The role of emergent information technologies and systems in enabling supply chain agility
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.
Section snippets
Agility in the supply chain
The concept of agility within organisations originated within the function of manufacturing and with the concept of flexible manufacturing systems (Bennett, Forrester, & Hassard, 1992; Parthasarthy & Prakash, 1992). Agile manufacturing can be viewed as the antithesis of the characteristics that came to define manufacturing during most of the 20th Century: rationalisation, standardisation and the elimination of uncertainty (Womack, Jones, & Roos, 1990). In many industries today, the
IS/IT in the supply chain
The extant literature addressing the development and use of IOS is considerable (for example; Angeles, Corritore, & Basu, 2001; Bytheway & Dhillon, 1996; Holland, 1995; Webster, 1995; Williams, 1997). It is therefore not possible to give a full review of this.
Hong (2002) defines IOS as “the information and communications technology that transcends organisational boundaries”, continuing on to say that IOS “function to blur the boundaries of today's organisations as they enable information to
Methodology
The objective of the current study was to explore the potential of new information technologies and systems in enabling supply chain agility. This early stage exploration, together with existing literature from the IOS domain, would be used to frame a set of research themes that can be used to guide future studies in this domain.
The current study seeks to explore a new domain and from this exploration commence the process of theory generation. This suggests the use of inductive, qualitative
The case of IBM integrated supply chain division
IBM is a global leader in the development and manufacture of information technologies, which include computer systems, software, networking systems, storage devices and microelectronics. IBM had annual revenues in 2003 of $89bn, of which $43bn was from IT services, $28bn from hardware, $14.3bn from software and $3bn rental and financing. It has 319,000 employees in 170 countries and its head offices are located in New York State.
Discussion of case study findings: Themes for future research
Whilst case study research does not seek to be representative, the case undertaken suggests a number of interesting themes that deserve further investigation.
Summary
Many organisations are recognising that increased volatility and turbulence are becoming standard characteristics of their underlying markets. Developing an agile supply chain that allows such organisations to meet the variations in demand at an acceptable level of cost is now a major focus of many leading organisations (Christopher & Towill, 2002a; Fisher, 1997; Mason-Jones et al., 2000). Van Hoek, Harrison, & Christopher (2001) identify four components of supply chain agility: customer
Dr. Andrew White B.Sc., M.Sc., Eng.D is a Senior Research Fellow at Cranfield School of Management. His research interests are in the twin areas of the impact of information technology on business-to-business relationships, and the management of innovation. He is currently working on a number of research projects that examine the role of information systems in creating an agile supply chain. This includes technologies and services such as Electronic Marketplaces/Hubs, Web Services, RFID, and
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Dr. Andrew White B.Sc., M.Sc., Eng.D is a Senior Research Fellow at Cranfield School of Management. His research interests are in the twin areas of the impact of information technology on business-to-business relationships, and the management of innovation. He is currently working on a number of research projects that examine the role of information systems in creating an agile supply chain. This includes technologies and services such as Electronic Marketplaces/Hubs, Web Services, RFID, and Business Process Management Tools. He is also conducting research into the management of innovation, particularly discontinuous innovation, and innovation at the level of inter-organisational relationships and networks.
Professor Elizabeth Daniel B.Sc., Ph.D., MBA is Professor of Information Management at the Open University Business School where she undertakes research and teaching in the fields of e-business and information systems. She has published a significant number of papers on these subjects in leading academic journals and a number of management reports. Prior to joining the OU, Elizabeth was a member of the Information Systems Research Centre at Cranfield School of Management. She has a first degree and Ph.D. in Physics and an MBA from London Business School.
Dr. Mohdzaher Mohdzain B.Sc., M.Sc., Ph.D. is a Research Fellow at Cranfield School of Management. Zaher's research focuses on information systems strategy in large organisations. He is currently conducting a research project on the role of emergent information systems in enabling supply chain agility, and another on programme management. Prior to joining Cranfield, Zaher first worked in an accounting firm, and later a commercial bank, before he started his academic career as a university lecturer. Zaher has a B.Sc. in Accounting and M.Sc. in Management Information Systems from Northern Illinois University, USA, and Ph.D. in Information Systems from Cranfield.