The Emerald Research Register for this journal is available at       The current issue and full text archive of this journ...
the middleman within their supply chain and have also exemplified an innovative                     Web technology
IMCS      .
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each firm played one supplier against another, demanding and getting lower prices                   Web technology
IMCS   Impacts of the Internet
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procurement. It resulted in cost saving and performance improving for both BNSF’s            Web technology
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IMCS   and extendedness of a relationship (Min, 2001). In order to gain full collaboration, all
       trading partners ha...
Collaboration with suppliers. Dell constantly improves its collaboration with its         Web technology
global suppliers....
IMCS   SCM implementation and development
       In order to enhance competitive advantage through effective SCM, more com...
       work with software vendors and consultants to train all personnel who have           Web technology
IMCS   participants in the supply chain the opportunity to manage their inventory in an
       efficient manner. Excess inv...
Gartner Group Inc. (1999), Enterprise and Supply Chain Management: Optimizing Resources for         Web technology
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Web technology and supply chain management

  1. 1. The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at IMCS 12,4 Web technology and supply chain management David C. Chou 338 Department of Computer Information Systems, Eastern Michigan University, Ypsilanti, Michigan, USA Xin Tan Department of Management, University of Nebraska-Lincoln, Lincoln, Nebraska, USA, and David C. Yen Department of Decision Sciences and MIS, Miami University, Oxford, Ohio, USA Keywords Manufacturing resource planning, Supply chain management, Internet, Worldwide web, Telecommunication services Abstract Supply chain management is critical since firms always confront the competition on their supply chain efficiency. This article discusses the trend in supply chain management by examining Web technologies that transform and streamline the supply chain management. Introduction Companies strive to improve market share, grow corporate profit, and gain strategic advantage. In order to achieve these goals, supply chain competency must be placed at the heart of a company’s business model. Firms realize that the competition is driven by customer demand. Effective supply chain management can offer customers high quality products and services with low prices. Just like enterprise resource planning (ERP) and customer relationship management (CRM), supply chain management (SCM) is also an important component of extended enterprise applications. SCM serves as the back-end application by linking suppliers, manufacturers, distributors, and resellers in a cohesive production and distribution network. Beyond the pervasive adoption of ERP systems, which aim to facilitate internal operations and to increase productivity, firms are generating explosive demand for SCM applications. The network economy combines enhanced, transformed, and new economic relationships that are based on computer networks and human knowledge. Its connectivity is mainly realized through the intranet and extranet that exist within and across firms. SCM applications utilize these networks aiming to control costs, reduce paperwork, lower inventory, and shorten product cycles. Electronic data interchange (EDI) has been heavily used in industries. Nowadays, the Internet and the World Wide Web are widely accepted since they broaden the scope of connectivity among individuals and businesses. Web technologies allow firms to collaborate with business partners to gain the benefits of reducing costs, enhancing customer satisfaction, and Information Management & retaining competitive advantages. Computer Security Vol. 12 No. 4, 2004 The power of SCM is well exemplified by Dell Computers. Started in 1984 in Austin, pp. 338-349 Dell Computers was ranked the No. 1 PC maker in the US market in 1999 (Shah, 2001). q Emerald Group Publishing Limited 0968-5227 Dell’s direct-sales model is well known to the business community. Dell’s PCs are made DOI 10.1108/09685220410553550 by electronic order and are delivered directly to its customers. They have eliminated
  2. 2. the middleman within their supply chain and have also exemplified an innovative Web technology business model through their effective SCM. Dell Computers continues to enhance and broaden its competitive advantage by integrating the Internet into its entire business and supply chain process, including online sales, procurement, customer support and relationship management management. This paper first discusses the implications of SCM and its evolution. Next, the impacts of the Internet and Web technology on SCM and the major concerns on 339 managing Web supply chain are discussed. Later, Dell Computers’ successful SCM implementation is illustrated and discussed. Next, key steps to implement SCM are addressed and its future development is discussed. Implications of SCM Defining SCM Although SCM has gained in popularity, there remains confusion about its meaning and