Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P23

154 Chapter 1.11 E-Com Supply Chain and SMEs Ron Craig Wilfrid Laurier University, Canada ABSTRACT This chapter considers the perspective of small and medium-sized enterprises (SMEs) in supply chains. It starts with an overview of the important role of SMEs in national and world economies. Following this is an overview of supply chains, information and communication technologies, and e-business. Both opportunities and challenges for supply chains in general and SMEs in particular are considered, and conclusions drawn. The ma-jor contribution of the chapter is in providing an extensive overview of the literature as it relates to information and communication technologies, supply chain management, and SMEs, providing researchers and practitioners with a starting point to look for further information as needed. INTRODUCTION This chapter presents a modest overview of the considerable literature covering supply chain management (SCM), information and commu-nication technologies (ICTs), e-commerce, and small and medium-sized enterprises (SMEs). The reviewed papers include the perspectives of all VL]HG¿UPV6LQFHODUJH¿UPVKDYHOHGLQ6&0DQG continue to do so, much can be learned from their H[SHULHQFHVDQGWKHLULQÀXHQFHRYHURWKHUFKDLQ members. The literature on SCM is vast, so only a few representative papers are reviewed. There is much less literature dealing with SMEs; hence this coverage is fuller. Readers are encouraged to go to the referenced articles for more information, and to future articles that cite these if the develop-ment of a particular area is of interest. Only in the past decade has the SME perspec-tive of SCM been seriously considered, with both theoretical and empirical research published. The SME SCM empirical literature now covers many individual countries, including Canada (Archer, Wang, & Kang, 2003; Canadian E-Business Initia-tive, 2004; Raymond, Bergeron, & Blili, 2005), Germany (Berlak & Weber, 2004), South Africa (Badenhorst-Weiss, Fourie, & Nel, 2004), Taiwan (Chou, Hsu, Yeh, & Ho, 2005; Wang, Chang, & Heng, 2004), the UK (Azumah, Koh, & Maguire, 2005; Levy & Powell, 2003; Tucker & Lafferty, 2004; Wynarczyk & Watson, 2005), and the United States (Arend & Wisner, 2005; Levenburg, 2005). International comparisons have been completed Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. E-Com Supply Chain and SMEs by a few researchers. Beck, Wigand, and Konig (2005) compared European countries (France, Germany, Denmark) and the United States. Johnston and Wright (2004) compared Canada, Mexico, China, and Japan. There is a slight bias in the literature towards manufacturing over RWKHUVHFWRUVVXFKDVUHWDLOZKROHVDOH¿QDQFH service) because manufacturing has historically controlled many supply chains. Today this control is shifting, with retailers (such as Wal-Mart) often KDYLQJJUHDWHUFKDLQLQÀXHQFH This chapter starts with a review of the role of SMEs in national and world economies, and then considers SCM in business today, including the major improvements facilitated by ICTs. Fol-lowing this, opportunities and challenges at both the general chain and SME levels are considered. Finally, conclusions are drawn and areas for future research suggested. SMEs in National and World Economy 7KHGH¿QLWLRQRIZKDWFRQVWLWXWHVDPLFURVPDOO or medium-sized business varies from country to country, and even between government de-partments and programs within a country. One common segmentation approach uses number of employeesmicro (or very small) businesses KDYLQJOHVVWKDQ¿YHHPSOR\HHVsmall businesses having 100 or fewer employees, and medium-sized ¿UPVKDYLQJHPSOR\HHV$YDULDWLRQRQ this would have the employee limit set at 250 for small businesses. Another segmentation method XVHVVDOHVYROXPHVDQGLVEDVHGRQWKHW\SHRI¿UP (such as manufacturing, wholesale, retail, service). In all cases, only independently owned and oper-DWHG¿UPVDUHLQFOXGHGLHVPDOOEUDQFKHVDQG subsidiaries of large businesses are excluded). ,Q &DQDGD VPDOO ¿UPV WKRVH ZLWK IHZHU than 100 employees) make up more than 97% of goods-producing employer businesses and almost 98% of all service-producing employer businesses (Industry Canada, 2005). For the U.S., VPDOO¿UPVUHSUHVHQWDERXWRIDOOHPSOR\HU ¿UPVHPSOR\KDOIRIWKHSULYDWHZRUNIRUFHKDYH generated 75% of the net new jobs added to the U.S. economy, represent 97% of all