Adopting New Technologies for Supply Chain Management
Transportation Research Part E 39 (2003) 95–121 www.elsevier.com/locate/tre Adopting new technologies for supply chain management
Kirk A. Patterson a, Curtis M. Grimm b, Thomas M. Corsi a c,*
c
Department of Operational Sciences, Graduate School of Engineering and Management, Air Force Institute of Technology, USA b Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA
Abstract Integration of supply chain activities and the technologies to accomplish it have become competitive necessities in most industries. Accordingly, the trend toward greater use of supply chain technologies is on a clear path forward. As one manager has noted: ‘‘With almost daily technology advancement globally in every facet of the business, organizations need to synchronize by adopting and implementing new electronic commerce and supply chain technology in order to protect market share, not to mention improve market penetration’’. This paper develops a model of the key factors influencing the adoption of supply chain technology. The following set of variables were hypothesized to have a significant impact upon the pace of technology adoption: firm size, organizational structure, integration of supply chain strategy with overall corporate strategy, past financial performance, supply chain partner pressure, transaction climate and environmental uncertainty. The model provides a better understanding of the supply chain technology diffusion process. The paper also includes a survey, which has been developed to test the model. Ó 2003 Elsevier Science Ltd. All rights reserved.
Keywords: Supply chain management; Technologies
1. Introduction Business organizations today face a more complex and competitive environment than ever before (Ellram, 1991; Srinivasan et al., 1994; Porter and Stern, 2001). As trade barriers crumble and less
Kirk A. Patterson a, Curtis M. Grimm b, Thomas M. Corsi a c,*
c
Department of Operational Sciences, Graduate School of Engineering and Management, Air Force Institute of Technology, USA b Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA
Abstract Integration of supply chain activities and the technologies to accomplish it have become competitive necessities in most industries. Accordingly, the trend toward greater use of supply chain technologies is on a clear path forward. As one manager has noted: ‘‘With almost daily technology advancement globally in every facet of the business, organizations need to synchronize by adopting and implementing new electronic commerce and supply chain technology in order to protect market share, not to mention improve market penetration’’. This paper develops a model of the key factors influencing the adoption of supply chain technology. The following set of variables were hypothesized to have a significant impact upon the pace of technology adoption: firm size, organizational structure, integration of supply chain strategy with overall corporate strategy, past financial performance, supply chain partner pressure, transaction climate and environmental uncertainty. The model provides a better understanding of the supply chain technology diffusion process. The paper also includes a survey, which has been developed to test the model. Ó 2003 Elsevier Science Ltd. All rights reserved.
Keywords: Supply chain management; Technologies
1. Introduction Business organizations today face a more complex and competitive environment than ever before (Ellram, 1991; Srinivasan et al., 1994; Porter and Stern, 2001). As trade barriers crumble and less
References: Ahmad, S., Schroeder, R.G., 2001. The impact of electronic data interchange on delivery performance. Production and Operations Management 10 (1), 16–30. Audia, P.G., Locke, E.A., Smith, K.G., 2000. The paradox of success: an archival and a laboratory study of strategic persistence following radical environmental change. Academy of Management Journal 43 (5), 837–853. Bouchard, L., 1993. Decision criteria in the adoption of EDI. In: Proceedings of the Thirteenth International Conference on Information Systems, Orlando FL, pp. 365–376. Bowersox, D.J., Daugherty, P.J., 1995. Logistics paradigms: the impact of information technology. Journal of Business Logistics 16 (1), 65–80. Bowersox, D.J., Calantone, R.J., 1998. Executive