Industry-wide Supply Chain Information Integration: The lack of Management and Disjoint Economic Responsibility

Industry-wide Supply Chain Information Integration: The lack of Management and Disjoint Economic Responsibility

Stefan Henningsson (Centre for Applied Information and Communication Technology, Copenhagen Business School, Denmark) and Jonas Hedman (Centre for Applied Information and Communication Technology, Copenhagen Business School, Denmark)
DOI: 10.4018/978-1-4666-0918-1.ch006
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Experiences from enterprise-wide integration initiatives during more than four decades indicate that industry-wide information integration could render substantial benefits. Two ways in which industry-wide integration differs from enterprise-wide integration are that there is no common management level and the economic units in the integration are the constituent units, not the industry. Management involvement has been emphasized as perhaps the most critical success factor for enterprise-wide information integration. The common economic unit enables increased costs in one part of the organization to lower the total cost in the company as a whole. In this article the authors address which consequence these two differences have for the development of information integration in four industry-wide supply chains. The authors find the existing methods for enterprise-wide information integration, such as BPR, virtually impossible to apply on industry-wide information integration and that the disjoint economic responsibility is a hampering aspect in reaching potential benefits of industry-wide information integration.
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If management commitment is the most critical success factor, what then if there is no management level? After companies have become integrated in their internal information flows there is also a need to address information integration across organizational borders in industries. During the last decades, organizational boundaries have been blurred and technological innovations have introduced the alternative of integrating business with partners higher up or further down in the value chain. This type of integration is in many aspects different from integration that takes place inside an organization, not at least because of the absence of a higher managerial force. Industries with their cross-organizational spanning supply chains have no orchestrating function, something that could make existing integration and business process reengineering methodologies inadequate. In addition, experience from intra-organizational information integration tells that frequently what in the end becomes an efficiency gain for the organization as a whole may impose an increased burden on the single business unit – the factor of asynchronous efficiency gains (c.f. Hedman & Kalling, 2003). Asynchronous gains are possible to enforce since the organization act as one single economic unit, but this is not the case for industries which have disjoint economic responsibility.

Much is written on information integration in intra-organizational value chains and how to make it work efficiently (e.g. Alsene, 1999; Karuppan & Karuppan, 2008; Konsynski, 1993). Similarly much research has been directed towards two-part integration with inter-organizational systems (IOS) and electronic data-interchange (EDI) in Business-to-Business (B2B) and Business-to-Government (B2G) relationships (e.g. Henriksen, 2006; Krcmar, Bjørn-Andersen & O'Callaghan, 1995; Lim & Palvia Prashant, 2001; Masetti & Zmud, 1996; White, Daniel, & Mohdzain, 2005). Less is, however, known about the industry-wide value chain with focus on the whole chain from initial producers to end consumers (Browne, Sockett & Wortmann, 1995; Konsynski, 1993). The industry-wide context introduces issues of inter-organizational collaboration among several actors, an increased multitude of IS, organizational cultures and organizational objectives. Although the technical challenges of information integration may be similar regardless of intra- or inter-organizational context, the organizational and managerial challenges in industry-wide information integration needs special attention as they presents a different integration context (Neureuther & Kenyon, 2008).

This article answers to an explicit call for research by Pant, Sethi and Bhandari (2003) in which they state that “there is a need to revisit intra-organizational change management theories to ascertain if they will as effectively apply to inter-organizational or supply chain-wide change.” We do so by addressing the question which consequences the lack of management level to orchestrate the process and the disjoint economic responsibility has on development of industry-wide information integration. Our general purpose is thus to provide new knowledge on information integration in industry-wide supply chains. Our contributions to this purpose are several. We both theoretically and empirically explore two contextual circumstances to information integration in industries: the lack of common management unit and the factor of asynchronous gains. In this process we also describe and explain the existing information integration, and the lack of integration, in one particular industry – the Swedish agri-food industry. Finally, we also contribute with ideas of processes and factors that would lead to increased integration in industry-wide supply chains.

