Arun’s research in the area of digital enablement of supply chains has examined how IT resources and capabilities can be combined with other resources and capabilities and with interfirm governance practices to a) promote information and knowledge sharing, b) develop effective supply chain coordination, and c) create IT business value. His research program in this area has involved close collaboration with United Parcel Services, Georgia Pacific, Hewlett-Packard, and SAP.
For decades, information technology has been posited to have a major impact on firm performance. Investigations into this line of inquiry have almost always used constructs related to individual firm performance as their dependent measures, an approach that made sense under historical economic conditions. In recent years, however, value chains are giving way to digital supply networks with electronic interactions between tiers in the flow of goods and services. Such an environment makes it imperative to develop sophisticated measures of the performance of entire networks of firms, as opposed to individual firm performance.
Using game-theoretic concepts, this paper explores several dimensions of networked organizational performance as a construct, as a set of measures, and as a construct within a nomology. It describes a program of research in which some empirical validation has already been completed and other work is now underway. We first validate measures for a dyadic view of network performance, followed by an n-firm perspective.
The "Networked Economy" describes alliances of firms that manage globally distributed supply networks. In the best of all worlds, this interactive flow of information among member firms will result in efficient and effective balance of supply and demand. Unfortunately, supply networks suffer from poor and inexact information, and, in the worst case, information is unavailable where and when it is needed. Such entropy creates error and limits responsiveness of processes leading to situations where there is too much or too little inventory at a given a stage in a supply network. This paper offers theoretical perspectives, a case study, and outline of a research proposal to help address these challenges and develop insights into the best practices of transnational digital supply networks. High level questions include: what are the defining characteristics of high performing digital supply networks? How does information sharing impact the error and responsiveness of supply network processes and, consequently, supply network performance? How do international outsourcing practices affect network outcomes? These questions are theoretically examined and used to formulate specific hypotheses. An initial investigation of this theoretical formulation is conducted using a case study approach of a global plastics supply network.
we propose a program of follow-up empirical work based on a broad field study of high performing supply networks. After a rigorous process for developing the instrumentation through semi-structured interviews, we expect to gather information about over network configurations.
As initial empirical evidence for going beyond dyadic exploration of supply network. In this analysis, we show how network externalities lead to more efficient flows of information and to more dynamic responses. The overall performance of all firms participating in this network should be enhanced over time.
The major contribution of these ongoing studies will be new theoretical and empirical insights into the pathologies and metabolism of global digital supply networks. Specifically, we intend to delineate externalities of supply networks that are not embraced by exclusively dyadic perspectives, as well as the salient factors that complicate the interaction of supply network behaviour across national boundaries. We will develop, test and measure novel constructs such as networked organizational performance and error amplification, unveiling systematic knowledge about the relationships between these factors across socio-geographic regions.
Best practice exemplars suggest that digital platforms play a critical role in managing supply chain activities and partnerships that generate performance gains for firms. However, there is limited academic investigation on how and why information technology can create performance gains for firms in a supply chain management (SCM) context. Grant’s (1996) theoretical notion of higher-order capabilities and a hierarchy of capabilities has been used in recent information systems research by Barua et al. (2004), Sambamurthy et al.(2003), and Mithas et al. (2004) to reframe the conversation from the direct performance impacts of IT resources and investments to how and why IT shapes higher-order process capabilities that create performance gains for firms. We draw on the emerging IT-enabled organizational capabilities
perspective to suggest that firms that develop IT infrastructure integration for SCM and leverage it to create a higher-order supply chain integration capability generate significant and sustainable performance gains. A research model is developed to investigate the hierarchy of IT-related capabilities and their impact on firm performance. Data were collected from 110 supply chain and logistics managers in manufacturing and retail organizations. Our results suggest that integrated IT infrastructures enable firms to develop the higher-order capability of supply chain process integration. This capability enables firms to unbundle information flows from physical flows, and to share information with their supply chain partners to create information-based approaches for superior demand planning, for the staging and movement of physical products, and for streamlining voluminous and complex financial work processes. Furthermore, IT-enabled supply chain integration capability results in significant and sustained firm performance gains, especially in operational excellence and revenue growth. Managerial initiatives should be directed at developing an integrated IT infrastructure and leveraging it to create process capabilities for the integration of resource flows between a firm and its supply chain partners.
