Factors Affecting E-supply Chain Performance - Essay Example

Running Head: MANAGING OPERATIONS AND THE SUPPLY CHAIN Managing Operations And The Supply Chain of ManagingOperations And The Supply Chain Quality is a sense of admiration that something is better than something else. Quality changes in a lifetime, and it changes generation to generation, and it varies by facets of human activity. The importance of supply chain management for the quality competitiveness of industrial and services enterprises has been demonstrated by a number of researchers (Tapscott et al., 2000; Zheng et al., 2001). Such a criticality is even more applicable in the case of Tower Records performing e-business strategies, i.e. involved in e-supply chains that are a supply chain in that actors are associated by Internet technologies and/or EDI in a network to purchase, sell, and dispense products or services and to transfer cash flows. In quality improvement teams, employees from the same department, division, or team of the organization brainstorm to identify a list of problems to resolve. The advantage of this approach is that the employees characteristically have the best view of their work environment and associated problems and can develop ideas to improve efficiency and effectiveness. The drawback to this is that the problems chosen by the group may or may not contribute to the Tower Records overall goals. Tower Records with a focused success paradigm can multiply the return on its investment for its quality efforts over an organization without a clear vision. With the myriad of problems any given group can identify, it is important that resources be allocated for problem solving that can contribute positively to the successful implementation of Tower Records strategy. Based on such considerations, it is evident that the need for specific criteria and models to verify the quality fit between the Tower Records and the business atmosphere in that it operates, and to effectively and efficiently manages the relationships among the actors within the network. Such relationships, in fact, are characterised by many-to-many connections instead of more traditional one-to-one. For that reason, a deep revision of current managerial techniques is dramatically requested. Regardless of huge number of works on this subject, (Harland et al., 2001; Lamming et al., 2000), reliable criteria for the analysis and the evaluation of Tower Records networks, based on the relationships among economic actors interconnected through Internet, are not yet available. Accordingly, managers usually operate according to empirical methodologies that often do not assure optimal quality performances. In order to contribute towards the solution of such a problem, preliminarily examined factors that mostly affect the Tower Records quality performances. It may be assumed that effectiveness and efficiency of Tower Records depend on the coherence between the characteristics of the atmosphere in that the embedded actors operate and the way in that relationships among embedded actors are managed. The management of such relationships, consecutively, is based on the following three factors (Cucchiella et al., 2002): The structures adopted to organize the relationships among the actors of the network (Tower Records organisational structures). The criteria adopted to manage such relationships (managerial criteria); and The activities to be carried out for coordinating the relationships (critical activities). With respect to the Tower Records organisational structures, Tapscott et al. (2000) define five types of b-web adopted to manage relationships among embedded actors based on the level of product-service value integration (high vs. low) and control type: Agora, Aggregation, Value chain, Alliance, and Distributive network. According to Nkkentved (2000), the managerial criteria may be instead, defined on the basis of two variables, the market fragmentation and the product/process complexity. Consequently, six types of criteria may be identified: Auction house; Independent trading exchanges; Vendor trading exchanges; Consortium trading exchanges; Private trading exchanges; and Collaborative community exchanges. Finally, Lamming et al., 2000 analysed the critical activities that have to be developed in Tower Records according to the specific business atmosphere in that it is embedded. In this research paper specific reference has been made to the critical activities indicated by Zheng et al. (2001) that are the following: Decision-making, Equipment integration, Human resource integration, Information processing, Motivating, Knowledge capture, Partner selection, and Risk and benefit sharing. These critical activities are determined on the basis of two variables: the leading firm degree of influence and the supply network dynamism. Conversely, the above-mentioned influencing variables that are value integration, control type, product process complexity, market fragmentation, network dynamism, and leading firm degree of influence, are determined by specific dependence parameters. To sum up, each factor Tower Records organisational structures, managerial criteria, and critical activities depends on two influencing variables that, in turn, are influenced by some dependence parameters. Interdependencies among the influencing variables may be thus analysed referring to the dependence parameters. To reach such an objective, it is useful to subdivide the investigated variables into two different groups. The first one is composed by control type, market fragmentation and leading firm degree of influence, and the second one by service value integration, product process complexity and network dynamism. With respect to the first set (control type, market fragmentation, and leading firm degree of influence), it is evident that control type and leading firm degree of influence are both related to the presence of a leading actor and to its role in the decision-making process. At the same time, according to the resource-dependency theory, control type depends on the