IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) ON SUPPLY CHAIN DYNAMICS

[1] Prof. Sanjeev Hota Associate professor & Vice Principal , Bhavans Centre for Communication & Management. Address: Bharatiya Vidya Bhavan, Plot No-9, Kharavela Nagar, Unit-III, Bhubaneswar-751 001. e-mail:profsanjeevhota@gmail.com Mobile No: +919937003763 [2] Mrs. Pragyan Parimita Sarangi Sr. Lacturer, Bhavans Centre for Communication & Management. Address: Bharatiya Vidya Bhavan, Plot No-9, Kharavela Nagar, Unit-III, Bhubaneswar-751 001. e-mail: pragyansarangister@gmail.com Mobile No: +919437282167

ABSTRACT There is a fast growth in adoption of information and communications technology (ICT) in supply chain management. As organizations seek to improve supply chain efficiency through increased integration, ICT can be considered as a key enabler for supply chain management by supporting information-sharing. A literature review within supply chain integration and the impact of ICT indicates that there are various integration dimensions and levels, and different effects and influencing factors. Even though there is a considerable amount of research within the field, the complexity of ICT impact on integration implies that previous studies cover only a limited number of dimensions and variables at a time. In this paper, we have focused on modernized tools of ICT and their implications in coordinating the management activities of supply chain within an organization. This article gives an outlook on the basic relationship of ICT and supply chain integration especially though new customized software. Keywords:Information and Communications Technology (ICT), Supply Chain Integration, Supply Chain Management, Information Technology (IT), Electronic Data Interchange (EDI), Information Sharing, Electronic Supply Chain Design (e-SCD).

INTRODUCTION Supply chains include a companys entire manufacturing and distribution process. They involve every step of the production right from planning to manufacturing to handling defective goods. The overall goal of these chains is to keep the process running smoothly at all times and to keep the entire components (i.e. suppliers, warehouses, etc.) well linked. Information is crucial to the performance of a supply chain since it provides the basis on which supply chain managers make decisions. With todays emphasize on cutting costs and streamlining expenses, many companies are looking to improve their bottom lines with more effective supply chains. Information technology consists of tools used to gain awareness of information, analyze this information and execute on it to increase the performance of supply chain. Recent development in technologies enables the organization to avail information easily in their premises. These technologies are helpful to coordinates the activities to manage the supply chain. Bi-directional arrow in fig-1 reflects the accommodation of reverse materials and information feedback flows. A Manager needs to understand that information technology is more than just computers. Except computer data recognition equipment, communication technologies, factory automation and other hardware and services are included.

Fig-1: Integrated supply chain model There is currently a considerable preoccupation with the impact of electronic innovations in various environments including business, commerce, and manufacturing. In particular, the

Internet and related information and communication technologies (ICT) have recently enabled the cost-effective disseminationof information between disparate parties in the supply chain. New supply chain strategies, such as Vendor Managed Inventory (VMI), Collaborative Planning Forecasting and Replenishment (CPFR), or Efficient Consumer Response (ECR), have begun to exploit these new communication channels (Disney 2001), principally at the retail end of the supply chain. The impact of the ICT enabled supply chain on manufacturers and materials/component suppliers is, however, less well understood and exploited. LITERATURE REVIEW There have been many research efforts to identify factors and practices indicating howtechnological innovation may support company in creating a competitive advantage. The common ground of such research is the relationship between innovation and the development of competitiveness. For example, Tidd et al. (2001) argued that the possible contribution of innovation to create competitive advantages ranges from the continuous assessment of the cost/performance ratio, as in the case of incremental innovation, to the establishment of completely new competitive rules, as in the case of disruptive innovation. Information and communication technology (ICT) is one of the most important and fast growing technological innovations that provide companies with a wide range of opportunities to improveefficiency and effectiveness and even gain competitive advantage (Porter and Millar, 1985). The use of ICT in supply chain and logistics management has attracted increasing attention of the business and academic world. Lee and Wang (2001) addressed the possibilities of reducing the bull whip effect in supply chains through Internet based collaboration. Technology application in supply chain context may provide benefits in the following areas: improve supply chain agility, reduce cycle time, achieve higher efficiency, and deliver products to customers in a timely manner (Radjou, 2003). Ovalle and Marques (2003) found that supply chain performance would be significantly increased if the members of the supply chain collaborated through Internet tools. However, the diffusion of ICT in managing supply chain processes is having a profound impact on supply chains. For manufacturers and retailers, information management has become as critical as the physical movement of goods. As a result, poor ICT resource management by one or more actors in the supply chain could have negative repercussions on the performance of the entire supply chain in terms of planning ability, customer service and costs (Lee and Billington,

