Successful supply chain processes require a high degree of supply chain integration

supported by the integrated information systems

1. Introduction
Supply Chain Management (SCM) has been an important and emergent phenomenon among
business organisations. Companies and business organisations have started to undergo a
revolution by implementing new supply chain operation strategies and technologies in
response to the new demands and challenges of the 21 st century . According to an expert WalMarts approach to logistics in retail as been considered as more innovative and successful,
when compared to the invention to transistors . With the invent of technology and new
operations of innovations, different high degree supply chain processes have come up. Never
have been so much brainpower and technology been applied to improve the performance of
supply chain. According to well integrated supply chains is considered as one of the primary
business strategies for improving the supply chain performance. For example, for improving
a supply chain management performance through lowering cost, providing appropriate
feedback, improved reliability, shortening delivery time and maintaining low inventory cost.
Therefore an increasing attention has been placed on high degree supply chain integration
technologies using the information systems.

Supply Chain

With liberalisation and globalisation into effect, modern industrialized organisations and
societies are characterised by the new products, growing customer needs, products getting
more complex, stringent government regulations and complex processes. Supply chain is
termed as the processes which link initial raw materials to the finished product across the
supplier-user companies. For companies to grow and prosper in a supply chain processes,
different information systems should support these supply chain processes. Globalisation of
supply chain has created abundant opportunities for call centres, service providers and
manufacturers, and they can be located virtually anywhere we go. Despite the progress of
supply chain in a large scale, managing the informations present effectively and in a timely
manner has been a higher priority . According to a study conducted by system integration is
considered a very important agenda for many organisations, believing integration is either
mandatory or a key enabler for addressing mission critical activities.

Example of successful supply chain

Gartner supply chain is ranked amongst the top 25 successful supply chains in the world with
its global shippers managing the best logistics and supply chain management programmes
around the world. The research statistics of Gartner shows that the four key trends in the
recent years are: supply chain resiliency, return to growth, multilocal operations and
simplification. Various organisations have started to upgrade their network managing
capabilities and supply chain visibilities for maximising their success in supply chain.
Another example of successful supply chain is of Dell, which have been evolving from its

single supply chain of blazing fast, configure to order to a model based on customer
segmentation. Wal-Marts are considered the market leaders in supply chain process primarily
due to its efficient integration of manufacturing, suppliers, distribution and warehousing to
store. The supply chain strategy adopted by Wal-Mart is almost the same as that of Gartner
with four key components cross docking and distribution management, integration, vendor
partnerships and technology.
2. Supply chain integration
Integration is considered as one of the core of supply chain management, both among the
practitioners and the academic experts. Integration of process in a supply chain management
is implemented from sourcing to manufacturing, and to distribution across the supply chain.
Integration is considered the main aspect of supply chain as many separate parties work
together in a collaborative co-operative manner to arrive at mutually outcome results. Supply
chain with the integration of resources from sourcing to distribution is well knitted with a
collaborative effort to make it highly successful; it requires both internal and external
collaboration to achieve the output. According to the three main supply chain strategies that
impact in the supply chain integration are operations capability, information technology
capability and marketing capability.
2.1 Operation Capability
Operations play an important and crucial role in the supply chain integration process to
support successful supply chains. Integration of these supply chains is considered as strategic
importance and is viewed as part of the core business logistics, operations and supply chain
management. Operations functions are mainly responsible for order fulfilment,
manufacturing, procurement, planning, and product development and return processes for a
supply chain. It is therefore considered as a main prerequisite for a successful supply chain
integration process. According to in his work has stated that a firms operational performance
is determined by the extent of suppliers consistency in delivering raw materials, goods,
products to the manufacturing industry on time and in good condition and the performance of
the supplier is determined by its flexibility of delivery, reliability of the delivered goods,
innovation, cost leadership and product quality. Many big firms like Hewlett-Packard (HP),
General Mills have integrated their operations with those of suppliers for a successful supply
chain process.
2.2 Information Technology Capability
Innovation enabled information technology are creating new creative ways for managing the
supply chain, while able to manage supplier chain relationship. IT allows communication,
co-ordination and easy to access with each other; it is considered the backbone of the supply
chain business structure which is used to acquire, process and share information about the
supply chain partners for effective decision making . Organisations have started to invest
more money in information technology capabilities of supply chain in order to improve their
agility that enables the development of a higher level of supply chain capabilities and
increasing the performance of the supply chain .

