E-Business Supply Chains Drivers, Metrics, and ERP Integration

E-Business Supply Chains Drivers, Metrics, and ERP Integration

Jean C. Essila (Northern Michigan University, USA)
Copyright: © 2018 |Pages: 12
DOI: 10.4018/978-1-5225-2255-3.ch464
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Abstract

The world of business is witnessing the emergence of electronic supply chains (e-SC). As more business is performed via the Internet, e-SCs are becoming an integral part of supply chain management SCM). With business via the Internet requiring different fulfillment approaches, traditional drivers of regular supply chains are no longer adequate for explaining how e-SC performance is driven. The task of SC professionals is more complicated than ever. This situation often leads to unsatisfied customers, which can force companies to close their doors. Therefore, understanding e-SCM performance drivers and their integration with ERP becomes a necessity. Little attention has been devoted to SCM performance driver evaluation. This article discusses the performance drivers of e-SCs and their integration with ERPs. SCM is among the most important factors to organizational success. Effective SCM can enhance competitiveness and increase profitability. Nevertheless, SCM professionals and other actors must understand the factors that undergird driver performance.
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Introduction

The world of business is witnessing the emergence of electronic supply chains (e-SC or e-supply chain). The Internet has radically changed the nature of supply chains at its core (Sambasivan, Mohamed, & Nandan, 2009). In fact, as more business is performed via the Internet, e-SCs are becoming an integral part of supply chain management (SCM; Gunasekaran, Patel, & Tirtiroglu, 2001; Sambasivan et al., 2009). Businesses are becoming supply chain-sensitive organizations. With business via the Internet requiring different fulfillment approaches, traditional drivers of regular supply chains are no longer adequate for explaining how and to what extent e-SC performance is driven (Sambasivan et al., 2009). E-commerce offers consumers more buying options than traditional business. Buyers can instantly compare prices, product attributes, and delivery parameters. As a result, customers have become increasingly demanding. The task of supply chain professionals is more complicated than ever because e-SCs rely on ERP software. This situation often leads to unsatisfied customers, which can force companies to close their doors.

SCM is responsible for ensuring that customer needs are satisfied in a cost-effective manner. To do this, they formulate strategies, allocate resources, organize activities, and assess performance. Effective and efficient SCM resource allocation is contingent upon a proper understanding and interpretation of its performance drivers (Stock & Boyer, 2009). However, managers often operate on the basis of their own experience and commonly-used methodologies that do not always result in the desired level of performance. Therefore, a framework to leverage actual drivers of e-SC performance is needed (Caputo, Cucchiella, Fratoccchi, Pelagagge, & Scacchia, 2004).

In fact, e-SCs involve partners that are linked by Internet technology in broad networks where customers, retailers, distributors, manufacturers, and suppliers are connected (Fliedner, 2003; Lightfoot, & Harris, 2003; Williams, Esper, & Ozment, 2002). Within and across the networks, actors collect, process, store, and disseminate information on materials, goods, funds, and services. e-SCs are composed of many-to-many connections, while relationships in traditional supply chains are characterized by one-to-one connections. A dramatic revision of current SCM techniques is needed (Caputo et al., 2004). Therefore, understanding e-SCM performance drivers and their integration with ERP becomes a necessity for any SCM professional. Based on the literature survey, little attention has been devoted to SCM performance driver evaluation despite the high volume of ongoing research in the field (Gunasekaran et al., 2001; Sambasivan et al., 2009).

This article discusses the performance drivers of eSCs, metrics for measuring efficiency, and their integration with ERPs. Considering the fact that e-SCs are becoming an integral part of the extended enterprise (Sambasivan et al., 2009), the first section of this article introduces a model of the traditional supply chain for both manufacturing and service systems. In addition, it assesses the logistical and cross-functional performance drivers of supply chains (Chopra & Meindel, 2010; Olver, Lant, Plant, Majeste, & Kursh, 2010). The section concludes with a brief comparison between physical product and information flow.

The second section examines e-SC structures and performance metrics for capturing and gauging system effectiveness and efficiency. It also explains the corresponding measures for the implementation of each metric. It should be noted that e-SC metrics and their corresponding measures are effective ways for managers to ensure that the supply chain is achieving the expected benefits (Riggins & Mitra, 2001).

Key Terms in this Chapter

Logistics Protocol: Sequence in which logistics activities are to be performed according to specific mathematical models.

Supply Chain Facilities: Operating units (such as factories), storage facilities (such as warehouses), processing centers, distributions centers, and even offices since information is manipulated to trigger, move, and track products and services within and throughout the supply chain.

Logistics: That part of SCM responsible for moving materials, funds, information, and services from the point of origin to the point of consumption.

Strategy: Set of actions designed and employed to achieve goals.

Logistics Capacities: This includes physical assets, such as buildings, plants, factories, manufacturing centers, processing centers, distribution centers, and warehouses, utilities, human resources, computers, cars, trucks, trains, aircrafts, ships, materials and goods, and supporting information.

Supporting Facility: Supply chain facility necessary before a service can be provided (i.e., hospitals building, classrooms, airplanes, etc.)

Logistics Capabilities: Ability to employ logistics capacities to achieve the desired level of responsiveness at the lowest cost possible.

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