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Editorial Advisory Board
Table of Contents
John Wang, Bin Zhou
Chapter 1
Susan A. Sherer
Although many companies have implemented ERP systems to track and share information across cross functional business processes, they often... Sample PDF
Enterprise Applications for Supply Chain Management
Chapter 2
Sreekumar, Debendra Kumar Mahalik, Gokulananda Patel
The increasing rate of technology growth has resulted in decrease in cost of information. These technologies are helpful in coordinating the... Sample PDF
Information Technology Implementation Prioritization in Supply Chain: An Integrated Multi Criteria Decision Making Approach
Chapter 3
Rebecca Angeles
In this study, the author examines organizations’ perceptions of the importance of absorptive capacity attributes in the deployment of radio... Sample PDF
Moderated Multiple Regression of Absorptive Capacity Attributes and Deployment Outcomes: The Importance of RFID IT Infrastructure Integration and Supply Chain Process Integration
Chapter 4
George. Kenyon, Brian D. Neureuther
Historically, the growth of the beef industry has been hampered by various entities, i.e., breeders, cow-calf producers, stockers, backgrounders... Sample PDF
A Comparison of Information Technology Usage across Supply Chains: A Comparison of the U.S. Beef Industry and the U.S. Food Industry
Chapter 5
Mickey Howard, Richard Vidgen, Philip Powell
Amid the turmoil of the current economic crisis, the wild expectations for business-to-business electronic marketplaces or ‘e-hubs’ as... Sample PDF
Strategies for E-Procurement: Auto Industry Hubs Re-Examined
Chapter 6
Stefan Henningsson, Jonas Hedman
Experiences from enterprise-wide integration initiatives during more than four decades indicate that industry-wide information integration could... Sample PDF
Industry-wide Supply Chain Information Integration: The lack of Management and Disjoint Economic Responsibility
Chapter 7
Kenneth Saban, John Mawhinney
Supply chain performance is often equated with acquiring the best technology or process. However, current studies suggest that supply chain... Sample PDF
The Strategic Role of Human Collaboration in Supply Chain Management
Chapter 8
Frank Wolf, Lee Pickler
This paper examines how supply chain conflicts across domestic and international jurisdictions arise and become resolved given that conventional... Sample PDF
Supply Chain Dispute Resolution: A Delphi Study
Chapter 9
Stephan Zelewski, Malte L Peters
In this paper, the authors address the distribution of efficiency gains among partially autonomous supply network actors in a manner they will... Sample PDF
Fair Distribution of Efficiency Gains in Supply Networks from a Cooperative Game Theory Point of View
Chapter 10
Yohanes Kristianto
This paper studies duopolistic competition under dynamic price and production quantity postponement for two differentiable products, which share... Sample PDF
Dynamic Price and Quantity Postponement Strategies
Chapter 11
Seong-Hyun Nam, Hisashi Kurata, John Vitton, Jaesun Park
Manufacturers in a high-tech durable product industry may have to make operational decisions in the presence of uncertainties associated with... Sample PDF
Determining Optimal Price and Order Quantity Under the Uncertainty in Demand and Supplier’s Wholesale Price
Chapter 12
Ibrahim Al Kattan, Taha Al Khudairi
This paper employs a simulation model in a Supply Chain Management (SCM) system. This study is one of the first to present simulation model of... Sample PDF
Simulation of Inventory Control System in a Supply Chain Using RFID
Chapter 13
N. Anbazhagan, B. Vigneshwaran
This article examines a two commodity substitutable inventory system—two different brands of super computers under continuous review. The demand... Sample PDF
Two-Commodity Markovian Inventory System with Set of Reorders
Chapter 14
Reza Farzipoor Saen
The use of Data Envelopment Analysis (DEA) in many fields is based on total flexibility of the weights. However, the problem of allowing total... Sample PDF
A New Look at Selecting Third-Party Reverse Logistics Providers
Chapter 15
Bjørnar Aas, Stein W. Wallace
Logistics problems are gradually becoming more complex and a better understanding of logistics management as a subject is a key to deal with the new... Sample PDF
Management of Logistics Planning
Chapter 16
Duangpun Kritchanchai, Albert Wee Kwan Tan, Peter Hosie
Third Party Logistics (3PL) in Asia emerged as an important trend in logistical management and Thailand continues to develop in this service... Sample PDF
An Empirical Investigation of Third Party Logistics Providers in Thailand: Barriers, Motivation and Usage of Information Technologies
Chapter 17
Dimitris Folinas, Ioannis Manikas
In this paper, the deliverables of a research project are presented, which aims at the development of a web-based platform capable of supporting the... Sample PDF
Design and Development of an e-Platform for Supporting Liquid Food Supply Chain Monitoring and Traceability
Chapter 18
Mark Gershon, Jagadeesh Rajashekhar
Supply chains are assessed for the contribution they make in improving business processes. Assessment also looks at the return on investment and... Sample PDF
A Composite Method to Compare Countries to Ascertain Supply Chain Success: Case of USA and India
Chapter 19
Firat Kart, Louise E. Moser, P. Michael Melliar-Smith
The MIDAS system is an automated supply chain management system that enables customers, manufacturers, and suppliers to cooperate over the Internet.... Sample PDF
An Automated Supply Chain Management System and Its Performance Evaluation
Chapter 20
Reza Saen, Mark Gershon
Supplier selection is the process by which suppliers are reviewed, evaluated, and chosen to become part of a company’s supply chain. To select the... Sample PDF
Supplier Selection by the Pair of AR-NF-IDEA Models
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