definition. Some field experts regard SCM as an operational process that involves the flow of materials and products. Other experts define SCM as a managerial philosophy or the implementation of a managerial philosophy. These deviations can be found in the following definitions (McKeown, 2000): SCM as a managerial philosophy: Supply chain management is an integrative philosophy to manage the total flow of a distribution channel from supplier to the ultimate user. SCM as the implementation of a managerial philosophy: The extension of integrated behavior to incorporate customers and suppliers through external integration is called supply chain management. SCM as a set of managerial processes: SCM is the process of managing relationships, information, and materials flow across enterprise borders to deliver enhanced customer service and economic value through synchronized management of the flow of physical goods and associated information from sourcing to consumption. A single and encompassing definition of SCM (Mentzer et al., 2001): Supply chain management is defined as the systemic, strategic coordination of the traditional business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. The last definition implies that SCM involves multiple firms, multiple business activities, and the coordination of those activities across functions and/or firms in their supply chain process. Effective SCM can help lower production and distribution costs through seamless cooperation between business partners in their supply chain. In the meantime, the performance of supply chains can affect customers’ satisfaction. Therefore, SCM can be seen as a source of competitive advantage and a lever for profit margin. Specifically, the goals of SCM can be categorized as the following: . decrease inventory costs by matching production to demand. This goal is consistent with the concept of just-in-time (JIT) inventory management;
  3. 3. IMCS . reduce overall production costs by streamlining the products flow within the production process and improving information flow between business partners; 12,4 and . improve customer satisfaction by offering increased delivery speed and flexibility through the seamless cooperation with the distributors and vendors. 340 Functions of SCM In a simplified supply chain, the following typical functions can be found in SCM: (1) Demand planning. Demand planning determines how much product should be made through data mining on the enterprise database. (2) Supply planning. Supply planning covers replenishment requirements and it makes sure that safety stocks are at appropriate levels. (3) Manufacturing scheduling. Manufacturing scheduling looks at available resources and prepares a production schedule based on real-world restrictions. (4) Transportation planning. Transportation planning determines the best, most cost-effective method for warehousing and shipping. Some less common functions can be found in certain SCM applications: (1) Graphical supply chain modeler. Graphical supply chain modeler provides visible simulations for supply chain modeling. Especially in supply chain design, a graphical modeler enables rapid modeling of a supply chain, starting at the extended enterprise and proceeding down to lower levels. Designers can use intuitive click, drag and configure techniques to achieve swift development. (2) Supply chain optimizer. Supply chain optimizer performs linear programming simulations for creating an optimized plan or schedule. Supply chain optimizer enables the enterprise to synchronize global purchasing, manufacturing, product flow and distribution while adhering to strategic objectives. Driving forces of SCM The popularity of SCM is attributed to several driving forces, i.e. global sourcing, an emphasis on time- and quality-based competition, and their respective contributions to greater environmental uncertainty (Mentzer et al., 2001). Corporations have increasingly networked with global suppliers for seeking effective flow of materials for manufacturing process. In today’s market, the competitions are based on time and quality. Delivering a defect-free product to the customer on time is a requirement in the market place. In order to meet such requirements, a closer coordination with suppliers and distributors is desirable. Global outsourcing and performance-based competition, combined with rapidly changing technology and economic conditions, all contribute to marketplace uncertainty. This uncertainty requires greater flexibility on the part of individual companies and distribution channels, which in turn demands more flexibility in channel relationships. Evolution and history of SCM The driving forces of SCM explain the sources of developing SCM. Historically, a firm was not likely to make either its supplier or customer a partner. In many industries,
