E-Business Technologies and Change Management: How do they bring a standard desired supply chain outcome?

The implementation of e-business technologies such as ERP, MRPI, MRPII, E2E and SCM BPO encourage supply chain-wide visibility and the creation of big data.

Despite its benefits, the associated cost of unsatisfactory e-business technology implementation with seemingly contradictory results achieved by companies creates an interesting dilemma.

The question is around the standardisation of e-business implementation (which does not seem to achieve desired outcomes) despite the tailoring to individual supply chain needs. A study on e-business-enabled transformation in European automotive supply chains (Bak 2017) highlighted two main areas that might be the culprit of supply chain change management:

• the need to assess the supply chain ecosystem
• creating a shared understanding of e-business technology choice
  
  

Assessing the supply chain ecosystem

Supply chains can be seen as an ecosystem that is connected through processes. This connection generates the question: To what extent will supply chain members be involved in e-business technology implementation? The empirical evidence from four European automotive supply chain ecosystems suggests three key challenges:

• Definition. The empirical results indicated that a supply chain ecosystem is challenging to define, and adding the process and resources variances across supply chain members may result in a varied range of implementation timescales across supply chains.
  
  
• Focus. Supply chain ecosystems need to focus on the differences in operations, processes and resources. The study highlighted that e-business technology did not impact every supply chain member, even individual departments at the same level. Hence, e-business implementation requires regulated interactions and a balance between the resource needs and system-level demands of supply chain members.
  
  
• Reorganization. The presence of variety in the supply chain, despite creating a challenge in the short term, has the tendency to reorganize and stabilize the supply chain in the long run. Hence, encouraging a standard time frame may not be a feasible strategy for the supply chain, as the e-business technology may require a range of new tools, systems and equipment updates, training and processes in different levels.
  
  

Creating a shared understanding of e-business technology choice

The reasons for using a particular technology need to become transparent throughout the supply chain. In the study, where the technology was led and chosen by senior management, the research indicated more resistance to change by supply chain actors and even indicated a lack of shared vision and commitment, with most members having difficulty understanding the reasons and investments behind such transformation.

In comparison, when supply chain actors understood and defined the specific need, the level of commitment and shared vision was present. Similarly, supply chain actors with incompatible systems and diverse strategic objectives are difficult to integrate. The study highlighted instances of increased likelihood to encourage commitment and collaboration when individual e-business technologies with similar impact patterns were driven by the need rather than by the vision at the feasibility stage.

When it comes to resilience, the supply chain ecosystem needs to conserve the management system. The management team needs to include not only the e-business agenda milestones into their planning, but also account for dynamic characteristics of supply chain ecosystems in generating a more flexible, adaptive and resilient supply chain.

The speed of e-business technology implementation may differ despite the industry best practices and can also dictate potential timelines for implementation stages. Despite similar industry settings, the results may vary. E-business technology implementation needs to involve a full understanding of the adaptive processes that may take place, which may require new competencies and resources. The study further explains the variances across supply chains and why e-business technologies don’t bring a standard desired supply chain outcome.

References:

Bak, O (2017) ‘Assessing the E-business technology impact: how companies are transforming their supply chain through utilizing e-business technologies’. In: BAM 2017, 5th-7th September 2017, University of Warwick, UK

To get practical applications of e-business technologies for supply chains and get your company started on them, get E-Business and Supply Chain Integration here.