1992). Furthermore, ICT may further reduce existing wastes and inefficiencies along the supply chain through increasing real-time movement of shipment and operational control of logistics activities. However, increasing expenditure on ICT in the supply chain process does not automatically result in higher firm performance. The debate on the IT-productivity paradox suggests that the impact of ICT on firm performance remains unclear (Brynjolfsson, 1993). The rapid diffusion of technology has had significant impact on their traditional core-competencies such as inventory management, distribution, and transportation (Evangelista et al., 2007). SUPPLY CHAIN AND ORGANIZATIONAL DYNAMICS All enterprises participating in supply chain management initiatives have a specific role to perform. They also share the joint belief that they and all other supply chain participants will be better off because of this collaborative effort. Power within the supply chain is a central issue.There has been a general shift of power from manufacturers to retailers over the last two decade. Retailers sit in a very important position in term of information access for the supply chain. Retailers have risen to the position of prominence through technologies. The Wal-Mart & P&G experiences, demonstrate how information sharing can be utilized for mutual advantage. Through sound information technologies Wal-Mart shares point of sale information from its many retail outlet directly with P&G and other major suppliers. The development of Inter organizational information system for the supply chain has three advantages like cost reduction, productivity, improvement and product/market strategies. 1. Remote Input /Output node: In this case the member participates from a remote location within the application system supported by one or more higher-level participants. 2. Application processing node:A member develops and shares a single application such as an inventory query or order processing system. 3. Multi participant exchange node:The member develops and shares a network interlinking itself and any number of lower level participants with whom it has an established business relationship.

4. Network control node:The member develops and shares a network with diverse application that may be used by many different types of lower level participants. 5. Integrating network node: In this case the member literally becomes a data communications/data processing utility that integrates any number of lower level participants and applications in real times. APPLICATION OF INFORMATION AND TECHNOLOGY IN SCM While developing and maintaining Supply chain's information systems both software and hardware must be addressed. Hardware includes computer's input/output devices and storage media. Software includes the entire system and application programme used for processing transactions, management control, decision-making and strategic planning.Recent developments in Supply chain management software are as follows. 1. Base Rate, Carrier select & match pay (version 2.0) developed by Distribution Sciences Inc.This is useful for computing freight costs, compares transportation mode rates, analyzes cost and service effectiveness of carrier. 2. A new software programme developed by Ross systems Inc. called Supply Chain planning which is used for demand forecasting, replenishment & manufacturing tools for accurate planning and scheduling of activities. 3. P&G distributing company and Saber decision Technologies resulted in a software system called Transportation Network optimization for streamlining the bidding and award process. 4.Logitility planning solution was introduced to provide a programme capable managing the entire supply chain. ELECTRONIC COMMERCE (E-COMMERCE) This describesa wide range of tools and techniques utilized to conduct business in a paperless environment. Electronic commerce includes electronic data interchange, e-mail, electronic fund transfers, electronic publishing, image processing, electronic bulletin boards, shared databases