insights: global logistics. Journal of International Marketing 6 (4), 83–93. Bradley, P., Thomas, J., Gooley, T., Cooke, J.A., 1999. Technology will play larger logistics role. Logistics Management and Distribution Report 38 (5), 28–29. Cash Jr., J.I., Konsynski, B.R., 1985. Is redraws competitive boundaries. Harvard Business Review 63 (2), 134–142. Cavinato, J.L., 1999. A general methodology for determining a fit between supply chain logistics and five stages of strategic management. International Journal of Physical Distribution & Logistics 29 (3), 162–180. Chandler, A.D., 1962. Strategy and Structure. Wiley, New York, NY. Clemons, E.K., McFarlan, F.W., 1986. Telecom: hook up or lose out. Harvard Business Review 64 (4), 91–97. Clemons, E.K., Row, M.C., 1991. Sustaining IT advantage: the role of structural differences. MIS Quarterly 15 (3), 275–292. Clemons, E.K., Croson, D.C., Weber, B.W., 1996. Market dominance as a precursor of a firmÕs failure: emerging technologies and the competitive advantage of new entrants. Journal of Management Information Systems 13 (2), 59–75. K.A. Patterson et al. / Transportation Research Part E 39 (2003) 95–121 119 Clemons, E.K., Row, M., 1988. McKesson Drug Company––a case study of economost a strategic information system. Journal of Management Information Systems 5 (1), 36–50. Clemons, E.K., Hann, I.-H., 1999. Rosenbluth International: strategic transformation of a successful enterprise. Journal of Management Information Systems 16 (2), 9–27. Cragg, P., King, M., 1993. Small firm computing: motivators and inhibitors. MIS Quarterly 17 (1), 47–60. Cyert, R., March, J., 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ. DÕAveni, R., 1994. Hypercompetition: Managing the Dynamics of Strategic Maneuvering. The Free Press, New York. DÕAveni, R., 1999. Strategic supremacy through disruption and dominance. Sloan Management Review 40 (3), 127–135. Damanpour, F., 1991. Organizational innovation: a meta-analysis of effects of determinants and moderators. Academy of Management Journal 34 (3), 555–590. Daugherty, P.J., Germain, R., Droge, C., 1995. Predicting EDI technology adoption in logistics management: the influence of context and structure. Logistics and Transportation Review 31 (4), 309–324. Dawe, R.L., 1994. An investigation of the pace and determination of information technology use in the manufacturing materials logistics system. Journal of Business Logistics 15 (1), 229–260. Dewar, R.D., Dutton, J.E., 1986. The adoption of radical and incremental innovations: an empirical analysis. Management Science 32 (11), 1422–1433. Droge, C., Germain, R., 1998. The design of logistics organizations. Transportation Research Part E. Logistics and Transportation Review 34 (1), 25–37. Dwyer, F.R., 1980. Channel member satisfaction: laboratory insights. Journal of Retailing 56, 51–61. Egelhoff, W.G., 1988. Strategy and structure in multi-national corporations: a revision of the stopford and wells model. Strategic Management Journal 9 (1), 1–14. Ellinger, A.E., Daugherty, P.J., Gustin, C.M., 1997. The relationship between integrated logistics and customer service. Transportation Research Part E, Logistics & Transportation Review 33 (3), 129–138. Ellram, L.M., 1991. Supply chain management: the industrial organisation perspective. International Journal of Physical Distribution and Logistics Management 21 (1), 13–22. Ettlie, J.C., 1983. Organizational policy and innovation among suppliers to the food processing sector. Management Science 30, 572–585. Ettlie, J.E., Bridges, W.P., OÕKeefe, R.D., 1984. Organizational strategy and structural differences for radical versus incremental innovation. Management Science 30 (6), 682–695. Feitler, J.N., Corsi, T.M., Grimm, C.M., 1998. Strategic and performance changes among LTL motor carriers: 1976– 1993. Transportation Journal 37 (4), 5–12. Galunic, C.D., Eisenhardt, K.M., 1994. Renewing the strategy structure-performance paradigm. In: Staw, B.M., Cummings, L.L. (Eds.), Research in Organizational Behavior 16, 215–255. Garten, J.E., 1998. Why the global economy is here to stay. Business Week 23, 21. Gatignon, H., Robertson, T., 1989. Technology diffusion: an empirical test of competitive advantage effects. Journal of Marketing 53, 35–49. Germain, R., 1993. The adoption of logistics process