E-Supply Chain Management - Essay Example

More and more firms accelerate to implement their supply chains in a web-based manner in an effort to lower their operating costs and attain a fast response to the market condition changes. However, this framework considers primarily two factors of the organizational ability to integrate their external partners and the complexity of operation, which are natural in a market-centric economy. In a transitional economy where a centrally planned economy moves toward that of a free market, the government influence is a factor that cannot be ignored.

Another important factor is the information asymmetry that will be discussed later. The organizational ability to integrate with their external partners is the common factor used in both frameworks. We use the information asymmetry instead of the complexity of operations and the new factor of government influence. (Panta, 2003, 205) Toyota Motor Manufacturing UK Ltd is one among many Japanese automotive manufacturers which lays claim to be at the forefront of these new specific developments in customer-supplier relationships (see for instance Mair, 1994; Wickens, 1987).

Toyota now has 210 suppliers in 11 European countries, of which 50 per cent (by value and number) are UK-based. As production moves up to the projected full capacity of 225,000 units per year, the value of the supply chain is estimated to reach 880 million by 1999. Toyota Motor Company, with its emphasis on lean production, efficiency and quality, is seen by many to be an exemplary model of best practice for other firms to follow. Firms joining the Toyota supply chain will fully expect to become converts to the Toyota production method and the social demands of obligational contracting ways (Winfield and Kerrin, 1996).

Customer influence examinedThe influence of a major customer on a supplier can and does have far-reaching measurable effects. Harland (1996) draws attention to the importance of the "softer" behavioural features of supplier-customer relationships, such as the attitudes, expectations and perceptions held by both parties, which can have profound implications for the actual success of the partnership. He also suggests rather tantalizingly that these changed behaviours within the contracting partnership can have direct effects on other aspects of organization-wide behaviour within the supply firm.

Toyota claims in particular to encourage close partnering with suppliers; extending even to encouraging suppliers to participate in parts design (Ohno, 1988). Toyota will even offer advice and financial assistance to its suppliers who need to upgrade their production to meet the demands of quality and the JIT manufacturing system. Help is also freely given with the design of training and with management development programmes. All this takes place within the social boundaries of frequent company visits, an atmosphere of long-term trust and of a partnership based on mutual prosperity.

In selecting suppliers, Toyota places emphasis not simply on product quality and future ability to meet the just-in-time production demands; but also it seems, on more subtle cognitive and social variables. These