and magnetic/optical data capture. Companies are able to automate the process of moving documents electronically between suppliers and customers. ELECTRONIC DATA INTERCHANGE (EDI) EDI refers to computer-to-computer exchange of business documents in a standard format. EDI describe both the capability and practice of communicating information between two organizations electronically instead of traditional form of mail, courier, & fax. The benefits of EDI are: (1) Quick process to information. (2) Better customer service. (3) Reduced paper work. (4) Increased productivity. (5) Improved tracing and expediting. (6) Cost efficiency. (7) Competitive advantage. (8) Improved billing. Though the use of EDI, supply chain partners can overcome the distortions and exaggeration in supply and demand information by improving technologies to facilitate real time sharing of actual demand and supply information. BAR CODING AND SCANNER Bar code scanners are most visible in the checkout counter of super market. This code specifies name of product and its manufacturer. Other applications are tracking the moving items such as components in PC assembly operations, automobiles in assembly plants. DATA WAREHOUSE Data warehouse is a consolidated database maintained separately from an organization's production system database. Many organizations have multiple databases. A data warehouse is organized around informational subjects rather than specific business processes. Data held in data warehouses are time dependent, historical data may also be aggregated. ENTERPRISE RESOURCE PLANNING (ERP) TOOLS Many companies now view ERP system (eg. Baan, SAP, People soft, etc.) as the core of their IT infrastructure. ERP system have become enterprise wide transaction processing tools which capture the data and reduce the manual activities and task associated with processing financial, inventory and customer order information. ERP system achieve a high level of integration by

utilizing a single data model, developing a common understanding of what the shared data represents and establishing a set of rules for accessing data. THE SUPPLY CHAIN MACRO PROCESSES The emergence of supply chain management has broadened the scope across which companies make decisions. This scope has expanded from trying to optimize performance across the division, to the enterprise, and now to the entire supply chain. This broadening of scope emphasizes the importance of including processes all along the supply chain when making decisions. From the companies perspective, all processes within its supply chain can be categorized into three main areas: (1) Processes focused down stream (2) Processes focused internally (3) Processes focused upstream The above mentionedclassification defines the three macro supply chain processes described as follows: Customer relationship management (CRM): processes that focus on downstream interactions between the enterprise and its customers Internal supply chain management (ISCM): processes that focus on internal operations within the enterprise. Supplier relationship management (SRM): processes that focus on upstream interactions between the enterprise and its suppliers. There is a fourth important building block that provides the foundation on which the macro processes rest. We call this category the Transaction Management Foundation (TMF), which includes basic ERP systems, infrastructure software, and integration software. TMF is necessary for the three macro processes to function and to communicate with each other. The relationship between the three macro processes and the transaction management foundation is as below.

Fig-2: The Macro-Processes in a Supply Chain

Fig-3: The stages of SCM Evolution THE EFFECT OF IT ON COORDINATION MECHANISMS Some tools such as information technology and information systems have the most effect on flow coordination mechanisms. These mechanisms use in order to manage information and product flows. Different companies has placed in a global supply chain, use some tools such as web or internet as tools for better coordination with other members of supply chain. In addition, the existence of information technology enables companies to respond customers needs more effectively. In fact, IT is more importantly viewed to have a major role in supporting the collaboration and coordination of supply chains through information sharing and the most typical role of IT in SCM is reducing the friction in transactions between supply chain partners through cost-effective information flow. In addition, IT can also be used for decision support.The impact of information technology on the coordination mechanisms is arguable from two aspects. One aspect is electronic supply chain and the other one is e-commerce issue. E-SUPPLY CHAIN AND ITS BENEFITS IN COORDINATION New developments in information technology have provided a ground in which companies can program, control and manage the inputs and the outputs that flow in a supply chain. Customization is a critical success factor in current business environment. One of the most important components that make fast and inexpensive customization possible is electronic supply

chain design (e-SCD). eSCD is a supply chain design which integrates and coordinates suppliers, manufacturers, logistic channels and customers using information technology (IT). The primary distinction between the e-SC and the traditional supply chain is that the e-SC, while structurally based on technology-enabled relationships, makes decisions based upon efficiency benefits. Because the e-SC is created via electronic linkages, thereby providing low switching cost, it allows for the supply chain configuration to be very adaptable to changing trends, consumer preferences and competitive pressures. In essence the e SC is a hybrid between traditional arms length and traditional supply chain approaches. It is relationship based but only as long as business objectives are being met. It potentially allows firms to realize the low procurement costs associated with arms length relationships and shared risks and expertise of traditional supply chain. Moreover, e-SCM can be thought of as a balancing act, causing firms to seek equilibrium between the cost benefits associated with arms length relationships and the structural benefits of traditional supply chain management. THE MODEL OF IT EFFECT ON COORDINATION OF SUPPLY CHAINS As we said before, generally a supply chain is comprised of supplier, manufacturer and customer and whole of these members are placed in a same network. Supplier can supply raw materials directly for a manufacturer or can be a supplier for other suppliers; in addition, customer may also be a distributor, retailer or an end customer. Totally, every member has focus on a specific function. In this context, manufacturer has focus on production, supplier has focus on resourcing and finally, customer is interested to delivery. Today, in information and communication age, companies have no other options but to use information technologiessuch as internet, in order to compete with other supplychains and also in order to reinforce their coordination with other members. So as we said before, management of information systems is very important and it leads to more coordination between members,so every member in a supply chain must analyze all the information flows. The accurate analysis of information leads to better comprehension about the status of other members and companies. Such comprehension will have more ability to coordinate themselves with others and make the best decisions. When such coordination and alliancebetween companies has appeared, it is the best time to implement processes and definitely it will be accompanied with less time and cost