A new model of competition, where competition is among supply chain networks rather than individual firms, is transforming traditional market-based buyer–supplier relations to one of competition among cooperative sets. In order to integrate and realize performance gains from participating in cooperative supply networks, the importance of information sharing across the supply chain has been emphasized in different literature streams. In this study, we examine the relational antecedents of this critical aspect of supply chain integration—that is, information flow integration.Our objective is to investigate the relationship between relational orientation of the focal firm, as characterized by (1) long-term orientation of its supply chain relation-ships, (2) asset specificity, and (3) interaction routines and the information flow integration between a firm and its supply chain partners. A research model was developed and data were collected from 110 supply chain and logistics managers in manufacturing and retail organizations. Our results suggest that tangible and intangible resources invested in supply chain relationships enable the integration of information flows with supply chain partners. Specifically, formal and informal interaction routines that take time and effort to develop enable integration of informational flows across a firm’s supply chain. Investments in relation-specific assets and long-term orientation in relationships enable the development of these interaction routines.
Firms are integrating segmented supply chains to improve their dynamic resource anagement processes and reduce buffers, such as lead times and inventory levels. Yet, supply chain integration, if inappropriately conceptualized, can have a detrimental impact on market responsiveness and value generation capability. Innovations in Internet technologies,e-business, and process standards, such as RosettaNet,are challenging assumptions to manage resources across supply chains and to create value. As a consequence, firms need to reevaluate supply chain partners, processes, and enabling digital capabilities. Five supply chain configurations, i.e., integrated firm, fragmented chains, end-to-end integration,modular chains, and solution webs, are profiled. Assumptions for value creation and process capabilities for resource management that are associated with each configuration are discussed. Key issues in moving from one configuration to another are evaluated.
Although past research has investigated the impact of exploration and exploitation on firm performance,there is limited research on these effects in inter-organizational relationships. We examine whether the boundary condition for ambidextrous learning can be extended from firms to long-term inter-organizational relationships. Specifically, we focus on a particular aspect of learning—namely, explorative and exploitative knowledge sharing—and examine its impact on the performance of long-term relationships. We also theorize how ambidextrous management of the relationship and ontological commitment to span the syntactic, semantic, and pragmatic knowledge boundaries between partners enable knowledge sharing. Our theoretical predictions are tested using data collected from both account managers at customer firms responsible for the relationship with a leading supply chain vendor and account managers at the vendor firm responsible for relationships with customers. The findings suggest that both exploratory and exploitative knowledge sharing lead to relationship performance gains, that such sharing is enabled by the ambidextrous management of the relationship, and that such sharing is facilitated by ontological commitment. Interesting differences in the enablers and consequences of both forms of knowledge sharing are detected between customers and the vendor.
This paper focuses on strategic information flows between buyers and suppliers within logistics supply chain relationships and on subsequent relationship-specific performance outcomes. Our analysis of dyadic data collected from 91 buyer–supplier logistics relationships finds that buyer and supplier strategic information flows positively impact the relationship-specific performance of both sharing and receiving parties. Specifically, each party gains financially from improved management of assets, reduced costs of operations, and enhanced productivity. Moreover, each benefits operationally from improved planning, control, and flexibility of resources. Buyer dependence on the supplier increases buyer strategic information flows to the supplier. Additionally, buyer IT customization and both buyer and supplier trusting beliefs in the receiving party positively impact strategic information sharing with partners. This study suggests that partnerships for supply chain services engage in cooperative initiatives to generate relational rents and are an alternative to conventional “arms length” transactional exchanges. These partnerships need to be motivated to go beyond the sharing of order-related information (which must occur in transactional exchanges) and to share strategic information (which has the potential for both additional rent generation and risks of misappropriation).
As contemporary firms become reliant on networks of supply chain partners, their performance increasingly depends on their supply chains’ ability to be responsive to changing markets. This research addresses the theoretically neglected question of howand why the interplay between product design modularity and in- formation technology (IT) infrastructure flexibility influences supply chain performance. We develop two key ideas. First, product design modularity enhances performance because it increases supply chain responsiveness, a critical mediating explanatory concept. Second, product design modularity and IT infrastructure flexibility are complementary design choices: Increasing one increases the benefits of increasing the other. We propose a mediated-moderation relationship; IT infrastructure flexibility enhances performance by strengthening the influence of product design modularity on supply chain responsiveness. Tests using primary and archival data from 102 firms provide strong support for both ideas. Implications for theory and practice are also discussed.