U.S. export-ers, and create more than 50% of the non-farm, private gross domestic product (U.S. Small Busi-ness Administration, 2006). At the start of 2004, within the UK, 99.9% of all enterprises were small (0 to 49 employees) or medium (50 to 249 employees), employing some 58.5% of the private sector workforce (some 12 million people), and contributing to more than 50% of the national GDP (Small Business Service, 2006). Within Europe (28 countries of the European Economic Area plus candidate countries to the European Union) in 2003 there were some 25.3 million non-primary private enterprises, of which 99.8% were craft or small and medium-sized (European Commission, 2006). In June 2004, 99 % of Australian employ-ing businesses were SMEs (Australian Bureau of 6WDWLVWLFVWKHLUGH¿QLWLRQRIDVPDOOEXVLQHVV is having less than 20 employees, with a medium-sized one having fewer than 200). And in Latin $PHULFDDQG$VLDDVPDQ\DVRIDOO¿UPV are SMEs (Johnston & Wright, 2004). With such a large number of SMEs, there are VLJQL¿FDQWGLIIHUHQFHVZKHQRQHORRNVDWWKLQJV OLNHSUR¿WDELOLW\LQGXVWU\VHFWRUVL]HDGRSWLRQ and use of ICTs, and so forth. Many studies look at SMEs as a group (sometimes segmenting by indus-WU\VHFWRUWKLVFDQPDVNVLJQL¿FDQWXQGHUO\LQJ differences. Similarly, looking at acceptance and use of new technology systems without consider-ing innovators, early and late adaptors can result LQµDYHUDJH¶UHVXOWVWKDWGRQRWUHÀHFWWKHIXOOUDQJH of experiences. An exception to this approach is Levenburg (2005), who compared IT adoption for PLFURVPDOODQGPHGLXPVL]HG¿UPV Typical advantages attributed to SMEs include being able to service small markets, having a quick reaction time to changes in market conditions ERWKRUJDQL]DWLRQDODQGPDQDJHULDOÀH[LELOLW\ innovativeness, closeness to their customers (with a trusting relationship), and a bias for action. On 155 E-Com Supply Chain and SMEs the negative side, SMEs usually are ‘resource SRRU¶LQWHUPVRI¿QDQFHVWLPHDQGH[SHUWLVH and generally lag in integration into the new e-economy. It is important to note that a small business is not simply a scaled-down version of a large business. We see that SMEs are very important to local and national economies, and hence to the world economy. As SMEs provide employment, create new jobs, and contribute to a country’s GDP, governments are naturally concerned about their well-being and vitality. Various programs exist at national and local levels to support SMEs. 7KHUH DUH SURJUDPV ZLWK WKH VSHFL¿F JRDO RI assisting SMEs to increase their use of e-com-merce and/or supply chain initiatives; examples of these follow. Role of SCM in Business Today Taylor’s (2004) supply chain management matrix, displayed in Figure 1, presents an illustration of several components of SCM. Rows in this matrix correspond to three different levels of management (design, planning, operations), while the columns list business processes concerned with supply, production, and demand. This matrix is for a single ¿UPLQWHURUJDQL]DWLRQDOQHWZRUNVDUHPXFKPRUH FRPSOH[DVWKHPDWUL[LVUHSHDWHGIRUHDFK¿UP in the overall network (from tiers of upstream suppliers to the ultimate downstream customer). (YHQDWWKH¿UPOHYHO6&0FDQEHYHU\FRPSOH[ Each of the component areas shown in Figure 1 has a well-established tradition with standard procedures and best practice approaches. SCM requires cooperation and coordination between these componentssomething that is much more common today than a few decades ago. Extending supply chain considerations externally to all the RWKHU¿UPVLQWKHHQWLUHQHWZRUNSUHVHQWVDPXFK more formidable challenge. Supply chains are on the corporate agenda WRGD\6KHI¿DQG0LFKHOPDQSRLQWRXWWKDW IBM’s sale of its PC business to Lenovo and the Figure 1. Supply chain management matrix (Source:Taylor, 2004) SUPPLY CHAIN MANAGEMENT MATRIX Supply Production Demand Product Design Supply Chain Design Materials Planning Purchasing Receiving Production Planning Inventory Management Production Control Distribution Planning Forecasting Sales Shipping 156 E-Com Supply Chain and SMEs merger of Procter & Gamble with Gillette were driven to a great extent by the supply chain success of major competitors (Dell and Wal-Mart, respec-WLYHO\7KH\VWDWH³LQDQHUDRIFRPPRGLWL]HG products, volatile markets, and expanding arenas of competition, supply chains are becoming one area where distinction is possible, powerful, and LQFUHDVLQJO\GLI¿FXOWWRUHSOLFDWH´ Many SCM authors (including Harrison & van Hoek, 2005; Lee & Wang, 2001; Patterson, Grimm, & Corsi, 2003; Taylor, 2004) identify the forces contributing towards the surge in SCM interest. These forces include: 1. They support, enhance, and are an integral SDUWRID¿UP¶VFRPSHWLWLYHEXVLQHVVVWUDWHJ\ (alignment). 