rather than uncoordinated supply chains. Figure 4shows this flow.The figure presents, every partys managers must analyze the information flows coming to their companies and coordinate themselves with other members in order to optimize implementation of processes.

Fig-4:Supply Chain Flow THE RELATIONSHIP BETWEEN ICT AND SCM IT in general, and IT in SCM, is argued to enable great opportunities, ranging from direct operational benefits to the creation of strategic advantage. For example, Benjamin et al.and Porter and Millar argued in the 1980s for the strategic possibilities of IT for business. Porter and Millar, in particular, advocated that IT changes industry structures and rules of competition, creates competitive advantage, and creates new business opportunities. In the logistics/supply chain context, Bowersox outlined that IT is key in supporting companies creating strategic advantage by enabling centralized strategic planning with day-to-day centralized operations. A common view is that IT has a profound impact on managing supply chains. One group of scholars argues that because of information technologies, supply chainsbecome less integrated and more market-oriented. Williams etal. suggest that electronic SCM (in their discussion, electronic relates to the use of the internet) combines the structural benefits of SCM with the efficiency benefits of an arms length approach, enabling, for example, lower

costthrough possibilities of selecting from a larger supplier base. The landmark work of Malone et al. proposes that the value offerings through IT are electronic communication (speed of communication), electronic brokerage (by IT providing a lean, automated intermediary for resolving market transactions), and electronic integration (coupling of processes). IT seems to be particularly important in fast clock speed industries or when flexibility and agility are needed. Many theoretical papers have addressed the value of IT in SCM. For example, Levary suggests that IT in SCM provides a reduction in cycle time, a reduction of inventories, a minimization of the bullwhip effect, and improvement in the effectiveness of distribution channels. Reporting the benefits of IT in SCM on a general level, is fraught with problems, because, as noted insightfully by Walton and Gupta in their discussion of the benefits of EDI. Some benefits are dyadic (or multilateral), depending on both (or a number of) supply chain parties, and some benefits are individualistic. The magnitude of change differs from slight to significant process change to the creation of competitive advantage and benefits depend on where EDI is implemented. Thus, the benefits of IT in SCM are manifold, and can vary according to the implementation method. Moreover, the use of IT is closely related to process changes. As such, SCM can be viewed as a process change that is helped or enabled by IT. This makes it difficult, or even in many cases a profane academic exercise, to separate the origin of the benefit, whether derived from IT, process change, or both. Finally, with regard to the impact and benefits of IT, the controversial phenomenon of the productivity paradox of IT cannot be avoided. Macroeconomic studies in the US identified that despite growing IT investment, overall productivity statistics showed poor performance. However, several firm-level studies have argued for the non existence of a productivity paradox. For example, in a longitudinal firm-level investigation showed that IT has a clear impact on firm output. More recently, Devaraj and Kohli argued that the conceptual problem relating to the productivity paradox of IT is that in many studies only IT investment, not actual usage, is considered. They showed how the observed use of IT was positively and statistically significantly related to revenue and quality improvements with a specified time lag, while investment in IT, as such, with the same data, was not. In addition, David draws a parallel between the IT productivity paradox and the introduction of a revolutionary electrical dynamo at the turn of the 20th century, and concludes that this innovation did not at first affect productivity, and argues that there are