  4. 4. each firm played one supplier against another, demanding and getting lower prices Web technology (Dobyns, 1990). The post-World War II supply chain was a set of linear, individualized processes and supply chain that linked manufacturers, warehouses, wholesalers, retailers and consumers together management in the form of a human/paper chain (Ganeshan, 2002). Beginning in the 1960s and 1970s, firms started to view themselves as closely linked functions whose joint purpose was to serve their customers. This internal integration 341 was often referred to as material logistics management or materials management (Fredendall and Hill, 2001). During this period, SCM innovations such as material requirement planning (MRP) were developed. Those firms that successfully integrated these functions did improve their performance. However, some constraints, such as customers’ or suppliers’ unresponsiveness did hinder the improvements. These constraints prevented the firms from instantly responding to market changes. In late 1970s and early 1980s, US firms faced fierce competition from their Japanese counterparts. Especially in the automobile industry, Japanese carmakers utilized just-in-time delivery to achieve efficient inventory management. Detroit’s Big Three had to find ways to communicate with suppliers effectively. The solution at the time was to communicate through batch orders and via a standard called electronic data interchange (EDI) (Mount and Caulfield, 2001). Since the 1990s, the pervasive adoption of Internet and Web technology have promised a ubiquitous and less costly way to tie companies and their business partners together in the supply chain. The great collaboration made e-Commerce buzzwords like “B2B” and “B2C” known to almost everybody in business circles. With the advancement of information technology, the collaboration of business partners will continuously improve the effectiveness of SCM. Gartner Group even gave a “c-Commerce” (collaborative commerce) tag to the emerging business model starting from the year 2000 (Gartner Group Inc., 1999). A summary of SCM evolution stages is illustrated in Table I. SCM and the Internet Information technology (IT) contributed to the growth of world economy. In the network economy, business applications and management must embrace the Internet in order to survive in the e-Commerce age. Stage Years Milestone Lessons learned by firms Introductory 1960s-1970s MRP Firms are closely linked functions. Internal integration will help serve customers better Growing Late 1970s-late 1980s EDI Just-in-time delivery demands for efficient communications with suppliers Pre-mature 1990s-present E-commerce, The Internet provides a ubiquitous and B2B and B2C cost-efficient way to tie together companies and their business partners in the supply chain Future (mature) Starting from 2000 C-commerce Collaboration of business partners will continuously improve the effectiveness of Table I. supply chain management Stages of SCM evolution
  5. 5. IMCS Impacts of the Internet The Internet changes the way companies do business. The changes are permanent in 12,4 the transition from the industrial economy to the network economy. SCM has been enabled by convergence, which refers to the integration of computer and communication technology (Short, 2002). The Internet-strengthened power of convergence can be depicted in two aspects: 342 (1) Ubiquitous and low-cost connectivity makes it possible for small and mid-sized companies to take advantage of SCM techniques. (2) Speedy network transmission helps businesses realize seamless and real-time communications and transactions. The potential challenges and impacts made by the Internet can be categorized as follows: Shifting power to buyers. Although many e-Commerce experts have profound arguments on the impact of the Internet, the simplistic impact on the supply chain is that the Internet is shifting power from the seller to the buyer irreversibly. The search power for the buyer is now unbounded. Suppliers also provide products and services information through their Web sites. Not only the consumer benefits from this power shift, but also purchasing agent within business and government enjoy this service. Facilitating global interconnectivity. The Internet not only provides businesses and individuals with the convenience and flexibility in transaction and communication, but also brings the competitions into the global arena. The Internet facilitates companies to conduct business in the global village. Enabling the trading partners to better coordinate and collaborate. The Internet enables the trading partners within the supply chain (or the value chain) to better coordinate and collaborate for mutual benefits. Technologies that are based on the Internet make seamless integration possible among business partners. Breaking the old paradigms of inter-organizational boundaries. The Internet changes the way supply chains are managed, planned and controlled. SCM-related information and decisions are integrated into the Web, breaking the old paradigms of inter-organizational boundaries. By implementing the Web-based SCM and CRM, companies can virtually eliminate the boundaries among business partners to form the extended enterprise. Overall, the Internet offers the business community a variety of opportunities and challenges. Any companies willing to adopt Internet technologies and business models in a timely manner will clearly gain competitive advantages. Web technology’s contribution The Internet seems to be an extra distribution channel to most firms. In fact, the Internet and Web technologies can support the entire supply chain’s operations. Internet-based supply chain operations are fast and inexpensive. Moreover, customers can instantly check the status of their orders by simply clicking their computer mouse. Corporate executives and managers can conduct real-time access to firm’s inventory level, and so do their suppliers and distributors. Specifically, Web technology made the following contributions to SCM. Developing e-Commerce applications. Web technology offers a variety of supports for online communications and transactions. Online procurement is an example of business transactions that fulfills e-Commerce applications. Burlington Northern Santa Fe (BNSF), for example, took the initiative to implement an Internet-based indirect
