Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P22 pptx

144
Integrating E-Supply Networks
munication and collaboration, and customer
services (Blascovich & Goffre, 2003; Donovan
n.d; Phan, 2003).
7KHVH³HEXVLQHVV´DSSOLFDWLRQVDUHDOUHDG\
being introduced into supply chain manage-
ment–primarily as a collaborative use of Internet
technology to enable integration of value and
supply chains with key partners, by supporting
business processes to improve speed, agility, real-
time control, and customer satisfaction (Jelassi &
Leenen, 2003). This is done largely through the
use of computer and communication networks to
transfer information electronically. Porter (2001)
a r g u e s t h a t t h e m a i n a d v a n t a g e s t o a n o r g a n i s a t i o n
LVKRZHEXVLQHVVLVGHSOR\HGWREHQH¿WIURPWKH
advantages of Internet technology, rather than
whether it is deployed. There is consensus amongst
academics and practitioners that the success of
an e-business enabled supply chain depends on
two major factors:
• Collaboration between partners (Norris,
Hurley, Hartley, Dunleavy, & Balls, 2000)
and integration of supply chains through
linking information systems (Cigolini,
Cozzi, & Perona, 2004; Zank & Vokurka
(2003), which is also seen as a major source
of competitive advantage;
• Information visibility (Garcia-Dastugue &
Lambert 2003; Kehoe et al., 1998) includ-

ing the ability to share accurate data and
information from a wide range of operating
areas across the supply network (Lancioni,
Smith, & Oliva, 2000).
6XSSO\FKDLQVDUHFXUUHQWO\LQDVWDWHRIÀX[
where they must be able to manage the complex-
LW\RIVWDNHKROGHUVDQGÀRZVRILQIRUPDWLRQDQG
materials throughout, while still maintain their
³OHDJLOH´ RSWLPLVHG GHVLJQV 1D\ORU 1DLP 
Berry, 1999). Croom (2001, 2005) has suggested
the existence of a staged evolutionary process
in the adoption of supply chain strategies in
relation to e-business systems, beginning with
customer facing processes, followed by internal
(operations) processes, supplier-facing processes,
DQG¿QDOO\WRWDOFKDLQLQWHJUDWLRQ7KLVYLVLRQLV
supported by other academics and practitioners
+DQG¿HOGHWDO3RLUHUQGZKRVHHWKH
supply chain of the near future as a synchronised
ÀRZRIPDWHULDOVDQGLQIRUPDW LRQWKURXJKDI XOO\
networked virtual business. This incorporates all
the companies in the supply chain where not only
are internal processes linked with customers and
suppliers, but the whole value chain would be
networked end-to-end, managed through creat-
ing value, and all stakeholders are in a win-win
position. Modularisation is another trend that
supply chains are experiencing where there is
³YDOXHVKLIWLQJ´DVV\VWHPVDUHEHLQJLQWHJUDWHG
into smaller subsystems that can function alone

or as a part of the network (Doran, 2003). Ke-
hoe et al. (2001b) suggest the need for a supply
chain resource planning approach where Internet
technologies will enable supply chain partners
to dynamically view and manage both demand
and capacity data to create supply Webs. There
is however little empirical research into the type
and degree of integration that is taking place and
how this can be measured in order to evaluate the
LPSDFWRQLQIRUPDWLRQÀRZVDQGUHODWLRQVKLSV
between and within supply network partners.
The Importance of Information Flows
One of the critical foundations of supply networks
LVLQIRUPDWLRQÀRZV7KLVLVHYHQPRUHFULWLFDO
in integrated networks where physical material
supply chains are being replaced by a network of
information servers distributed across organisa-
tions. Gadde et al. (2001) see the exchange of
LQIRUPDWLRQSOD\LQJDVLJQL¿FDQWUROHLQFUHDWLQJ
QHWZRUN HI¿FLHQFLHV ZKHUH HI¿FLHQW LQIRUPD-
WLRQÀRZVDUHSUHUHTXLVLWHVIRUFRRUGLQDWLRQRI
activities in a network and for the exchange of
information needed for resource development.
1RWRQO\HI¿FLHQWÀRZVRILQIRUPDWLRQEXWDOVR
³LQIRUPDWLRQHQULFKHG´VXSSO\FKDLQVZKHUHWKH
145
Integrating E-Supply Networks
information systems are carefully engineered to
PDWFK WKH VSHFL¿F VXSSO\ FKDLQ UHTXLUHPHQWV
For example, in an information enriched supply

