram Book
supplied most customer demand. Evidently,
Ingram Book can aggregate across many
distributors and take advantage of economies of
scale. Thus, the pull model employed by
Amazon.com was an appropriate strategy when
Amazon.com was building its brand name. As
volume and demand increased, two issues became
clear. First, Amazon.com’s service level was
affected by Ingram Book’s distribution capacity,
which was shared by many distributors, whereas
during periods of peak demand (e.g. Christmas),
Amazon.com could not meet its service level goals.
Second, by using Ingram Book in the first few
years, Amazon.com managed to avoid inventory
costs, but this significantly reduced profit margins.
As demand increased, it was evident that Ingram
Book did not provide any advantage for many ofthe book categories. This is also true because as
Amazon.com could aggregate across largegeographical areas, this allowed it to reduceuncertainties and hence inventory costs. As
Amazon.com discovered these problems the
company changed its philosophy, and now
Amazon.com has several warehouses around the
country where they keep stock of most of the titlesthey sell. Thus, inventory at the warehouse is
managed based on a push strategy founded onlong-term forecasts, while demand is satisfied
based on individual request (i.e. a pull strategy).
In the same vein, GM and Ford haveannounced that they are changing the way they aredesigning, building and selling their products.
Their challenge is to allow customers to customiseand order cars online, and have the car show up at
their door in less than ten days. Thus, GM and
Ford are moving in a pull-push strategy wherebyproduction is done based on a realised demand
(i.e. a pull strategy), while delivery is according to afixed schedule (i.e. a push strategy). Levi and Levi
(2002) claimed that the push part of the supplychain is applied to the portion of the supply chain
where long-term forecasts have small uncertaintyand variability (e.g. forecast of the level of car
E-volution of a supply chain: cases and best practices
Dimitris Folinas, Vicky Manthou, Marianna Sigala and Maro Vlachopoulou#p#分頁標題#e#
Internet Research
Volume 14 · Number 4 · 2004 · 274-283
281components). The aim was to minimise costs,while the pull part is applied to the portion of thesupply chain where uncertainty and variability arehigh (e.g. forecast of demand of particular types ofcars) and hence the focus is on matching supply
and demand and achieving customer service.
A further step whereby retailers and suppliersrecognise that sharing of information is not enoughis the strategy of collaborative planning,forecasting and replenishment (CPFR). CPFR is a
process by which supply chain partners coordinate
plans to better match supply anddemand. This strategy was first developed andimplemented successfully by Wal-Mart in
collaboration with Warner-Lambert in early 1995.
Pramataris (2002) described the use of CPFR atstore level (called the “process of collaborative
store ordering” or PCSO) in Greece by HellasSpar Veropoulos (the third largest grocery retailchain in Greece) and threesuppliers (Elgeka SA,Procter and Gamble Hellas, and Unilever Hellas).
CPFR has emerged as a highly sophisticatedbusiness practice which aims to ensure that there isalways enough quantity to meet consumer demandwhile maintaining optimum levels of stock acrossthe supply chain. The essence of CPRF is aboututilising technology capabilities and informationsharing to support trading partner interaction andcollaboration in meeting consumer demand.
Utilising the principles of CPFR, a retailer and aconsumer goods firm would work together jointlyto create a single, combined promotion calendar inadvance of the selling period. Both firms createsales and order forecasts, discrepancies orexceptions are identified, and appropriatemanagers are advised. The case study illustrated
that the pilot implementation of PCSO lead to a 53per cent decrease in out-of-shelf (OOS) situationsbetween pilot (4.3 per cent OOS) and control
stores (9.4 per cent OOS).Conclusions
Transforming the system of SCM into a viable ebusiness
strategy and model is critical to futuresuccess. In this paper, five dimensions (businessstrategy, partnership relationships, information/decision-making, technology and logisticsfunctions) were used to illustrate the evolution ofe-SCM and to classify several types of SCM. Basedon this analysis, a SCM evolution framework wasproposed and its implications for analysing currentsupply chain practices or identifying the specificrequirements of future developments wereillustrated through the discussion of several casesand best practices. Overall, it is demonstrated thatas companies come to realise the need for real-timeinformation systems and new business models, thebenefits derived from an integrated supply chainseem to overcome the latter’s implementationobstacles. Moreover, as organisations enter a newera of global competitiveness, e-SCM becomes atremendous catalyst for achieving and maintaininga competitive advantage by enhancing andfostering operational agility and lower coststructure, product/service differentiation,increased market share and profitability.#p#分頁標題#e#
The taxonomy of SCM practices identified andanalysed in the paper confirms the existence ofdifferent e-business strategies amongst companiesadopting Web-based solutions to integrate andrationalise their supply chains. However, it issuggested that future research efforts should bedirected towards a deeper analysis of therelationships between the relevant variables ofSCM evolution. Specifically, further researchshould be conducted to investigate whether thereis coherence between the e-business strategyadopted and the integration mechanisms usedacross the supply chain. In other words, thealignment between e-business and supply chainmanagement is worth investigating, particularlydue to the numerous failures of Internet initiativesand the increasing incorporation of e-businessmodels into business value networks. Furtherresearch is also required to identify any potentialeffects of contingent factors on the lower or higheradoption of e-SCM practices. However, to achievethe latter, large-scale cross-industry andlongitudinal research is needed. Finally, studies arealso required to measure and provide evidence ofthe benefits of e-business in SCM practices.
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