  6. 6. procurement. It resulted in cost saving and performance improving for both BNSF’s Web technology procurement executive and the suppliers (Koch, 2000). XML-based information exchange and sharing. Electronic data interchange (EDI) and supply chain played an important role in the evolution of SCM. Trading partners used EDI for management information exchange, such as sending requisitions and receiving purchasing orders. However, EDI has not been progressed as rapidly as expected, mainly because it was difficult to implement and costly to maintain. EDI’s inter-organizational standard on 343 documents’ format and structure make it difficult to follow. Another drawback of EDI is that it does not operate in real time (Graham, 2002). The XML- (Extensible Markup Language) based Internet system allows organizations to exchange data on a transaction-by-transaction basis. An XML file, together with XML schema, provides a definition and semantics of the document for business transactions. As XML documents and XML schema are text-based, they can be transmitted through HTTP protocol. Since implementing XML data transmission is cost-efficient, small and mid-sized companies that previously could not afford EDI-based solutions will be able to benefit from the timely information exchange with trading partners. Applications integration. Applications integration is one of the most important IT strategies since it can create or modify the interactions among related applications and to encompass canned software, legacy applications and Web services. Web services can deploy software vendors’ products to solve current integration needs; its big players in the market include IBM and Microsoft. Partners’ collaboration. Collaboration among trading partners helps SCM participants gain great benefits from providing end customers with high quality, low cost products through flexible and efficient distribution. Web technology boosts the supply chain visibility by providing more real-time data from all links of the supply chain, resulting in greater collaborations among trading partners. Web services technology Web services and service-oriented architectures use Simple Object Access Protocol (SOAP), Web Services Definition Language (WSDL), and XML specifications as the basic means for Internet connections. Web services communication can involve either simple data passing or two or more services coordinating some activity. The goal of Web services is to provide a universal set of communications protocols to enable computer systems and business processes to seek each other out over the Internet, and have meaningful interactions without human intervention. A service is a function that is well defined, self-contained, and does not depend on the context or state of other services. The IT industry will standardize on the capabilities of various services over time. In the long run, the industry will define standard capabilities of SCM, CRM, ERP, and other services. These services will become standard and could be seen as commodities. Concerns to Web-based SCM Although the implementation of Web-based SCM possesses great potential for cutting costs and driving efficiencies, this process does generate some cultural and technical concerns. Cultural concern. A seamless collaboration among trading partners in the supply chain is based on the efforts of trust and commitment, cooperative norms, interdependence, compatibility, managers’ perceptions of environmental uncertainty,
  7. 7. IMCS and extendedness of a relationship (Min, 2001). In order to gain full collaboration, all trading partners have to reach a common vision about the SCM strategy. Moreover, 12,4 corporations need to overcome natural resistance by revealing business secrets to their partners. Technical concern. Technical concerns on Web-based SCM are manifold. The biggest concern stems from the insecure nature of the Internet. Due to the open 344 standard of Internet technologies, Web sites are vulnerable to attacks. Therefore, data security becomes a high priority for Web-based SCM implementation. Application integration is another technical concern. As Web services are in the premature stage, the integration with legacy applications place a great challenge to Web-based SCM implementation. By the same token, system-wide integration among trading partners is also a challenge. Case study: Dell Computers Dell Computers has survived the recent economic slowdown since March 2000. This phenomenon was the result of “Dell’s super-efficient supply chain”, as described by Dick L. Hunter, Dell’s vice president who was overseeing Dell’s SCM (Millet, 2001). Dell’s success story demonstrated a real case of effective integration of SCM and the Internet. Dell’s built-to-order model Dell Computer