2.3 Marketing Capability

Marketing capability is considered as one of the most important aspect in supply chain
integration, which affects the performance of the supply chain. According to suggests that
marketing has a strong influence for the supply chain management firms and inter-firm
relationships. Marketing philosophy guides customer for satisfaction at a profit in a
coordinated manner. Market orientation is considered an organisational culture that produces
outstanding performances in the supply chain integration technologies through its
commitment of creating superior value for customers, which includes three main behavioural
concepts (1) competitor orientation, (2) customer orientation, (3) inter-functional
coordination.
3. Information Technology
Information technology has been an important and effective application in the integration of
supply chain activities. Most of the successful supply chain global companies have IT support
in their supply chain to help the moment of goods and services easier and faster, with the
level of complexity increasing in supply chain there is more and more demand of information
systems. The bullwhip effect is an example of a typical supply chain management, in which
key factors of a supply chain management such as time and supply of order decisions, lack of
communications, demand for the supply and disorganisation can result in one or more of the
most common supply chain management problems . The distortion of demand information
implies that the manufactures have been misled by the amplified design patterns, and has
caused serious cost implications on their supply chain. This could be achieved through
improvement in the information flow design and systems to be developed. Advances in the
internet technologies and softwares have affected in the success of supply chain processes.
There have been a large number of software applications being developed which helps in the
better flow of information systems throughout the supply chain: ERP (Enterprise Resource
Planning) systems; warehouse management systems for managing the inventory, stocks and
goods; demand and management systems for planning, managing and monitoring the
forecasts; transport management system for managing the planning and dispatch of
shipments; order management systems for managing the order fulfilment process; customer
relationship management for managing the managing the customers and providing customer
services and support; data warehousing applications are able to analyse, store and report
corporate data stored in many different systems .

4. Impacts of Supply Chain Integration

Information systems play an important role in the integration of supply chain processes. The
main purpose of Integrated Information System is to integrate information systems into
supply chain processes and prioritize them into three levels of supply chain integration
operational, strategic and infrastructural. The integrated information systems help

organisations to save cost, information system investments and unimportant information

system practises. The impact of information systems on supply chain is very huge combined
with other supply chain parameters.
4.1 Operational Performance
Operational performance impact supply chain process in a huge as supply chain management
brings in the work of supplier, distributor and customer into one cohesive process. The
manufacturers, suppliers, retailers, transporters, warehouse and customers are involved in this
dynamic chain process of constant flow of information, products and funds. High frequent
flow of these informations within the organisation and supply chain make the delivery
process more stable and reliable. According to the success of the supply chain process lies in
the effective integration of suppliers with their manufacturers for achieving improvements in
operation. For example, the studies shows that the integrated operational systems in supply
chain in the current constructional industry especially in England provides much efficient
differences in the fields from designing to execution of civil projects. The companies had to
suffer in the huge projects in Iran like countries whereas they have accepted an integrated
system now to synchronise the activities at the operational level.
5. Effects of E-procurement in supply chain
E-business has a significant impact on the level of analysis in management
research specifically in supply chain management. With the diversity of definitions is to
concentrate on some of the core processes and functions related to the management of supply
chains using information systems namely sales and marketing, operations planning,
logistics, warehousing, distribution and procurement. According to cost performance, process
capability, customer service and productivity and dependability are considered as some of the
potential important parameters arising from the adoption of e-business systems in supply
chain. Cost performance deals with improved productivity of the goods being produced at
very lower input prices, process capability dealt with consistent quality of the good and the
process, customer service is the service quality in which excellent service could increase the
production of goods produced and the last parameter helps in increasing the control of
material flows along the supply chain.

