the supply chain management essay

the supply chain management essay

The Evolving Role of Technology in Supply Chain Management

1. Introduction to Supply Chain Management

2) To explore efficient and effective methods and strategies for supply chain management, common themes and diversified trends in transportation and logistics, management science, economics, and even computer science are analyzed first. In this paper, we establish the framework for supply chain management and mainly focus on a highlighted topic in this area, i.e., the small shipment transportation within supply chains. Rapid moves in information technology in the past decade have significantly enhanced information and data management. Information systems and their applications that are rich and assuming have now become increasingly available, enabling businesses to do things that were unthinkable just a few years ago. With such a revolution, a new supply chain model—e-business—is developed and applied successfully.

1) In this paper, we review research in both pure and applied fields of science to develop a deeper understanding and a repository of application outcomes in the multidisciplinary field of supply chain management. Supply chain management is becoming more complex, and a myriad of choices face those who aim to exploit internal strengths or external opportunities to reduce cost. As a common topic between transportation and e-business, supply chain management has always been one of the most active research areas in both the academic and practitioners’ perspectives and plays an increasingly critical role in modern businesses. Supply chain management is the integrated management model for a group of enterprises based on the market to satisfy the final customer.

2. Technological Innovations in Supply Chain Management

For technological innovation to be utilized and integrated into current supply chain processes and activities, there has to be a clear business rationale behind the adoption of such technology. Technology adoption and diffusion in business is influenced by the extent to which the technology has been proven, the characteristics of the adopter, and the rate at which the technology diffuses. The main reason for the reluctance shown by businesses in adopting new information technologies is the risk associated with their subsequent implementation. Information technologies are unpredictable and have been responsible for many negative outcomes due to the changes required to business operations or processes, errors in system design, software errors, continuous upgrades and maintenance, and extra expenses due to unexpected problems that occur after implementation. Therefore, sound business logic must be the controlling factor behind the decision to implement IT in supply chain management. Instant pressures, such as the ability to order online, are no longer the main driver behind initial IT investment as the focus shifts to less complex supply chain activities, including products or services that are not within the companies’ core competencies.

The technological innovations applied to supply chain management (SCM) have the potential to increase operational efficiency, cost effectiveness, information effectiveness, and consequently, service levels and profitability. These innovations provide the feedback loop that allows a supply chain to constantly learn from its environment and adjust dynamically to the changes that take place. This would provide a competitive advantage by improving reaction times and enabling true optimization that is capable of achieving the highest possible operational performance. These technological changes further reduce supply chain costs and increase profitability, as they provide the mechanisms for process automation, which incur a lower overall cost and remove the need for human intervention. Understandably, the decision to modify and implement technological innovation in the supply chain is complex and involves numerous challenges.

3. Challenges and Opportunities in Implementing Technology in Supply Chains

In this section, I review the challenges and opportunities associated with implementing technology in the supply chain. The barrier is that companies believe that they can manage and analyze their supply chains by traditional methods and do not realize the need to invest in technology to enhance productivity. Experience suggests that the promised investment returns can often be underestimated and underutilized. The overwhelming opportunities are that supply chain managers can enhance their knowledge and skills as they must respond to a forecast of continuing large outlays for technology purchases. This can lead to the frustration of selecting the wrong vendor as they try to determine the appropriate supplier of technology. The integration of diverse and non-unified organizational entities is difficult, and this organizational challenge is broadly recognized. Finally, as a result of their use of technology, supply chain professionals are required to perform more strategic tasks. The transition to higher skill and experience requirements creates a real opportunity for career advancement and significant financial and work satisfaction rewards for young industry entrants.

How to implement and integrate new technology and applications of existing technology is the biggest challenge faced by supply chain managers as they strive to meet ever-increasing customer service expectations at ever-decreasing costs. However, overcoming these obstacles will enable supply chains to evolve to a new level of proficiency. Seven characteristics provide a framework for managers to address such critical issues as the dollars and other resources needed to make the necessary investments, the evaluation of new and improved technologies that so often arrive at their doors, the organizational changes they must be prepared to make in the use of technology, the selection of vendor partners, the plan for and management of the switch from one technology to another, and the challenges of supply chain organization and control.