chain, all stakeholders receive marketplace data
directly increasing transparency, reducing distor-
WLRQ DQG DYRLGLQJ GRXEOH JXHVVLQJ ³:KHUHDV
information enriched concept is highly desirable
in lean supply, it is obligatory in the achievement
of agile supply. It is only when effective market-
place feedback is available that the next deliveries
can be pulled from the supplier” (Mason-Jones
& Towill, 2000, p. 55). The more accurate and
WLPHO\WKHLQIRUPDWLRQÀRZWKHPRUHUHVSRQVLYH
companies are to changes in demand (Wallace et
al., 2006). Also direct knowledge of end demand
through the supply chain is a way to reduce both
inventory levels and the bullwhip effect (Cigolini
et al., 2004; Wallace et al., 2006)
However an exploration of the information
ÀRZVWKDWOLQNDOOWKHVXSSO\FKDLQPHPEHUV±7LHU
1,2, 3 suppliers as well as the manufacturer,
customer, and consumer/end-consumer–have not
been fully researched and needs further investiga-
tion (Garcia-Dastugue et al., 2003).
Integration, Technology
Infrastructures, and Supply Chains
Many current organisational supply chains are en-
trenched with manual processes and disconnected
enterprise systems. Both Forrester Research and
$E H U G H H Q * U R X S I R X Q G Q R V L J Q L ¿F D Q W L Q W H J U D W L R Q V 
between manufacturers and their suppliers’ and
customers’ enterprise systems with the majority
being driven by manual, spreadsheet-intensive,

only partially automated processes largely de-
pendent upon different software systems within
their own companies (Wailgum, 2006). Integrated
,7LQIUDVWUXFWXUHVHQDEOH¿UPVWRGHYHORSD
higher-order capability of supply chain process
LQWHJUDWLRQ 7KLV FDSDELOLW\ ³HQDEOHV ¿UPV WR
XQEXQGOHLQIRU PDWLRQÀRZVIURPSK\VLFDOÀRZV
and to share information with their supply chain
partners to create information-based approaches
for superior demand planning, for the staging and
movement of physical products, and for stream-
OLQLQJYROXPLQRXVDQGFRPSOH[¿QDQFLDOZRUN
processes” (Rai, Patnayakuni, & Patnayakuni,
2006, p. 227). Currently there is no universally
accepted and widely implemented standardisation
of technological architecture and applications
across supply networks: for example the use
of XML, middleware, Internet technology, the
role of e-marketplaces and electronic auctions
(Tassabehji et al., 2006a,b; Wallace et al., 2006).
If the technology is to be fully exploited, there is
a need for standardisation and developing Internet
HQDEOHG³FRPPRQV\VWHPVLQIUDVWUXFWXUH´.HKRH
et al., 2001a) to remove the problem of systems
integration.
DISCUSSION
From the literature review, it can be ascertained
that the main gaps in the research are a typology
of e-business as it relates to supply networks,
a deeper understanding of what integration is,

its linkage with e-business, and its impact on
supply networks, and a wider examination of
LQIRUPDWLRQ ÀRZV WKURXJK WKH VXSSO\ QHWZRUN
in order to classify information according to a
set of criteria, which will make it better support
the needs and requirements of all the members
in the supply network.
An ideal test bed for this kind of research is the
process industry. The process industry sector is
extremely important and one that is estimated to
grow at an average of around 4% per annum until
2010 (staff 2003) based on the projections of de-
mand from process industry products and services
worldwide. Pharmaceuticals is estimated to be the
fasted growing process industry with the trend
in highly industrialised countries towards more
SURGXFWLYHPRUHHI¿FLHQWPRUHÀH[LEOHSODQWV
which increase availability and environmental
sustainability but are less resource intensive. As
such, supply chain management and the Internet
146
Integrating E-Supply Networks
based tools that facilitate this management is a
critical part of these strategies.
Towards a Standardised Approach to
Integrated Supply Chains:
Recommendations
7KHLVVXHVSUHYLRXVO\LGHQWL¿HGFDQEHGLYLGHG
into three major parts. These are not mutually
exclusive and there is a strong degree of conceptual

