Integration of E-Supply Chain Management in a Web-Based Environment Abstract
Organizations today are plagued by multitude of issues and problems based on the changing business environment. The emergence of globalization, for example, has motivated organizations to become current with existing technologies, improved processes and business models in order to compete effectively in the global marketplace. In the manufacturing industry, eSCM and ERP are two of the most sought after phenomenon, which are driving organizations to transition onto new operational systems. However, integration is not an easy process. It involves consideration for change at the business, technical and application level. It involves costs of implementation. And it involves taking risks in the new systems. These aspects provide a very dubious picture for the supplier. This is why the researcher has carried out the following research to establish that eSCM and ERP integration is possible for organizations, if they carefully simulate the process. The long-term benefits outweigh the risks taken for implementation. Through case studies and theoretical framework, the researcher proposes that ERP and eSCM integration is not only an option but an imperative for today’s organization to effectively migrate online and compete in the global marketplace.
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Traditionally, buyer-supplier relations are based on market mechanisms, competition for customers and profit margin. Over the years, this relationship has given way to partnership through direct cooperation agreement and profitability (Swamidass 2002). In the last decades of the 20th century, organizations have evolved further to improve on supplier performance and profitability through series of process change, integration, and improvement in technologies. Improvement in this manner has often been controversial as it means changing business structure and developing Information Technology (IT) infrastructure (Themistocleous and Corbitt 2006). According to Hammer and Champ (1993), process integration is difficult as it involves changing control, ownership, structure, culture and responsibility. Although, the resulting integrative system offers strategic and operational control, it leaves management with the difficult task of managing material and information in a dynamic business environment.
To resolve, the concepts of Materials Requirements Planning (MRP) and Manufacturing Resources Planning (MRP II) have emerged with focuses on the key drivers of manufacturing processes. According to Kakouris and Polychronopoulos (2005), MRP and MRP II are concepts that support production integration including planning, scheduling, shop floor control, inventory and the production department’s connection with other functions of the organization. This has been the beginning of Supply Chain Management.
Supply Chain Management (SCM) is the management of production function and its distribution through a chain of processes. SCM complements the trend of integration and elimination of barriers of communication and cooperation among partners in the supply chain (Fawcett 2002). Today, Kilner (2006) points out that SCM is becoming large-scale and more complex. Companies are burdened with the task of responding to customers,
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