common problems with the introduction of new technology, which may realize productivity gains only after a considerable time lag. Appropriate use of ICT, Knowledge Management and Information sharing gave further boost to the benefits to the companies. In general, the companies could successfully utilize the ICT and obtain benefits such as: (1) Focusing more on reducing response time (2) Business processes redesigning (3) Streamlining the logistic activities across the supply chain to reduce cost and improve efficiency (4) Developing high valued supply chain relationships (5) Enhancing customer services for competitive advantage (6) Thriving to attain global standard and access to world market. Most of the companies had considerably invested in the development of probable integrated ICT infrastructure solutions for logistics and supply chain network management in terms of computer hardware, software, and connectivity by means of EDI, BCS13, ERP, Intranet, Extranet and Internet. It shows the importance and role of ICT in supply chain. The role of ICT in supply chain has emerged as under: (1) Negotiating multilateral trade agreements (2) Finalizing Bilateral trade agreements (3) Expediting communications and transportation of data/information (4) Lowering the cost and time reduction. According to Simchi-Levi et al., objectives of IT in SCM are(1) Providing information availability and visibility (2) Enabling single point of contact of data (3) Allowing decisions based on total supply chain information (4) Enabling collaboration with supply chain partners. Elaborating on the commonly viewed functional roles of IT in SCM, the following classification can be adopted (Fig. 5).

Fig-5: Functional role of IT in SCM

The most important role of IT in SCM is reducing the friction in transactions between supply chain partners through cost effective information flow. Secondly , IT is more importantly viewed to have a role in supporting the collaboration and coordination of supply chains through information sharing. Third, IT can be used for decision support. In this instance the analytical power of computers is used to provide assistance to managerial decisions. Instead of consideration the relationship between SCM and ICT as a whole, we suggest to discuss the interrelation between them, from some major components and applications of ICT perspective. The components such as internet (web), e-business, e- internet marketplaces, e-procurement, intranet and extranet. A. Internet (web): The WWW (World Wide Web) provides new channels for product promotion, sales, and distribution with substantial benefits to consumers and producers alike. These new channels change the business ecology in dramatic ways and can make or break existing businesses in a short period of time. Adopting electronic commerce via the Web has become a key strategy to manage the supply chain.We consider that the impact of Internet on SCM comprises one or more of the following aspects: (1) e-commerce: Internet consists on a new commercial channel where firms sell their products and services: New supply chain processes must be defined in order to answer the challenges of this new channel. For example the order fulfillment process, needs activities different from the traditional distribution channels. (2)Information sharing: Internet is the medium to access and transmit data and information among supply chain partners. This flow of information within the supply chain is, in our days, crucial to carry out an effective and efficient collaboration and integration along the supply chain. Internet offers a high-speed and global medium to enable this flow, which given its open nature, has advantages over other information networks, such as VAN14, EDI, etc. One example of this information sharing is the impact of Internet on the procurement process, known as eprocurement. (3)Knowledge sharing: Internet not only enables the supply chain partners to access and share information, but also to access data analysis and modeling to jointly make a better planning and decision making. Knowledge is considered, in the Information Systems Management area, the

result of applying analysis, interpretation and modeling to information. The access to this knowledge will enable companies not only to share information but also to share planning and decision making. This collaboration among firms will lead to cost reductions and a better and faster response to the market. Decision technologies that offer the access to this knowledge, or the tools to obtain it, will become an important issue in the future. One example of this knowledge sharing is the collaborative forecasting. The availability of analytical tools (such as forecasting models) to translate sales data into meaningful knowledge and business intelligence can lead to a rapid decision-making to respond to customer demands. (4)Design an efficient supply chain: Managing communication, collaboration and competition is crucial to ensure a high level of responsiveness and to maintain an effective cost structure of the supply chain. Internet permits to have access to information and knowledge in a faster and inexpensive way, however, this is not enough to ensure responsiveness and efficiency. To achieve them, there is the need to design the supply chain in such a way that it leads to an efficient flow of good. At the other hand, the growth of the Internet has presented supply chains with many significant opportunities for cost reduction and service improvements. These opportunities include: (a) The ability to track shipments using a wide variety of modes including truck, rail, and air transport. (b) On-line vendor catalogs from which buyers can find, select, and order items directly from suppliers without any human contact. (c) The ability to reserve space in public warehouses for anticipated deliveries to market locations. (d) The ability to contact vendors or buyers regarding customer service problems from late deliveries, stock-outs, alterations in scheduled shipment dates, late arrivals, and a wide variety of other service issues. (e) The ability to schedule outbound shipments from private and public distribution centers on a 24-hour basis. (f) The ability to provide 7-day/24-hour worldwide customer service. (g) The ability to receive orders from international customers. (h) The ability to check the status of orders placed with vendors. (i) The ability to place bids on projects issued by government and industry buyers. (j) The ability to pay invoices electronically and to check outstanding debit balances. (k) The ability to notify vendors of changes in configurations in products that are produced to order. (l) The ability to track equipment locations including rail cars, trucks, and material handling equipment. (m) The ability to directly communicate with vendors, customers, etc. regarding supply issues on

