Academic journal article Advances in Management

Role of Responsiveness and Process Integration in Supply Chain Coordination

Academic journal article Advances in Management

Role of Responsiveness and Process Integration in Supply Chain Coordination

Article excerpt

Abstract

In today's business, much of the source of competitive advantage of the firm lies in its ability to effectively manage its supply chain. Supply chains have to be responsive - ability to respond to sudden or immediate changes in the marketplace. A host of independent business processes that form part of the supply chain, have to be seamlessly integrated to aid responsiveness. The level of responsiveness and the degree of process integration depend on how well the activities of the chain members are coordinated. Despite being interdependent, there is little or no research that studies the role of responsiveness and process integration in supply chain coordination. This research intends to address this issue. An illustration from an industrial equipment manufacturing industry is shown to understand the role of responsiveness and process integration in supply chain coordination.

Keywords: Responsiveness, Supply Chain, Heavy Industrial Equipment.

Introduction

In the context of present business scenario, much of the competitive advantage of a firm lies in its ability to respond to sudden or immediate changes in the marketplace. The ability to respond, or responsiveness4'12'27, not only depends on the internal dimensions of the firm but its scope lies within the network of players operating in the supply chain20'27.

A host of independent business processes seamlessly linked together form the supply chain. To achieve responsiveness, these business processes need to be managed and integrated. This in general terms is called process integration5.

The level of responsiveness and the degree of process integration depend on how well the activities of the chain members are coordinated. This would mean coordination of materials, processes, information, knowledge, funds and returns9. The level of responsiveness also affects the degree of coordination of the chain29. For example, a higher level of responsiveness will require more information sharing among chain members, better movement of materials etc. Thus, there is a bi-directional relationship between chain responsiveness and coordination. A well-coordinated chain ultimately leads to improved chain performance14.

Despite being interdependent, there is little or no research that studies the role of responsiveness and process integration in supply chain coordination. This research intends to address this issue. The purpose of this paper is to study: (a) the role of responsiveness in supply chain coordination, (b) the role of process integration in supply chain coordination and (c) how process integration affects responsiveness. We present an integrative framework relating chain responsiveness, process integration, supply chain coordination and performance. Such a study is more relevant in today's context where one of the primary challenges of chain managers is to ensure timely flow of goods and services in the wake of rising competition, product innovations and imitations, natural calamities and geo-political disturbances.

A responsiveness framework

Performance of the chain depends on how effectively the functions of the chain members are coordinated. This, in turn, is dependent on the level of responsiveness of the chain and vice versa. This is depicted in the responsiveness framework of figure 1.

Supply chain performance

Chain performance needs to be measured to test for any variance and to find the reasons thereof. There are various perspectives to such measurement - qualitative and quantitative3; cost and non-cost10; with strategic, operational and tactical focus10; processes in the supply chain they relate to11 and measures based on the supply chain operations reference (SCOR) model22. Examples of some measures are: distribution cost, inventory obsolescence cost, time to manufacture, number of on-time deliveries, fill rate, backorder probability, stock out probability, reduction in number of backorders, reduction in number of late orders, ability to respond to and accommodate poor supplier performance etc. …

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