technology by manufacturers. Journal of Business Research 27 (1), 51–64. Germain, R., Droge, C., Daugherty, P.J., 1994. A cost and impact of typology of logistics technology and the effect of its adoption on organizational practice. Journal of Business Logistics 15 (2), 227–248. Gilmour, P., 1999. Benchmarking supply chain operations. International Journal of Physical Distribution and Logistics 29 (4), 259–266. Grover, V., 1993. An empirically derived model for the adoption of customer-based interorganizational systems. Decision Sciences 24 (3), 603–640. Grover, V., Goslar, M.D., 1993. The initiation, adoption, and implementation of telecommunications technologies in US organizations. Journal of Management Information Systems 10 (1), 141–160. Gustin, C.M., Daugherty, P.J., Stank, T.P., 1995. The effects of information availability on logistics integration. Journal of Business Logistics 16 (1), 1–21. Hitt, L.A., Brynjolfsson, E., 1996. Productivity, business profitability, and consumer surplus: three different measures of information technology value. MIS Quarterly 20 (2), 121–142. Iacovou, C.L., Benbasat, I., Dexter, A.S., 1995. Electronic data interchange and small organizations: adoption and impact of technology. MIS Quarterly 19 (4), 465–485. 120 K.A. Patterson et al. / Transportation Research Part E 39 (2003) 95–121 Kohn, J.W., McGinnis, M.A., 1997. Logistics strategy: a longitudinal study. Journal of Business Logistics 18 (2), 1–14. Konsynski, B.R., McFarlan, W.F., 1990. Information partnerships – shared data, shared scale. Harvard Business Review 68 (5), 114–120. Kwan, A.T.W., 1999. The use of information technology to enhance supply chain management in the electronics and chemical industries. Production and Inventory Management Journal, Third Quarter, 7–15. Kwon, T.H., Zmud, R.W., 1987. Unifying the fragmented models of information systems implementation. In: Boland, R.J., Hirschheim, R.A. (Eds.), In Critical Issues in Information Systems Research. John Wiley, New York, pp. 247– 252. La Londe, B.J., Masters, J.M., 1994. Emerging logistics strategies: blueprints for the next century. International Journal of Physical Distribution and Logistics Management 24 (7), 35–47. Lambert, D.M., Cooper, M.C., Pagh, J.D., 1998. Supply chain management: implementation issues and research opportunities. The International Journal of Logistics Management 9 (2), 1–19. Lant, T.K., Milliken, F.J., Batra, B., 1992. The role of managerial learning and interpretation in strategic persistence and reorientation: an empirical investigation. Strategic Management Journal 13, 585–608. Lee, H.L., Padmanabhan, V., Whang, S., 1997. The bullwhip effect in supply chains. Sloan Management Review 38 (3), 93–102. Levary, R.R., 2000. Better supply chains through information technology. Industrial Management 42 (3), 24–30. Lewis, I., Talalayevsky, A., 1997. Logistics and information technology: a coordination perspective. Journal of Business Logistics 18 (1), 141–157. Lovelace, K., Shapiro, D.L., Weingart, L.R., 2001. Maximizing cross-functional new product teamsÕ innovativeness and constraint adherence: a conflict communications perspective. Academy of Management Journal 44 (4), 779–793. McGowan, M.K., Madey, G.M., 1998. The influence of organization structure and organizational learning factors on the extent of EDI implementation in US Firms. Information Resources Management Journal 11 (3), 17–27. Merrifield, D.B., 2000. Changing nature of competitive advantage. Research Technology Management 41 (1), 41–45. Miller, D., Chen, M.-J., 1994. Sources and consequences of competitive inertia. Administrative Science Quarterly 39, 1–23. Monczka, R.M., Petersen, K.J., Handfield, R.B., Ragatz, G.L., 1998. Success factors in strategic supplier alliances: the buying company perspective. Decision Sciences 29 (3), 553–577. Nimdumolu, S., 1995. Interorganizational information systems and the structure and climate of seller-buyer relationships. Information and Management 28 (2), 89–105. Norris, R.C., 1988. The ADL grocery report revisited. EDI Forum, 44–48. Olavarrieta, S., Ellinger, A.E., 1997. Resource-based theory and strategic logistics research. International Journal of Physical Distribution and Logistics Management 27 (9/10), 559–587. Pierce, J.L., Delbecq, A.L., 