The Figure 2 shows the effects of e-procurement over supply chain integration and how
integrated information systems help in the e-business for minimising the cost and increasing
the productivity. The supply chain e-procurement is mainly divided into three main groups:
strategic procurement, operational functions and supplier management. In this the strategic
procurement and supplier management always tries to increase or maximise the purchasing
function, as it relates to specific actions that the purchasing function takes to achieve its
objective and oversees the process of implementing, evaluating and controlling strategic and
operating purchasing decisions . At operational level the main expected is to provide for the
firms procurement needs by delivering on-time services and high-quality deliverables at
lower prices. Most of the firms that invested in e-commerce technologies have aimed at
producing optimal results; a better supply chain performance can be achieved in terms of
inventory reduction, better forecasting, and a reduction in-out of stocks, promotion planning
and higher speed of new product development which have adopted to improve customer
satisfactions.
5.1 Electronic Hub
Recently, e-hubs have received attention in supply chain for streaming and structuring the
process of supply chain by increasing the efficiency. This electronic network would be used
to create the interaction between the trading partners and its fragmentation nature would
induce a competition between the buyers and sellers even though they are geographically
dispersed. Altra Energy Technologies, Inc PlasticsNet.com and Sciuest.com are the top rated
e-hubs in the market. It always ensures the accuracy in the delivery, increasing the efficiency
of the supply. The ubiquity of the internet also helps the small companies to take part in the
current business competitions enabling them to enlarge the market.
5.2 Electronic Business and Commercial Trucking Industry
The new methods have reached up to a level where a stakeholder company in United States,
Drivewyze, has introduced global positioning satellites, mobile apps and wireless
communications concentrating on the mobility, visibility and connectivity for the trucks

which make an easy supply chain for both the stakeholder and the receiver. Usually the
supply of the goods depends upon the logistics methods and transportation, also to the
warehousing and distribution, where the electronic application in the distribution and
trucking makes the supply easier than before.
6. Information Technology in Logistics
The functional enabler of integrated logistics is information system where it manages the cost
effectively and provides high level of customer services. The integrated applications of
software and highly advanced decision support systems always ensure timely and accurate
data. Not only the centralized control and framework but also the local operations be taken
care of to utilise the technologies. Nowadays with the incorporation of information
technology, logistics can actually integrate the organisation whether its centralised or
decentralised within the organisation, geographically oriented or product oriented. Also it
boosts the standardisation of the products from packaging, labelling and precise fulfilment.
So in a company the integration of logistics and information technology include both
hardware and software communication technology and basic changes in the business where
the new technology creates a new information given integrated logistics.
7. Obstacles in supply chain process integration
Some of the common obstacles in the path of successful supply chain integration that hinders
to the performance management are formulated below
7.1 Supplier relationship obstacles
Supplier should have a strong relationship with the
manufacturers and other respondents, so that there is no lack of trust in a relationship, they
should have different goals and perspectives.
7.2 Lack of trust
Suppliers and customers should have a long term habit of trust among
themselves for the supply chain operational to be successful. Trust between the organisations
should be operationalized. Several studies have shown that trust is an important driver in
supply chain integration.
7.3 Different goals and priorities
A supply chains performance depends upon the joint performance of all its
members and firms management combined effort, even though each individual firm works
on its individual goals and objectives have different share values as well, to link different
firms objective and missions into together leads to the success of the supply chain.
7.4 Proper data management
Data management is an important aspect in a supply chain and most studies
reveal that information system capabilities provide important platforms for coordination and

integration of the data provided by supply chains. Proper management of data should be done
otherwise it will lead to poor intra-organisational information integration.
8. Conclusion
Effective delivery of goods and services to the customer at right price, in the
right place and at the right time will result in good business for each link of the supply chain.
This effective collaboration with all the partners and proper planning of resources could lead
to a successful supply chain. A successful supply chain strategy consists of prioritised set of
objectives and a balanced set of appropriate measures, which are made operational in a
systematic way. IT plays as an essential ingredient and backbone of the integrated supply
chain, as it has been shifted its role from back office to strategic, operational and internal
levels. Altogether the integrated information technology has facilitated the internal
coordination as well as the external communication of the company with the customers and
suppliers, also supports the decision making process in the company.

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