a 7-day/24-hour basis via E-mail. (n) The ability to reduce service costs and response time. (o) The ability to schedule pickups and deliveries. (p) The ability to be more responsive to customer service problems. The Internet fosters the integration of business processes across the supply chain by facilitating the information flows necessary for coordinating business activities. However, the Internet also supports the use of market mechanisms, such as auctions, that foster price competition. Using market mechanisms is less likely to generate a sustainable competitive advantage, but they might offer the opportunity to purchase some items at a lower price. Managers have the challenge of selecting the Internet-enabled coordination mechanism that best fits the needs of a variety of business situations in the supply chain. B. e-business: What we now call e-business arose through the proliferation of the internet as a platform for IOS15 in the late 1990s and has been particularly significant for developments in the operation and strategic management of supply chains andnetworks. This is not a surprise, the rise of the internet as a communication channel (and its supporting systems and software) has changed the economics of information, gives rise to opportunities, new forms of affiliation between organisations, new forms of relationship between organisations and new forms of transaction between organisations.A significant theme for research into IOS has focused ontheir impact on governance structures. Employing transaction cost terminology and theoretical construct, much of the IOS literature has explored conditions under which electronic markets and electronic hierarchies exist. Two opposing views have been posited: On one side, Malone et al. for example, argue that since developing inter-organisational electronic networks improves coordination between firms to reduce the costs of searching for appropriate goods and services (which they call electronic brokerage effects), one of the major effects of inter-organizational networks would be a shift from hierarchical to market relationships. On the other side, others have contested that greater collaboration supported by IOS favours the development of electronic hierarchies rather than markets. The impact of e-business on the supply chain is recognized in the information strategy (IS) literature. With the advent of IOS, and e-commerce in particular, it is clear that questions ofalignment go beyond what we have come to know as the business IT alignment issue. It is no longer simply a case of internal alignment alone. Such issues now include alignment with collaborating companies business and IT strategies and customer

requirements (recent heightened interest in customer relationship management).In other words, e-business/e-commerce has a significantimpact on level of analysis issues in management research, specifically broadening the perspective to analysis of supply chains and networks.Some claim that as supply chain integration increases as a result of e-business, stronger relational ties develop betweenthe companies across supply chains. Focusing specifically onthe implication of e-business for supply chain management,they identify potential for improvements arising from adoption of e-business systems in the following areas:(a) Cost performance (from improved productivity and lower input prices);(b) Customer service (service quality); (c) Process capability (quality consistency); (d) Productivity and dependability (from increased control of material flows along the supply chain). For industrial marketers, e-business has triggered a growth in interest in network (rather than dyadic) levels of activity which concentrates decision making on issues of supply chain optimization. We can highlight the contribution of e-business to support value added services to the end customer and improve relationship between customer and supplier. In the fulfillment field, a major impact of e-business is its role as a mechanism for improved control of supply through collaborative planning, forecasting and replenishment. An integrated control system supported by e-business infrastructures allows companies to benefit from reduced inventories, total cost reduction and increased service to customers. According to a recent white paper from the management consultants, e-fulfillment makes it possible to satisfy customers who are demanding more and more in terms of faster service, regardless of geographical location, thus requiring greater efficiency in the distribution process of the product.E-business can thus be seen to impact on supply chain structures; supply chain coordination and supply chain relationships. C. e-procurement: Like Lancioni et al., Presutti posits that the impact of Internet technologies will more than reduce costs, but rather decrease assets on hand and increase revenues. Presutti focuses on the creation of value within the supply chain utilizing e-procurement and supply management. Using the EVA16 model, Presutti provides a conceptual framework or model for firms to use in strategic decisions regarding the deployment of Internet technologies within their supply chain. Assuming Internet technologies are integral to the firms strategic choices, Min and Galle profile adopters and Non-Adopters of e-purchasing in their paper E-Purchasing: Profiles of Adopters and Non-Adopters. The authors surveyed both adopters and Non-Adopters