overlap where information for all three stages can
be sought at one interaction with stakeholders.
Stage 1: Develop a Typology of
E-Business Technology and
Applications Infrastructure in Support of
Information Flow in Supply Chains
The internet has improved inter-organisational
information systems’ capability and is being
adopted as a routine platform for information
systems development, with Web services, wireless
applications, and advanced software applications
all being used to facilitate supply chain col-
laboration (Ho & Lin, 2004; Kehoe et al., 2001a;
Mondragon, Lyons, Michaelides, & Kehoe, 2006).
+RZHYHUWKHUHLVQRH[DFWGH¿QLWLRQRI,QWHUQHW
based commerce (Soliman & Youssef 2003).
7KXVWKHUHLVDQHHGWRLGHQWLI\³HEXVLQHVV´
technology and how it is used in the organisation’s
business supply and value processes including
the use of electronic marketplaces and electronic
auctions. The information will then be analysed
WRGHYHORSDW\SRORJ\RI³HEXVLQHVV´DFFRUGLQJ
to the technology and applications used within
the supply chain. This can eventually be used as
a benchmarking tool and bring standardisation to
the area. Figure 1 presents a taxonomy of relevant
hardware and software, and their application
in an e-supply network that we posit should be
standardised.
E-commerce is currently seen as a technol-

RJ\¿WUDWKHUWKDQDUHODWLRQVKLSWRROEXWWKLVZLOO
change (Ruppel, 2006). In the future, collabora-
tive product commerce (CPC), a set of tools that
allows companies to manage product informa-
tion and share it with suppliers and partners
through the Web, is expected to co-ordinate and
control virtually all supply, manufacturing and
customer-relationship processes supported by an
e-based infrastructure backbone (Mondragon et
al., 2006).
Thus, there is a need to establish this com-
mon e-based infrastructure backbone to ensure
interoperability and standardisation to support
LQIRUPDWLRQ ÀRZV 6ROLPDQ HW DO  0RQ-
dragon et al. 2006). There are already attempts
to develop standardised Web-based platforms.
For instance, the Web Services Interoperability
Organisation (WS-I) which is a consortium of
the top companies in the industry such as HP,
Microsoft, IBM, ORACLE, and Intel, aims to
promote interoperability among Web services
based on providing Web services developers
Z LW K F R P P R Q  L Q G X V W U \  D F F H S W H G G H ¿ Q L W L R Q V  D Q G 
related extendible mark-up language standards
support. This however is voluntary and is still in
the early stages of development. Other industry
standards like operating frequencies for RFIDs
or UDDI (universal description, discovery, and
integration) platform independent business reg-
istries for Web services are needed to ensure

the widespread utilisation of these technologies
(Mondragon et al., 2006).
In the standardisation process, there is also a
need to incorporate other business related factors
in the application. Mondragon et al. (2006), look-
LQJVSHFL¿FDOO\DWWKHDXWRPRWLYHPDQXIDFWXULQJ
sector, highlight the importance and reliance of
sophisticated business models, such as supplier
parks and full-service-vehicle supply, on the use
RI:HEEDVHGLQIRUPDWLRQV\VWHPVWRIXO¿OWKH
build-to-order strategy.
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of e-marketplaces, which are sales and purchasing
operations conducted over a common e-enabled
platform, are critical to the management of their
application and adoption. They use criteria such
147
Integrating E-Supply Networks
as ownership/structure, product/market type
and required functionality for e-marketplace
FODVVL¿FDWLRQ
In a study of three supply chain management
technologies (group decision support systems,
EDI, and the Internet for electronic marketing
(e-commerce)), each was found to improve infor-
PDWLRQÀRZVDORQJWKHVXSSO\FKDLQWKHPDMRU
criteria for success was the perceived needs of
the users with respect to the implementation of
the respective technology (Ruppel, 2006). Thus
managers cannot expect to be able to implement