4. Case Studies and Best Practices in Technology-Driven Supply Chain Management

We conclude that actual practices of technology-driven supply chain management are diverse and rely predominantly on practical constraints. While the lateral flow of materials has been widely recognized as crucial in active demand chain and efficient supply chain management, the management of the horizontal flow of information has been underemphasized. The diversity seen in supply chain practices in nine cases of the five categories signals an emerging landscape of supply chain management. Although much research attention has been paid to supply chain management technology development and applications, the existing literature has offered only limited insights. We believe that the common theme that emphasizes the “pure” business models or performance measurements should be abandoned since it neither supports nor reflects reality. Heterogeneity and the pure nature of the problem calls for an empirical approach. This empirical focus tends to be an area in which normative business models have very little to say, despite their potential theoretical insights. With very few notable exceptions, most of the business models and uses of technology for supply chain management in the current practitioner segment operate in the framework of a given supply chain.

This chapter presents nine case studies and practices from different industries in technology-driven supply chain management (SCM). We first review two joint technology-driven business models, “Linking Suppliers” and “Linking Customers”. In the latter part, we study supply chain practices in four different categories, each of which represents a different type of supply chain information sharing. Examples include cautious sharing among competitors, sharing through third-party infrastructure, and sharing with external service providers. For each category, detailed case studies and discussions are presented to reveal the critical issues, best practices, and performance measurements in technology-driven supply chain management.

5. Future Trends and Implications for the Industry

To establish these cooperative service explosion frameworks within the business service vortex, it is essential to utilize a common enterprise facade for accessing process, service, and logistics partnerships, which allows for reduction of the disparity of the technology assets needed to support the various targeted applications, provides an opportunity to share the associated critical asset development costs, and minimizes the technology risk factors. Additionally, organizations must form alliances and initiate activities designed to encourage investment of sufficient capital in the IT industry segment infrastructures that provide the MIT application development tools, process and service management tools, and IT business process services assistants to expand the industry service capacity required for supporting process-based marketplace solutions through one or more economic entities. It will be mutually beneficial for corporations in a particular industry segment to collectively create the MIT marketplace for services they require and utilize the process marketplace for services that generate customer and provider value-in-operation within this segment.

The third trend that bodes well for the future addresses the considerable challenge to exploit imperative external capabilities while you have them without acquiring them. The capability vortex provides the marketplace important options through process-embedded business service partnerships for those organizations who provide no process value add and have no desire to provide such services. It also provides a process-based solution framework for providers of value-added services who strive to improve industry performance, and for key industry segments. We anticipate a hybrid paradigm to eventually emerge from the vortex. We see emerging opportunities for accelerated exploitation (starbursts) of three principal MIT-enabled business service models: (1) The ventral mass – array of MIT-based service providers targeting the process management requirements of the particular industry segment; MIT-based corporate business services; and (3) MIT implantation and administration of key logistical COTS tools and related high-value services. Introducing a modern information technology architecture, network, MIT brokerage services, and collaborationware into this intersection creates others’ process service explosions gleaned from key process service management decision support and board-operating experience.

The second trend is an equally aggressive migration to services. Modern Information Technology (MIT) architectures exemplify the benefits to be derived. With proven enterprise level process and workflow capabilities now available as business process automation services, in addition to maps and network connectivity, some of the historic major barriers to leveraging external services have been removed. This business process service vortex epitomizes many of the core values of MIT through the establishment of modular, reusable component-based solutions that are service-enriched and content-sensitive. This, in turn, enables timely, collaborative problem solving through the aggregation of multiple capabilities.

The future trends in technology development and implementation in supply chain management are evolving around several key themes. First concerns the aggressive shift toward multi-channel/service oriented architectures. This shift is being driven by the perpetual desire to achieve breakthrough cost reduction and expanded capability through the reuse and combination of components/services, and the desirability to rapidly evolve business processes and relationships by incorporating the latest and best material/logical capabilities from the service provider marketplace. Core focus is moving from the physical infrastructure and transactions and workflow processing capabilities to enterprise service-oriented capabilities that include maps and cross-enterprise decision support.