Exploring the Impact of Globalization and Technology on Supply Chain Management: A Case of International E-Commerce Business

Introduction

Globalization is described by the European Commission as a phenomenon that different countries’ markets and productions are significantly interdependent due to dynamics in trades; and the fast-developing technology has cleared the geographical barriers (Wahab, 2004). Globalization and technology are argued to be the forces driving the management change in supply chain (Johnson, 2006), and it has created a new economy environment (Totonchi & Manshady, 2012). The globalization and technology are complementary to each other and interactively deciding each other’s destination and together drive the direction of global supply chains. Now, the emerging of a new business model - e-business/e-commerce, which is a description of a wide range of online activities for products and activities, is an outstanding product as a result from these two major social economic trends (Rosen, 2000, cited by Totonchi & Manshady, 2012). Perfect competition in today’s global markets and the heightened expectations of customers bounded business enterprises to explore the factors affecting supply chain performance (Singh, Sandhu, Metri & Ghera, 2014).

Though from the economic perspective that e-business/e-commerce has become one of the fastest growing sectors, the globalization and technology has brought the operations of supply chain into a new era and the consensus customers’ acceptance of online shopping is not concluded (Ashraf, Narongsak & Seigyoung, 2014). Additionally, the pace of technology development is so fast that it is possible every half a year there might be something new appears and available in the market. Therefore, it is difficult to anticipate how the e-business/e-commerce as the most favor of the global supply chain model will trend. The authors aim to hold a critical position to understand how globalization and technology as two key drivers impact the e-business/e-commerce.

Just as the same as the industrial revolution and the expansion of the West in the 19^th century which have led to a brand new path in the development of human society, globalization outlines the contemporary patterns and yet brings the social activities to another new era. Political, economic and technological changes are the three main leading elements that are interrelated with globalization and lead to a new transformation of the Supply Chain Management Model (SCM) (Held et al., 1999). Typically, technology is identified as one of the key competitive advantages in SCM. In addition to that, technology contributes a significant level of value in distinguishing a modern supply chain from a traditional supply chain (Ketchen et al. 2008, cited by Marinagi, Trivellas & Sakas, 2014). The evolution of Information Communication Technology (ICT) is the key element that triggers the supply chain integration (Marinagi et al., 2014). The three forms of integration, i.e., internal, supplier, and customer integration have emerged as important elements of the supply chain (Maiga, 2016). The Internet and its impact is an outstanding example. The use of the Internet has significantly increased in the past two decades (Ashraf et al., 2014). As the high penetration of the Internet is dramatically influencing the consumer’s behavior, so as the demand pattern; a new concept as applying the ‘digitization’ in operations is introduced to the SCM.