IT Deployment Assessment: A Two-Dimensional Supply Chain Life-Cycle Management Framework for Strategic Analysis
Dyck, Harold, Gordon, Linda C., Kung, David, Communications of the IIMA
Depending on geographic location, there are many industries globally that face the difficult situation of competitive and, at times, limited growth. This is especially true in the US and Europe where population growth is rather stagnated and many industries have reached their mature stage (Anonymous, 2001). With competitive and investor pressure, it becomes imperative for these industries to transform themselves so as to be in position for the coming years (Kopczak & Johnson, 2003; Lewis, 2000). With pricing and volume growth as limiting factors, these businesses are increasingly focused on exploring opportunities to re-invent themselves and further streamline their supply chains in order to generate additional value for investors (Lewis, 2000). Competitively driven global businesses are swiftly capitalizing on the value of forging strong corporate alliances that achieve optimal operational efficiencies and relationships with suppliers and customers along agile supply chains. The result is synergistic mutual competitive advantages for the re-aligned participants in a synchronized supply chain as in Figure 1 (Fingar, 2000). Competencies and strategies are based in applications of information technology to achieve operational improvements and collaborative alliances that will lead to product re-design reconfiguration of the supply chain and optimization of manufacturing and logistics costs (Fingar, 2000; Mockler, 2000; Narayanan & Raman, 2004).
[FIGURE 1 OMITTED]
Throughout the 80s, 90s, and beyond, with increasing global competitive pressure, many businesses survived by recognizing the value of operational efficiency. Often time corporate strategies were focused on issues such as quality of product and customer service levels. Internal operating cost was of utmost importance. Such efforts led to successful business organizations that not only had a clear vision of the future direction of their respective industry, but were also streamlined and operationally lean. With relentless pressure by global competitors and consumers during the 90s, leading organizations recognized the need to further distance themselves from competitors. dominating firm that essentially had the ability to facilitate various changes within the industry. The focus became the synchronization of the respective supply chain with this firm as the leading coordinator. Over the past forty years, this dominating position has shifted from manufacturers to the retailers. With this balance of power change come the need to re-focus and assess the strategies of each industry and its corresponding supply chain (Kopczak & Johnson, 2003; Mockler, 2001).
Generally, there are two tool sets that can be deployed to synchronize the supply chain. One tool set being the implementation of information technology such as RFID, WiMax, and e-commerce (Lewis, 2000). As an example, the implementation of on-line ordering system in the airline industry has reduced transaction cost by up to 80%. Another tool set is for the analysis and improvement of operations functions such as manufacturing, inventory management, procurement, and logistics. For example, the recent implementation of the continuous replenishment concept coupled with the inventory aggregation effect has transformed various retailing businesses to the lowest cycle inventory level and highest inventory turnovers in history (Homer & Thompson, 2003). But this tool set is infeasible without the use of information technology to provide the visibility of materials and information exchange for inter-organizational synchronization. It is often the combination of these two tool sets that provide organizations with the optimal level of value generation (Mockler, 2001).
The intent of this research effort is to present a two-dimensional supply chain life-cycle management framework that can be implemented by industries to analyze the potential deployment of information technology strategically (Fingar, 2000). …