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INFORMATIONTECHNOLOGY ANDSCM 371With advances in information technologies over the past
decade, however, this pipe dream may actually become
reality.INFORMATION TECHNOLOGY
AND SCM
At the overall level, the broadest impact of information
technology on SCM is by enabling tighter connectivity be-
tween supply chain members. The time and distance gaps
that previously hampered information flows and supply
chain responsiveness are all but eradicated by the Inter-
net’s relative immediacy of access to existing information.
Keskinocak and Tayur (2001, p. 71) noted that the Inter-
net’s rapid communication, innovative trading spaces, ac-
cessibility of new distribution channels, and facility for
collaboration encourages supply chain managers the ra-
tionale for envisioning virtual integration as a reality. Ob-
viously, sharing of accurate information is essential for
collaboration. To this end, trading partners must have a
means to exchange information. The explosion of ERP
implementations in the 1990s “dramatically improved the
quantity and quality of data” that could be used for effec-
tive SCM (Sodhi, 2001, p. 56). Current information tech-
nologies such as enterprise applications, on-line auctions,
e-markets, and web-based services provide gears that sup-
ply chain managers can shift to tailor the sequence of
paths taken by the chain to best move its product(s).Enabling Collaboration
ERP systems, offered by firms such as SAP and Ora-
cle, provide the basic functionality of visibility and track-
ing on which tighter connectivity is executed. For exam-
ple, through Web interfaces, customers and suppliers can
place orders to the firm or provide replenishment informa-
tion for the firm. The ERP system pulls this information
from a database and compiles an enterprisewide view that
provides order status information for customers, gener-
ates shipping orders to suppliers, and inventory positions
to APS applications offered by SAP, Oracle, i2 Technolo-
gies, Manugistics, and others.
APS provides planning and execution functionality,
and these products have become more focused and refined
to keep pace with empowered customers seeking efficien-
cies through collaboration (Harreld, 2001). More special-
ized SCM applications for supply management generally
are execution or planning focused. For example Sears,
Roebuck & Company and its major appliance suppli-
ers use a SeeCommerce execution focused application to
manage supply chain performance. This application pulls
data from transactional purchasing and quality assurance
systems to generate real-time performance metrics that
are visible to each supplier. This allows Sears and its appli-
ance vendors to address problems proactively before they
become unwieldy. Alternatively, a planning focused SCM
application by SynQuest is used by Ford Motor Company
to optimize auto part delivery costs in a just-in-time envi-
ronment. This software models Ford’s myriad of inbound
logistics and evaluates several variables to determine the
best movement of inbound parts. As a result of this imple-
mentation, missing parts errors have improved 100-fold.Application service providers (ASP) play a key role in
information-enabled supply chain coordination and col-
laboration by providing Web-based focused solutions for
tactical planning. The standardization of data largely due
to the adoption of XML (extensible markup language)
allows disparate ERP and ASP applications to transact.
ASPs provide small supply chain members with small
budgets an avenue to tighter connectivity. In additional
to B2B portal provision, ASPs provide value to their
customers by providing software applications, access to
hardware, or consulting services to allow customers to
outsource some or all of their IT functions effectively.
Standardization efforts through the CPFR Committee
strive to foster effective SCM via the internet. Further-
more, interoperability of applications across the supply
chain appears more viable with Web services platforms
such as Microsoft.NET.Auctions and Exchanges
Major ERP vendors also provide products that enable
firms to create online auctions. The time and financial
resources spent developing and organizing an auction
are significant overhead expenses. Therefore, industry
partnerships or third parties host many auctions and
e-markets. B2B (e.g., Covisint) and B2C (e.g., Onsale) ex-
changes are dramatically changing the manner in which
supply chain activities are being structured. The underly-
ing structure of these exchanges is built around an auc-
tion mechanism. In general, an auction can be viewed as
a way for sellers to obtain information on the reservation
prices of potential customers in the market for a particu-
lar product. The implementation of auctions on the Web
provides a guarantee for consumers in terms of price ef-
ficiencies and simultaneously helps to match buyers and
sellers.Electronic End Demand Fulfillment
With ever-increasing consumer demands for customiza-
tion and competition, and ever-decreasing product life
cycles, SCM has gravitated toward a sense and respond
approach. Sodhi (2001) provided the following examples
of Internet enabled demand fulfillment processes:Design
The data regarding end-consumer-preferred product at-
tributes can be gathered quickly and efficiently through
Web surveys. Designers can also collaborate and plan
product launch particulars via the Internet to speed up
time to market.Customer-Relationship Management
Data collected from navigational paths of individual Web
site visitors can be used to predict purchasing behavior,
which can lead to better forecasts and inventory decisions
for e-businesses. For example, collaborative filtering soft-
ware compiles profiles based on customers browsing or
purchasing behavior to fit them into a market segment.
Based on this real-time classification, advertisements are
displayed to entice initial or further purchases. Collabo-
rative filtering is one method of personalization. Person-
alization attempts to modify Web site offerings to match