of Internet technologies to identify relevant contextual variables (organizational readiness, user characteristics, and information infrastructure) that influence firms' adoption decisions. Broadly, this study reveals that firms in information intensive industries are more likely to adopt epurchasing than firms in less information intensive industries. D. Extranet and Intranet: Extranet facilitates information sharing between strategic partners as well as the customers. It connects multiple and diverse organizations online behind virtual firewalls, where those who share in trusted circles can network in order to achieve commercialoriented objectives. It extends the business enterprise to include strategic partners, suppliers,distributors, contracts and others that operate the physicalwalls of the organization but are nonetheless critical to the success of business operations. Security and access privileges are two of the most important issues in Intranet/Extranet. Companies want to link up the computer systems within their organization boundaries as well as outside the boundary but at the same time prevent illegal access. The most common practice is to set a firewall around the company's information system, and sometimes between departments. The firewall proxy server or router programs scrutinize messages from outside the firewall to determine whether they are allowed inside the firewall.Partners of the company are given accounts and passwords toaccess the company's systems via Extranet. There are three justifications for developing an Extranet. (1)The first is to leverage existing investments in informationtechnology. Many companies already have their documents on line and also have Internet access. Some of them have also adopted EDI to coordinate with the channel partners. Bychoosing to deploy an Internet-based application that is already supported by the technology already in use by the partner, companies will avoid a lot of hassles associated with custom clients. (2)Second, because the Internet is governed by standards, any extranet applications developed to these standards will be virtually guaranteed to work with the browsers, reducing the application developing time. (3)Third, it is possible to customize extranet applications to match the business model of individual partners.

This approach reduces the cost to staff human service representatives. Furthermore, these applications are available and accessible on a 24 hours basis, improving customer satisfaction. The components of an Extranet generally include network access, servers, business applications and interface software. Since an Extranet spans multiple remote organizations, Internet connectivity is required among the participants. Connections may be via dedicated Internet lines or dial-up via modem. Extranet servers house the tools required for a successful Web presence which include the functionality's like security, access control, transaction management, site operations, multiple-platform compatibility, deployment versatility and an extensible and scaleable architecture. Business applications provide the functionality for Extranetsto serve as valuable tools for electronic commerce or other collaborative business objectives. Extranet solutions must be extensible enough to include the addition or modification of applications as business goals and objectives evolves. Interface layers are bridges between system software and graphical user presentation that exist within any software product. Effective extranet interfaces address four interactionscenarios: individual, oneto-many, two-way, many-to-many interactions. Three types of extranet models have arisen in generalpractices: (1) Secured Intranet access model(2) Specialized application model (3) Electronic commerce model. The secured Intranet access model allows partners directly into thecorporate Intranet, either through the Internet or via a direct, dial-up connection. This type of Extranet is suitable for strategic partners that are crucial to the enterprise. With the specialized application model, the Extranet is an application developed specifically for partners that may also be part of the Intranet. This type of Extranet is suitable for important partners that are important, though not key to the survival of the enterprise. The electronic commerce model uses electronic commerce techniques to service a partner segment, including similar security architecture and transaction processing. This type of Extranet is suitable when the partners segment contains hundreds of companies. In general extranet applications should be simple and work reliably. Security is imperative as trust may be compromised. A ramification of a breach in security could be far greater than whatever data was lost. The Extranet makes information sharing and customization strategies possible. One of the original reasons for building an Extranet is to link an enterprise to its business partners. By sharing process information such as manufacturing schedule and