industry concentration that is the market fragmentation. As a consequence, a strict interdependence among the three variables under investigation seems to exist. Simultaneously, it must be noted that there is no correlation among the dependence parameters related to these variables and those influencing the other three (service value integration, product process complexity and network dynamism). In contrast, parameters influencing on these last three variables appear strictly interdependent. For instance, the value of offered benefits (that influences on service value integration) is tightly connected with the product customisation degree (that influences product process complexity) and to product variety (affecting network dynamism). At the same time, the greater the product customisation degree (that has an effect on product process complexity), the greater the cost of switching supplier (that influences network dynamism). Besides, the market dynamism (that influences on product process complexity) is directly correlated to the innovation frequency (that has an effect on network dynamism) and inversely to the market maturity (that affects network dynamism). Insofar, the other three variables under investigation (service value integration, product process complexity and network dynamism) are strictly connected and all refer to the type of relationships established among actors embedded in the Tower Records. Given the earlier defined groups of variables, it follows that also the factors they influence are interconnected. As a consequence, it may be stated that Tower Records organisational structures, managerial criteria and key activities are closely interconnected. More specifically, it is possible to define four combinations of such factors that result homogenous, coherent and consistent with specific business environment. Tower Records (www.towerrecords.com) enables millions of registered consumers to exchange different kinds of products (such as DVD, video, video games, toys, posters etc.) characterised by a low degree of customisation. As a result, the offered benefit value is quite minute. On the contrary, switching costs - including the time and efforts involved in uploading information on items. Exchange relationships may be implemented according to two methods. Tower Records has not leading role, offering only the electronic platform for the exchanges. As a consequence, relationships among actors embedded in the Tower Records business Web may be schematically. Tower Records can be defined as an Agora. The classification (Agora) is justified by the low level of value integration and the self-organising control. As abovementioned, to verify the coherence of this business Web with the factors in the lower left quadrant of the proposed model, the consistency of Tower Records with the following critical activities must be proved: motivating, risk and benefit sharing, equipment integration and information processing. The relevance of partners' motivation activity is supported by the total absence of a leading company, being Tower Records. Such motivation is partially based on the Feedback Profile Service, a utility within the business that allows customers to check information concerning all buyers and sellers that have been realised exchanges since the foundation of this business Web. At the same time, the adopted exchange mechanisms allow to share the risk among consumers and on the central actor. Finally, the huge number of potential customers and effected transactions ask for an efficient and effective data management system. Based on the earlier discussion, the coherence among the three factors belonging to the lower left quadrant of the proposed model is confirmed. At the same time, information prior analyzed permit to state also that the levels of the two-macro variables (internal integration and decision-making concentration degrees) are both low. Consequently, the coherence among the three factors under discussion and their relative macro variables are verified. The relevance of Tower Records supply chain management for the creation of a sustainable quality advantage is generally recognized. On the other hand, to implement an effective Tower Records supply chain - and especially an electronic supply chain - a deep reorganization of relationships with partners embedded in the network is significantly requested. Notwithstanding the huge number of research works in the Tower Records supply chain field, a lack was identified with respect to the definition of suitable integrated global frameworks for the management of Tower Records supply chain. As a result, in this research paper, a model that can be used to analyse and evaluate the quality performances in Tower Records industries has been described and tested. Bibliography Cucchiella, F., Fratocchi, L., Pelagagge, P.M., Scacchia, F. (2002), "Analysis of factors affecting e-supply chain performance", Journal of International Technology and Information Management, Vol. 11 No.2, pp.51-62. Harland, C.M., Knight, L.A., Sutton, R.Y. (2001), "Information for supply interventions: sector, network and organization opportunities from network and organization opportunities from E-commerce", paper presented at the 10th International Annual Conference of International Purchasing and Supply Education and Research Association, Jnkping, 8-11 April. Lamming, R., Johnsen, T., Zheng, J., Harland, C. (2000), "An initial classification of supply networks", International Journal of Operations & Production Management, Vol. 20 No.6, pp.675-91. Nkkentved, C. (2000), "Collaborative processes in e-supply network", Center for Applied Management Studies, Denmark. Tapscott, D., Ticoll, D., Lowy, A. (2000), Digital Capital - Harnessing the Power of Business Webs, Harvard Business School Press, Boston, MA. Zheng, J., Johnsen, T.E., Harland, C.M., Lamming, R.C. (2001), "A taxonomy of supply networks", paper presented at the 10th International Annual Conference of International Purchasing and Supply Education and Research Association, Jnkping, 8-11 April. Read More