The Impact of E-Business on Supply Chain Integration

Abstract

Over the past decade a combination of economic, technology and market forces has compelled companies to examine and reinvent their supply chain strategies. Some of these forces include the globalization of businesses, the proliferation of product variety, increasing complexity of supply networks, and the shortening of the product life cycles. To stay competitive, enlightened companies have strived to achieve greater ,. coordination and collaboration among supply chain partners in an approach called "supply chain integration. "Information technology, and in particular, the Internet, play a key role in furthering the goals of supply chain integration. While the most visible manifestation of the Internet has been in the emergence of electronic commerce as a new retail channel, it is likely that the Internet will have an even more profound impact on business-to-business interaction, especially in the area of supply chain integration. The Internet can redefine how back-end operations - product design and development, procurement, production, inventory, distribution, after-sales service support, and even marketing - are 'conducted, and in the process alter the roles and relationships of various parties,fostering new supply networks, services and business models. The term "ebusiness "- as distinct from "e-commerce" - can be used to describe this exciting adoption of the Internet to accelerate the goal of supply chain integration. In this context, e-business specifically refers to "the planning and executwn of the frontend and back-end operations in a supply chain using the Internet." the use of Internet-based computing and communications to execute both front-end and back-end business processes - has emerged as a key enabler to drive supply chain integration. Businesses can use the Internet to gain global visibility across their extended network of trading partners and help them respond quickly to a range of variables, from customer demand to resource shortages. This Paper examines the impact of e-business on supply chain integration, with particular emphasis on four key areas: information sharing. synchronized planning, work/low coordination. and the evolution of new business models. It offers real-world examples of how companies large and small have adopted e-business approaches to achieve the significant benefits of supply chain integration. It illustrates the power of e-business with examples of innovative technology solutions. Finally, it discusses how cross-supply chain performance monitoring will be a critical success factor in achieving the advantages inherent in supply chain integration.