production capacity and external information such as consumer demand, an enterprise is able to better coordinate its activities with those of its upstream and downstream partners. The bullwhip effect demonstrates how lack of accurate consumer demand information causes inventory problems thatcompound as orders travel up the supply chain. Extranet also allows low-cost customization for bothconsumers and producers by facilitating information exchange. Consumers are able to initiate customization by selecting information that they are interested in receiving. From the consumer selections, producers are able to construct consumer profiles that allow producers to better design products/services to meet consumer preferences. Extranet facilitates the selection and negotiation activities in the procurement process. E. e-Internet Marketplaces: e-IMPs or IEMPs are defined in terms of participants,using acronyms B (for businesses), C (for consumers), and G(for governmental segments) An IEMP, wherebusiness suppliers sell goods and services to private buyers, isthus a Business-to-Consumer (B2C) IEMP. Examples for B2CIEMPs are Amazon.com, the online bookstore, orLetsbuyit.com. The more widespread IEMP types are B2BIEMPs like Transora, Covisint, and VerticalNet. We definefor our purpose an IEMP as a place on the Internet, wheremany business buyers and suppliers meet, trade, andcollaborate. Our definition excludes EDI, fax, or telephone linkages between two actors as well as simple information exchange, as IEMP is done over portals, search engines, and the Internet itself amongst private customers and governmental institutions. Goldsby and Eckert, in their article Electronic Marketplaces: A Transaction Cost Perspective, investigate the value of ETM18s on supply chain networks, using a TCP19. The authors frame the decision to utilize ETMs as a make (maintain in-house control over transportation procurement) or buy (outsource the transportation procurement) decision and attempt to predict which scenarios are ripe for using ETMs and the most appropriate form of ETM to choose. Those firms that value supply chain relationships are suggested to avoid impersonal ETMs. The success of ETMs is shown to rest on proving that they not only lower administrative costs but also create efficiencies and ease for customers. Similarly, Skjott-Larsen et al., in Electronic Marketplaces and Supply Chain Relationships, present an evaluation of the experience firms have had with on-line exchanges in supply chain management and present new ideas on designing exchanges to fit the types of buyer supplier relationships.

E-SUPPLY CHAIN MANAGEMENT In order to define e-SCM, we need to establish what we understand by SCM, we have adopted the definitions of SCM proposed by Lambert, Cooper et al. For SCM, they suggest to follow The Global Supply Chain Forum. The members of this forum defined SCM in 1998 as the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders. The definition entails a supply chain perspective from first supplier to end-user and a process approach. SCM ideally embraces all business processes cutting across all organizations within the supply chain, from initial point of supply to the ultimate point of consumption.For Cooper, Lambert et al. 1998, SCM embraces the business processes identified by the International Center for Competitive Excellence. We understand by e-SCM the impact that Internet has onSCM. Accordingly, e-SCM will refer to the impact that Internet has on the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders. E-SCM has traditionally been referred to the impact of ecommerce in the logistics activities; however we indicate that ICT has a very important effect on SCM that has been very often forgotten: the coordination and integration aspects. CONCLUSION Traditional way of managing supply chains has changed dramatically over the last decade. Faceto-face management, manual tracking systems, paper-dominated order processing systems, and wired communication links were the primary management tools available to supply chain managers. Today, they are obsolete. The article provides an overview of some of the new tools discussed in this issue, including e-business, electronic internet marketplaces, extranet and intranet, e-procurementand the use of the Internet in managing supply chains. We pondered the impacts of information technology and digitization on supply chain and supply chain management. For this, we studied different components and aspects of ICT and made it easier to see how this components or in fact ICT (as an extent concept) effect the different parts of SCM. This special issue provides managers with ideas on how the ICT can be employed to improve the management of their supply chain systems. The growth of the Internet has presented supply

chains with many significant opportunities for cost reduction and service improvements. Moreover it can be concluded that Internet permits to have access to information and knowledge in a faster and inexpensive way, however, this is not enough to ensure responsiveness and efficiency. To achieve them, there is the need to design the supply chain in such a way that it leads to an efficient flow of goods.

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