all SCM technologies/tools in the same manner,
as different factors affect the adoption and use of
different technologies.
From this, the typology and infrastructure we
recommend needs to incorporate factors related
to user needs such as degree of trust, cost, secu-
rity, business strategies, objectives and business
models. In the e-platform that is recommended in
Figure 1, we have incorporated the already rapid
growth of demand of online purchasing software
from suppliers, and included the software that is
and will be required to move beyond e-commerce
and achieve e-supply networks. The importance
of tools enabling sales and operational planning,
lean operations, and VMI and CPFR has already
EHHQLGHQWL¿HGDVEHLQJFULWLFDOWRWKHVXFFHVVRI
e-supply networks and need to be a part of the
technological infrastructure (Friscia et al., 2004).
It is the tools plus the connectivity that is of criti-
cal importance and these have been incorporated
in our e-platform.
Stage 2: Determine the Degree of
Integration Between Supply Network
Partners
Although e-supply chain management is in its
academic infancy, there are many well established
software packages that have been implemented
in business. AMR Research list 25 major global
companies led by DELL, Nokia, and Procter and
Figure 1. Standardising hardware and software in an E-supply network

WEB BASED E-PLATFORM
•Barcodes
•Integration platform networks (such as XML)
•RFID tags have antenna and chip containing an
electronic product code that includes more
information than a regular bar code (e.g. when and
where the item was made, components source, time of
expiry etc).
•Wireless devices (e.g.PDA)
•Neural Technology
•Grid Technology
•Security infrastructure (e.g. PKI)
•Global Information Systems
•E-mail
•Workflow systems and tools (use set of software
programmes that automate almost any information
processing e.g. document management)
•Groupware and other collaborative tools (VOIP web
conferencing)
•Internet enabled EDI
•ERP
•Vendor Managed Inventory (VMI)
•Collaborative Planning forecasting and
replenishment (CPFR)
•Advanced planning and scheduling (APS)
•Adaptive Inventory Management
•E-marketplaces
Hardware & Software
•E-procurement: requisitioning;
sourcing; contracting; ordering;

payment
•SC monitoring and control (use of
RFID)
•Inventory management (wireless
devices to enter inventory item
counts; XML infrastructure)
•Collaborative planning (sharing
info via the net; dynamic data
exchange; B2B workflows across
multiple enterprises over the net
•E-logistics (spot buying of
trucking capacity (internet based
freight auctions)
•Collaborative product
development
•Business Models
•Business Strategies and
Objectives
Application in the
Supply Chain/Network
148
Integrating E-Supply Networks
Gamble (Friscia et al., 2004) that have achieved
success with supply chains, not only by enhanc-
LQJSURFHVVÀRZVEXWDOVRE\FUHDWLQJDSODWIRUP
on which suppliers, producers, distributors, and
retailers can coordinate a response to the demand
signal from customers. These SCM tools require
a high level of integration and organisations must
match the operational needs of these tools to the

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can see that the technology has advanced exten-
sively, but there is still much greater potential for
its growth, development and maturity (Ruppel,
2006). With standardisation will come more and
easier integration with the right partners.
Soliman et al. (2003) present a model of
Internet based e-commerce in manufacturing
where they emphasise the need for integration
with internal and external processes already in
place in the organisation. This is a challenging
process involving a major re-engineering exercise
accompanied by resistance to change.
There is a need to determine the strategic level
RILQWHJUDWLRQRIV\VWHPVDQGLQIRUPDWLRQÀRZV
and how effective they are in terms of achieving
supply chain objectives. Evaluation of integra-
tion would also be made at an operational level
examining systems and network diagrams as
well as access; control; and permissions listings.
One of the ways in which the degree of integra-
tion between supply network partners is to be
determined, is to assess the importance of each
respective partner in the process. There are already
tools for sorecarding supplier portfolios that help
manufacturers determine whether their suppliers
are performing well on an individual basis (Hoch-
man, 2007). This could be extended to include
an assessment of the level of critical importance
each supplier in the value chain/network.