was found by Michael Dell in 1984 with a simple concept: by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers; it can distribute computers much more quickly than the slow-moving, indirect distribution channels (Dell Computers, 2002a). Dell achieved a great innovation in SCM by adopting a direct-sales model; that is, a demand-driven supply chain in which the traditional build-to-stock approach is replaced with a build-to-order model. With the new model, Dell was able to reduce inventories, cut costs, and reduce production cycles. Dell has expanded its JIT practices from the company to the entire supply chain as suppliers have been integrated into Dell’s operations (Zacharia, 2001). A well-managed supply chain reaps the best fruit from the build-to-order tree. Dell has created efficiencies through its materials management process. They met the demands of customer orders by building the customized systems in a timely manner. With the implementation of i2 SCM, Dell has enhanced its procurement process that has resulted in almost 90 percent of the company’s procurement being done online and leaving only two hours of inventory on the factory floor (Dell Computers, 2002b). The Internet and Web services Dell’s build-to-order model utilized the Internet well. The Internet provided Dell not only a direct-sales channel, but also a great opportunity in managing its supply chain. Launching e-Commerce. Dell launched in 1994 and added e-Commerce capability in 1996. At Dell’s Web site, customers may review, configure and price computer systems within Dell’s entire product line; order computer systems online; and track orders from manufacturing through shipping. These value-added initiatives enable Dell’s SCMto meet customer demands today. By the end of 1999, Dell’s Web site generated $35 million each day in revenue (Dembeck, 1999).
  8. 8. Collaboration with suppliers. Dell constantly improves its collaboration with its Web technology global suppliers. The heart of its success is, an Internet portal that provides a pipeline for real-time information exchanges between Dell and its suppliers. and supply chain Through the pipeline, Dell sends forecasts to its suppliers and gets responses back management about their ability to support those requirements from a supply/demand perspective. Dell also sends requests to have materials pulled into its factories on a two-hour basis per facility (Lewis, 2001a). Dell added powerful software applications from i2 and Agile 345 to its Internet-based platform, realizing better materials flow and other improvements. In addition, these programs enabled Dell to apply next-generation thinking on inbound and outbound logistics and continuity of supply. Dell’s ability to strengthen the collaboration with suppliers over the Web has paid off. Using, the company has spent around $26.4 billion on worldwide procurement of direct materials and $800 million on outbound logistics (Lewis, 2001b). Web service initiatives. Dell focused its early Web service initiatives on direct materials management and inventory management, which generated a significant impact on the bottom line. Dell began by closely connecting its assembly operations with the network of logistics providers that operate the distribution centers for direct materials. In the past, Dell had to hold substantial inventory in the supply chain to ensure timely delivery of products to its customers. To ensure that it did not run short of key components, suppliers had to maintain ten-day inventory buffers at vendor-managed hubs, and Dell itself had to maintain buffers of 26 to 30 hours at assembly plants. Every week, Dell distributed a new 52-week demand forecast to all suppliers. Today, Dell generates a new manufacturing schedule for each of its plants every two hours that reflects actual orders received, and publishes these schedules as a Web service. The XML-based schedules can be fed directly into disparate inventory-management systems that are maintained by all vendor-managed hubs. Thus, the hubs always know Dell’s precise material requirements and can deliver the materials to a specific place accordingly. With this approach, Dell has been able to cut the inventory buffers at its plants to just three to five hours (Hagel, 2001). Dell’s ultimate goal is to eliminate excess inventory throughout the supply chain, but not just to push inventory from the manufacturer to the supplier. Using an event-management Web service, Dell sends out queries on the status of orders to suppliers, and then suppliers’ systems will automatically send back responses. Dell expects that this system will reduce hub inventories by as much as 40 percent, while improving gross margin by better matching demand and supply. The outcome Dell surpassed Compaq to become the No. 1 PC maker in the world in 2001. Dell’s success should be attributed to its direct-sales model and the utilization of effective SCM. The resulting efficiency ratios such as inventory turnover and plant utilization placed Dell in an advantageous position, which encouraged consolidation among competitors to achieve the same level of efficiency. Although the slow PC market forced Dell’s revenue to drop, its core competency in SCM helped Dell manage 15 percent increase in product shipments as industry volume dropped 5 percent in 2001 (Serwer, 2002).