1977. Organization, structure, individual attitudes and innovation. The Academy of Management Review 2 (1), 27–37. Porter, M.E., Stern, S., 2001. Innovation: location matters. MIT Sloan Management Review 42 (4), 28–36. Prahalad, C.K., Bettis, R.A., 1986. The dominant logic: a new linkage between diversity and performance. Strategic Management Journal 7 (6), 485–501. Premkumar, G., Ramamurthy, K., 1995. The role of interorganizational and organizational factors on the decision mode for adoption of interorganizational systems. Decision Sciences 26 (3), 303–336. Premkumar, G., Ramamurthy, K., Crum, M.R., 1997. Determinants of EDI adoption in the transportation industry. European Journal of Information Systems 6 (2), 107–121. Reekers, N., Smithson, S., 1994. EDI in Germany and UK. European Journal of Information Systems 6 (2), 161–172. Reve, T., Stern, L.W., 1986. The relationship between interorganizational form transaction climate and economic performance in vertical interfirm dyads. In: Marketing Channels-Relationships and Performance. Lexington Books, Lexington, MA. Riggins, F.J., Mukhopadhyay, T., 1994. Interdependent Benefits From Interorganizational Systems. Journal of Management Information Systems 11 (2), 37–57. Robertson, T.S., Gatignon, H., 1986. Competitive Effects on Technology Diffusion. Journal of Marketing 50, 1–12. Rogers, D.S., 1990. An investigation of information technology adoption: the impact of logistics structure and strategy. Ph.D. Dissertation, Michigan State University. K.A. Patterson et al. / Transportation Research Part E 39 (2003) 95–121 121 Rogers, D.S., Daugherty, P.J., Stank, T.P., 1992. Enhancing service responsiveness: the strategic potential of EDI. International Journal of Physical Distribution and Logistics Management 22 (8), 15–20. Srinivasan, K., Kekre, S., Mukhopadhyay, T., 1994. Impact of electronic data interchange technology on JIT shipments. Management Science 40 (10), 1291–1304. Stank, T., Crum, M., Arrango, M., 1999. Benefits of interfirm coordination in food industry supply chains. Journal of Business Logistics 29 (2), 21–41. Stock, G.N., Greis, N.P., Kasarda, J.D., 1999. Logistics, strategy, and structure a conceptual framework. International Journal of Physical Distribution and Logistics 29 (4), 224–239. Tan, K.C., Kannan, V.R., Handfield, R.B., 1998. Supply chain management: supplier performance and firm performance. International Journal of Purchasing and Materials Management, 2–9. Thomas, J., 1999. Why your supply chain doesnÕt work. Logistics Management and Distribution Report 39 (6), 42–44. Tornatzky, L.G., M, Fleischer, 1990. The processes of technological innovation. Lexington, New York. Truman, G.E., 2000. Integration in electronic exchange environments. Journal of Management Information Systems 17 (1), 209–244. Veliyath, R., Fitzgerald, E., 2000. Firm capabilities, business strategies, customer preferences, and hypercompetitive arenas: the sustainability of competitive advantages with implications for firm competitiveness. Competitiveness Review 10 (1), 56–82. Vitale, M.R., 1986. American Hospital Supply Corp.: the ASAP system. Harvard Business School Case Services 9-186005. Harvard University Press, Boston, MA. Walton, L.W., Miller, L.G., 1995. Moving toward LIS theory development: a framework of technology adoption within channels. Journal of Business Logistics 16 (2), 117–127. Whipple, J.M., Frankel, R., 2000. Strategic alliance success factors. The Journal of Supply Chain Management 36 (3), 21–28. Williams, L.R., 1994. Understanding distribution channels: an interorganizational study of EDI adoption. Journal of Business Logistics 15 (2), 173–203. Williams, L.R., Nibbs, A., Irby, D., Finley, T., 1997. Logistics integration: the effect of information technology, team composition, and corporate competitive positioning. Journal of Business Logistics 18 (2), 31–41. Williams, L.R., Magee, G.D., Suzuki, Y., 1998. A multidimensional view of EDI: testing the value of EDI participation to firms. Journal of Business Logistics 19 (2), 73–87. Williamson, O.E., 1975. Markets and Hierarchies. The Free Press, New York. Zajac, E.J., Kraatz, M.S., 1993. A diametric model of strategic change: assessing the antecedents and consequences of restructuring in the higher education industry. Strategic Management Journal 14, 83–102.