Developing such supply chain integration
strategies for competitive advantage however
requires a new organisational mindset. It will be
a real challenge for successful supply chain play-
ers to understand the dynamics of power of their
own position and other players in their industry
enough, to be able to develop an open culture
that will enable integration and close interaction
with other supply chain partners. This kind of
partnering, if achieved, can bring about mutual
EHQH¿WV DQG LQWURGXFH SHUIRUPDQFH PHDVXUHV
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of integrating information systems with other
supply partners.
Stage 3: Examine Information Nodes
Across the Supply Network and
Identify Criteria for Classifying
Information Flows
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of information within and between organisations
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cesses (Krovi, Chandra, & Rajagopalan, 2003).
The methodological approach to this part of the
research is based on systems thinking, with a
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though the e-business enabled supply chain us-
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LG H QW L ¿F D W L R Q RIL Q I R U P D W L R Q Q R G H V Z K H U H W K H Y D O X H 
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capable of altering the properties of information

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the information content, the importance to deci-
sion making and the e-business infrastructure or
technology infrastructure on which it relies. Tsaih
and Lin (2006) identify two kinds of informa-
tion processing infrastructures in a value chain:
contact points where information is processed
and the corresponding business task is carried
out and information channels which carry the
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can be divided into these two functional criteria.
The role of the contact points and information
channels also change dynamically where the
information recipient could be both a decider
and a communicator of information (Titus &
Brochner, 2005).
7KHELGLUHFWLRQDOLQIRUPDWLRQÀRZVQHHGWR
be analysed with the partner’s capacity to handle
149
Integrating E-Supply Networks
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The quality, timeliness, and cost effectiveness of
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HI¿FLHQF\7LWXVHWDO&DL-XQDQG<DQJ
(2006) found that norms of Internet information
sharing are positively associated with three key
dimensions of Internet communication: formality
(formal rules to effectively manage and control
WKHLU,QWHUQHWFRPPXQLFDWLRQÀRZVIUHTXHQF\
and diversity of information. Other suggested

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include:
•
Velocity: The speed of information arriving
at a node.
•
Viscosity:7KHGHJUHHRIFRQÀLFWDWWKHQRGH
where there might be contradictory informa-
tion components (this can potentially cause
the bullwhip effect in supply chains).
•
Volatility: Uncertainty about the content,
format, or timing of information.
•
Density: The number of intermediate nodes
involved in the information processing chan-
nel.
Each of the participants in the supply network
has a large number of needs to a) request b) ag-
JUHJDWHF¿OWHULQIRUPDWLRQIURPGLIIHUHQWDQG
multiple sources. All these factors will be a starting
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Supply chains are no longer internal, but
are multi-tiered, multi-echeloned with different
FRQ¿JXUDWLRQVDWHDFKOHYHOZLWKPXOWLSOHSOD\HUV
and multiple supply chains—internal or exter-
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LGHQWL¿HG9DQGHU9HOGH0HLMHUQDPHO\
internal supply chains, external supply chains, and
total supply chains. Information can similarly be

structured into three major categories:
• Firstly macro-environmental informa
-
tion—factors that impact on the macro-en-
vironment of the whole supply network—for
example, political, legal, social, economic,
and technological factors.
• Secondly meso-environmental informa
-
WLRQ²LQGXVWU\ VSHFL¿F IDFWRUV²IRU H[-
ample, new technological/or innovative de-
velopments in the industry, new competitors,
RULQGXVWU\RUVHFWRUVSHFL¿FLQIRUPDWLRQ
• Thirdly micro-environmental factors—fac
-
WRUVWKDWLPSDFWRQWKH¿UPLWVHOIIRUH[DPSOH
internal systems, credit control policies, and
training and skills development.
3DUWRIWKHLQIRUPDWLRQFODVVL¿FDWLRQSURFHVV
would also need to include identifying the type
of information each supply network partner feels
is necessary to supply chain management and
then to classify that information according to its
importance in achieving organisational objectives,
decision making, progressing processes within
the e-business enabled supply chain.
It is clear from current research in the literature
that there are serious issues of trust and power in
the use of e-business, particularly in the use of
e-auctions and references therein and so issues