  9. 9. IMCS SCM implementation and development In order to enhance competitive advantage through effective SCM, more companies 12,4 intend to invest in better technological solutions. Nowadays, an effective SCM program confronts two major challenges: (1) Integrating Web-based SCM applications with legacy enterprise applications, which are based on mainframe or client/server systems. 346 (2) Linking systems with their supply chain partners to enable seamless supply chain integration. Switching from traditional business operations to a new system empowered by SCM is not an easy task. For example, when announcing an unexpected shortfall in third quarter earnings, Nike, a famous sports apparel maker, attempted to blame the results on a new SCM system from i2 Technologies (Farmer, 2001). Steps to achieve supply chain excellence SCM needs to be implemented in a cautious approach during the premature stage. A phased implementation allows system errors to be found early and to be remedied before moving to the next phase. To create an efficient SCM system, a company needs to stick with the following phases (Martin and Roth, 2000): Phase I – creating vision. This phase needs to complete the following tasks: . define how far the supply chain will spread from customers to suppliers; . identify the existing and potential issues along the supply chain; and . decide how the SCM would work to realize the seamless integration among the various business partners. Define the method of information flow, demand exchange and data exchange. Phase II – establishing commitment. This phase consists of the following important tasks: . set up organizational priority; . seek top executives’ support and personnel’s commitment; and . gain supports from suppliers, distributors and customers. Phase III – making preparations. This phase consists of the following needed tasks: . re-train people to become more literate on information technologies; . prepare the legacy enterprise applications for the SCM integration; and . form implementation teams, including professional consultants if needed. Phase IV – selecting the SCM vendor. This phase includes the following important tasks: . evaluate and decide the vendor for specific SCM solutions; and . select a suitable SCM vendor to meet company’s requirements. Phase V – formalizing SCM applications. This phase includes the following tasks: . conduct pilot test program; . work with suppliers, distributors and customers to re-engineer the work processes;
  10. 10. . work with software vendors and consultants to train all personnel who have Web technology access to SCM applications; and and supply chain . integrate new SCM applications with the legacy enterprise applications. management Phase VI – continuous assessment and improvement. The last phase includes the following important tasks: . make the performance measures align to re-designed processes and assign them 347 to specific individuals for monitoring and assessing; . work closely with the software vendor to refine the system in a timely manner; and . improve the SCM applications based on survey results received from business partners. Future development of SCM With the advancement of Web technologies, the revolutionizing trend of SCM may focus on helping decision makers better manage customer relationships, efficiently integrate internal applications, and collaborate in real-time with trading partners. In particular, development of SCM may focus on the following four directions (Ganeshan, 2002). Customer and employee self-service. In order to improve customer service and gain customer loyalty, firms need to provide the tools that help customer customize and streamline their business transactions over the Internet. Through self-service applications, customers may browse catalogs, check updated prices, place and approve orders, check status of orders and obtain invoicing information in real-time. Employee self-service is another major element of Web-enabled SCM. A Web-based SCM combines all business sources to form single source business intelligence for decision makers. In addition, enterprise application integration enables employees to make better decisions easily. Vendor-managed inventory and automatic replenishment. Vendor managed inventory (VMI) is a technique that allows suppliers to be empowered by managing inventories of agreed-upon items. VMI is now a widely practiced initiative in the retail industry. For example, Procter and Gamble (P&G) and Wal-Mart have developed well-functioned VMI systems. A Web-based VMI system, in which the suppliers monitor inventory information via the Internet and replenish the items according to a predetermined contract, will improve customer service, reduce inventory buffers, reduce administrative costs, and reduce uncertainty for the supplier. Collaborative planning, forecasting, and replenishment. Collaborative planning, forecasting and replenishment (CPFR) is a new SCM initiative that is revolutionizing the B2B e-commerce world. As a new business model, CPFR helps businesses align processes and standardize technologies to share forecasts and other planning information securely, simultaneously, globally and in real-time. The key idea of this initiative is to share information, including forecasts, pricing and promotions, store openings, production and shipping schedules, inventory and replenishment, over the Internet among business partners. The emergence of exchanges. The Internet has created a medium to connect fragmented buyers and sellers, to lower transaction costs, and to make price transparent in the supply chain. The newly created market mechanisms include auctions, catalogs, and exchanges. For example, the Net Market Maker gives
  11. 11. IMCS participants in the supply chain the opportunity to manage their inventory in an efficient manner. Excess inventory can be auctioned while peaks in demand can be met 12,4 by buying from certified suppliers at reasonable costs from these exchanges. Conclusion In today’s market situation, most firms cannot operate as autonomous entities but as 348 participants in integrated supply chains. In order to meet customers’ expectations, firms try their best to shorten product development, reduce costs and prices, improve quality, and expedite distribution. SCM utilizes a growing body of tools and techniques for coordinating and optimizing these key processes. Additionally, SCM facilitates coordination among trading partners, which enables opportunities for synergy. A firm’s competitive advantage, in turn, is highly dependent on the efficiency of its supply chain. Dell Computers, through its efficient SCM and built-to-order business model, gained a great success in 1990s. The business environment changes rapidly. Therefore, the focus of SCM must evolve accordingly. The change in corporate strategy increases their dependency on suppliers. A wide range of products and services provided by the suppliers makes SCM increasingly complex. Under this situation, the collaborative relationship between trading partners in the supply chain becomes critical. Effective SCM must be responsive to this challenge. Fortunately, the Internet is able to facilitate this challenge. The Internet offers the supply chain enormous potential and entirely new methods for streamlining coordination between business partners and customers. The Internet enhances SCM’s performance and it is an essential part of e-Commerce. As the SCM evolves in the information age, the network supports coordination between business partners to make all the information, transactions, and decisions flow through the network. As a successful SCM model, Dell Computers has established competitive advantages with the advancement of the networked economy. Generally speaking, in an environment where the competition is increasingly based on supply chain efficiency, firms need to put SCM at the heart of their business model to be successful. They must take advantage of the Internet and Web technology to achieve higher-quality and lower-cost collaboration with trading partners. References Dell Computers Corp. (2002a), FY 2001 Annual Report on 10-K, available at: Dell Computers Corp. (2002b), Dell’s Supply Chain: Improving on a World-class Process, available at: Dembeck, C. (1999), “Dell redesigns global e-commerce site”, E-commerce Times, 15 November, available at: Dobyns, L. (1990), “Ed Deming wants big changes, and he wants them fast”, Smithsonian, August, pp. 74-83. Farmer, M.A. and Luening, E. (2001), “i2-Nike fallout: a cautionary tale”, CNET, 9 March, available at:¼prntfr Fredendall, L. and Hill, E. (2001), Basics of Supply Chain Management, St Lucie Press, Boca Raton, FL. Ganeshan, R. (2002), “Web-enabling the supply chain: an exploratory case study”, New Directions in Supply-Chain and Technology Management: Technology, Strategy, and Implementation, Amacom, New York, NY.
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