The role of emergent information technologies and systems in enabling supply chain agility

Abstract

In many markets it is becoming impossible to remove or ignore sources of turbulence and volatility. Hence, supply chain managers must accept uncertainty, but still need to develop a strategy that enables them to match supply and demand at an acceptable cost. The ability to achieve this has been termed supply chain agility. Information and, importantly, agile information systems have been recognised as being a critical factor in achieving agility in the supply chain.

To date studies have suggested that high levels of coordination between organisations, necessary for improved supply chain performance, demand high levels of integration between partners’ information systems. However, these high levels of integration reduce the ability to frequently and rapidly make changes to trading relationships, something that is a prerequisite of the agility paradigm. This paper seeks to explore how a number of emergent information systems offer the possibility of both deep integration and increased flexibility. This paper is exploratory in nature. A single case study of an organisation seeking to improve supply chain agility is reported. Existing literature and the insights provided by the case study are combined to identify a number of themes for further study.

Introduction

Organisations in a diverse range of markets are facing the challenges of new product innovations, decreasing product lifecycles, product proliferation and customers who are becoming ever more demanding. This has resulted in markets that can be characterised as increasingly turbulent and volatile (Brown & Eisenhardt, 1998) and has caused many organisations to seek to improve their supply chain through activity termed supply chain management (Christopher, 1998; Cooper & Ellram, 1993; Mentzer et al., 2001). The operation of an appropriate and effective supply chain is now a vital part of competitive performance in all types of markets (Subramani, 2004).

To date, most supply chain management activities have sought to remove or reduce the uncertainty within a supply chain as far as possible, in order to facilitate a more predictable response to changes in downstream demand (Mason-Jones, Naylor, & Towill, 2000). However, in many underlying markets it is becoming impossible to remove or ignore sources of turbulence and volatility. Hence, managers of supply chains are faced with the situation where they have to accept uncertainty, but where they still need to develop a strategy that enables them to match supply and demand. The ability to manage such turbulence, in a manner that responds to customer requirements but at an acceptable cost, has been termed supply chain agility (Christopher, 2000). Recognising that market turbulence is unlikely to abate, developing an agile supply chain is now a major focus of many leading organisations (Fisher, 1997).

Whilst a number of diverse prerequisites have been identified for achieving supply chain agility including; management commitment, organisational and supply chain design and information sharing both within and between organisations (Bal, Wilding, & Gundry, 1999; Crocitto & Youseff, 2003), the use of effective information systems has been identified as a key enabler of supply chain agility (Garcia-Dastugue & Lambert, 2003). As described by Breu, Hemingway, Strathern, and Bridger (2001), “information systems are seen to assume a fundamental role in developing agility, as the notions of speed and flexibility would be inconceivable without them”. Over the last decade many companies have invested in large integrated information systems, such as enterprise resource planning (ERP) and customer relationship management (CRM) systems in order to improve, inter alia, their supply chain operations (Akkermans, Bogerd, Yucesan, & van Wassenhove, 2003; Davenport & Brooks, 2004). However, whilst the deployment of such systems may have improved the efficiency and effectiveness within their own organisation, the diverse nature of these systems has often reduced the ability to form electronic linkages with trading partners (Crowe, 1992; Davenport, 2000). In contrast, an important part of the agility paradigm is the ability to form deeply integrated links with a wide range of trading partners and be able to quickly dissolve these and reform such deep linkages with new partners as required by changing market conditions.

To counter the recent focus on internal information systems, it is forecast that over the coming decade emphasis will shift from the individual firm to improving collaboration between organisations (Hagel & Seely Brown, 2001). However, this improved collaboration must allow for the increased agility in the supply chain that organisations are seeking. A number of recent developments in information systems and technology (IS/IT), if used effectively, appear to promise the ability to significantly improve the collaboration between trading partners in ways that can increase agility. This paper seeks to explore the use of such emergent information systems in enabling supply chain agility. Due to the emergent nature of these developments, this paper is exploratory in nature and its intention is to encourage further study of this domain. A single case study of an organisation that is seeking to improve the agility of its supply chain is undertaken. Existing literature from the inter-organisational (IOS) domain and the insights provided by the case study are combined to identify a set of themes that can frame future studies.

This study will be of interest to both supply chain and information systems managers who are seeking means to improve the agility of their supply chains. The synthesis of the most recent thinking in the supply chain management domain, with emergent developments in information systems, will also make this paper of interest to academics from both of these fields, together with academics from other fields interested in the improvement of inter-organisational relationships (IOR).

The paper commences with a discussion of supply chain agility. The role of information systems in the supply chain is then discussed. The case study is then presented and the insights from this, together with existing literature from the IOS domain, are used to identify a number of themes that could provide the basis of future studies.