RIWUXVWPXVWDOVREHLQFOXGHGLQWKHFODVVL¿FDWLRQ
of information which will likely impact informa-
WLRQÀRZV3DUWQHUVLQWKHVXSSO\QHWZRUNPXVW
also classify information according to the level
of trust with partners they are prepared to share
information.
The information gathered at this stage would be
D Q D O\ V H G W R G H Y H OR S D Q L Q I R U P D W LR Q À RZ F K D U W W K D W 
clearly marks the source of the information, the
type of information (internally generated/external
report), its criticality, its speed of accumulation,
relevance, and importance to supply networks
PHPEHUV SRWHQWLDO IRU FRQÀLFWLQJ VRXUFHV RI
information, format and timing, sensitivity and
willingness to share the information. The crite-
ULD IRUFODVVL¿FDWLRQKDYH EHHQ VXPPDULVHG LQ
Table 1.
From this, a framework or series of frameworks
can be developed to support the management of
LQIRUPDWLRQÀRZVDFURVVVXSSO\QHWZRUNV7KLV
150
Integrating E-Supply Networks
DSSURDFKZRXOGEHFRQVLVWHQWZLWKWKH³VXSSO\
chain resource planning” suggested by Kehoe et
al. (2001a,b).
CONCLUSION
The literature review conducted here revealed
a dearth of theory building based on empirical
research. The majority of the research was mainly
descriptive and highlighted the importance of

LQIRUPDWLRQÀRZVLQGHYHORSLQJHVXSSO\FKDLQV
DQGQHWZRUNV7KLVLVFRQVLVWHQWZLWKWKH¿QGLQJV
of Gimenez and Laurenco (2004) who found that
LQIRUPDWLRQÀRZVZDVRQHRIWKHPDLQHVXSSO\
chain topics being dealt with in the Operations
Management literature. They also found that the
most used methodology by these researchers was
descriptive. More empirical research needs to be
conducted to study the impact of the Internet on
several e-supply chain management processes.
From this literature review, we argued the
QHFHVVLW\ RI VWDQGDUGLVLQJ LQIRUPDWLRQ ÀRZ LQ
supply chains to facilitate integration, legality, se-
FXULW\DQGHI¿FLHQF\RIRSHUDWLRQV$WKUHHVWDJH
framework that can achieve this standardisation
was developed, and incorporates:
a. Consolidating the different constituents of
e-business and developing a typology of
technology and applications infrastructure
to enable supply network partners to bench-
mark themselves against each other accord-
ing to an explicit set of e-business criteria.
This will enable closer standardisation and
integration of systems throughout the sup-
ply network, which will facilitate further
RSHUDWLRQDOHI¿FLHQFLHV
b. Determining the degree of integration be
-
tween and across supply network partners in
order to evaluate the impact on information

ÀRZVDQGHI ¿FLHQFLHVLQWKHVXSSO\FKDLQDV
a whole according to the degree and type of
integration. By being able to classify integra-
tion of supply network partners, it will be
easier to highlight bottlenecks and potential
problems throughout the network.
c. Identifying information nodes across the
supply network in order to examine and
FODVVLI\LQIRUPDWLRQÀRZVWKDWSDVVWKURXJK
them according to a number of criteria that
ZLOOLPSURYHHI¿FLHQF\OHDQQHVVDQGDJLO-
ity of the network as a whole and reduce
problems such as the bullwhip effect.
The information resulting from this approach
can then be used in future research to model
e-business enabled supply chains and optimise
the impact of Internet technology and types of
LQIRUPDWLRQÀRZVWRFUHDWHUREXVWUHOLDEOHDJLOH
and lean value networks.
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This work was previously published in Information Technology Entrepreneurship and Innovation, edited by F. Zhao, pp. 177-
188, copyright 2008 by Information Science Reference (an imprint of IGI Global).