2. They leverage a distinctive supply chain op-erating model to sustain competitiveness. 3. They execute well against a balanced set of operational performance objectives and metrics (measurement and feedback). 4. They focus on a few business practices that reinforce one another to support the oper-ating model and best achieve operational excellence. • Globalization • Technical innovation in ICTs • External pressure from other supply chain members, including higher expectations from customers • Outsourcing trends ‡ 3UHVVXUHVWRUHGXFHFRVWVDQGLQFUHDVHSUR¿WV Lapide points out that strategy and operations are closely linked and particularly important. He VWDWHV³$VXSSO\FKDLQWKDWGRHVQRWVXSSRUWWKH organization’s business strategy can never be excellent. And companies have to make adjust-ments to supply chains when strategy changes.” That SCM can be a powerful competitive weapon is demonstrated by Amazon, Dell, Wal-Mart, and RWKHUPDMRU¿UPV 7KHSRWHQWLDOEHQH¿WVRI6&0DQGe-SCM are frequently stated (e.g., Beach, 2004; Davenport & Brooks, 2004; Serve et al., 2002; Taylor, 2004), including: SCM strategies and tactics continue to improve DV¿UPVGHYHORSDEHWWHUXQGHUVWDQGLQJRIKRZ to manage the entire chain. Whereas a few years DJRDIDVWDQGFRVWHI¿FLHQWFKDLQSURYLGHGFRQ-siderable competitive advantage, this is changing • Eliminate delays and errors associated with traditional paper-based systems • Improve customer satisfaction (fewer stock-outs, paperwork savings) • Reduce supply chain costs • Improve record accuracy • Lower data entry costs (single point of entry) • Reduce inventory holdings (shorter lead times) • Increase inventory turns • Increase quality DVPRUH¿UPVDQGFKDLQVPDVWHUWKLV/HH points out that supply chains today need to be more than simply fast and cost effective. They need to be agile (responding quickly to sudden changes in supply or demand), adaptable (evolving over time as the environment and markets change), and aligned (with all chain member interests). Clearly SCM is of considerable interest to ODUJH¿UPV+RZHYHUKRZZHOOGRHV6&0¿WZLWK 60(V"%HIRUHFRQVLGHULQJWKLVZHZLOO¿UVWORRN at the role of information and communication MIT has a Supply Chain 2020 project underway (Lapide, 2005)a long-term research effort to identify and analyze the factors that are critical to the success of future supply chains. Initial re-VHDUFKKDVDOUHDG\LGHQWL¿HGIRXUFKDUDFWHULVWLFV of high-performing supply networks: technologies in the supply chain. ICTs, E-Business, and Supply Chains ,QIRUPDWLRQWHFKQRORJ\¿UVWWRRNRQDPDMRUUROHLQ manufacturing with the development of manufac- 157 E-Com Supply Chain and SMEs turing resource planning (MRP) systems several decades ago. Progress continued with MRP-II, enterprise resource planning (ERP) systems (or enterprise systemsESs), and advanced planning systems (APSs). With each advance there was increasing automation of repetitive, time-consum-ing tasks and improved integration of data and information used between functional areas of a GHSDUWPHQWRURUJDQL]DWLRQOHDGLQJWR¿UVWLQWUD and then inter-organizational data sharing. ICTs continue to have a major impact on busi-ness in general, and supply chains in particular. Technology allows the reduction or elimination of paperwork (with its attendant delays in trans-mission/reception and possible data corruption if information is re-entered). Both technologies and applications continue to evolve, with the ,QWHUQHW QRZ SURYLGLQJ DQ HI¿FLHQW HIIHFWLYH communication link for supply chain partners. The power of the Internet comes from its open standards and widespread availability, permitting easy, universal, secure access to a wide audience at very low cost. Figure 2. E-business application architecture (Source: Kalakota & Robinson, 2000) Business Partners Suppliers, Distributors, Resellers Supply Chain Management ENTERPRISE RESOURCE PLANNING Knowledge-Tone Applications Enterprise Applications Integration CUSTOMER RELATIONSHIP MANAGEMENT Selling Chain Management Customers, Resellers (Adapted from Kalakota & Robinson, 2000) 158 ... - tailieumienphi.vn