This study seeks to identify the means by which information technology helps cocreate relational value in the context of interfirm relationships in the logistics industry—a large and information-intensive industry. We identify a set of IT functionalities—single-location shipping, multilocation shipping, supply chain visibility, and financial settlement—that can be used to manage the flows of physical goods, information, and finances across locations in interfirm logistics processes. Progressively more advanced sets of IT functionalities, when implemented and used in the interfirm relationship to execute logistics processes, are proposed to form four distinct IT capability profiles of increased sophistication. Interfirm IT capability profiles of higher sophistication are proposed to help cocreate greater relational value by facilitating the flows of physical goods, information, and finances across locations in the interfirm logistics process. Besides their direct role in helping cocreate relational value, these interfirm IT capability profiles are proposed to further enhance relational value cocreation when complemented by interfirm communications for business development and IT development.Our empirical study was situated in one of the world’s largest logistics suppliers and over 2,000 of its interfirm relationships with buyers across industries. Integrated data from four archival sources on the IT functionalities implemented and used in interfirm logistics relationships, interfirm communications, relational value (share of wallet and loyalty), and multiple control variables were collected. The results show that the proposed interfirm IT capability profiles and interfirm communications have both a direct and an interaction effect on relational value. Implications for cocreating relational value in interfirm relationships with the aid of IT are discussed.
We draw on the interorganizational relationship management literature to examine how contextual characteristics of the supplier portfolio (portfolio concentration, relationship length, and supplier substitutability) moderate the impacts of process alignment and partnering flexibility – two of a firm’s key supplier-facing process capabilities to manage supplier relationships–on a product line’s competitive performance. Our analysis of survey data on a firm’s supplier portfolio for a major product line indicates that the impacts of process alignment and partnering flexibility on competitive performance are moderated by the three supplier portfolio characteristics. Specifically, while concentrated relationship portfolios, long-term relationships, and supplier substitutability amplify the positive effect of process alignment on competitive performance, concentrated relationship portfolios and long-term relationships attenuate the competitive benefits that firms derive from partnering flexibility. While long-term relationships and concentrated supplier portfolios enhance the competitive benefits of process alignment, operations managers also need to recognize the detrimental effects of these supplier portfolio characteristics on the competitive benefits of partnering flexibility.
We examine sourcing professionals’ work context to conceptualize how they use sourcing enterprise systems (SESs) and to understand when SES use results in positive/negative job outcomes. We differentiate between SES use for supplier selection and supplier governance, identify sourcing professionals’ work process interdependence as a moderator for the impacts of SES use on job satisfaction, and suggest job satisfaction mediates the impacts of SES use on job performance. We conducted a field study of sourcing professionals’ SES use at one of the largest consumer product companies in the United States, which has implemented an SES to innovate its sourcing professionals’ work processes. Based on our analysis of the survey and qualitative data we collected, we found the impacts of both types of SES use (1) to be negative on job satisfaction when work process interdependence was high, (2) to be positive on job satisfaction when work process interdependence was low, and (3) to be mediated by job satisfaction for job performance. We discuss the implications of our findings for the literature at the intersection of information systems and operations management as well as for the information technology enabled innovation of sourcing processes and, more generally, complex business processes.
Contextual ambidexterity of an inter organizational relationship (IOR) is the ability of its management system to align partners’ activities and resources for short-term goals and adapt partners’ cognitions and actions for long-term viability. It is an alternative to structural ambidexterity in which separate units of the IOR pursue short- and long-term goals. We theorize that when utilized to coordinate the IOR, information technology (IT)-enabled operations and sensemaking, along with interdependent decision making, promote the IOR’s contextual ambidexterity. We test our hypotheses on both sides of a customer-vendor relationship using data collected from (1) the account executives of one of the world’s largest supply chain vendors (n D76) and(2) its customers (n D 238). We find commonalities and differences in the influence coordination mechanisms have on contextual ambidexterity from the vendor’s and the customer’s perspectives. For both customers and vendors, contextual ambidexterity improves the quality and performance of the relationship, and decision inter-dependence promotes contextual ambidexterity. For customers, using operations support systems (OSSs) and interpretation support systems (ISSs) enhances contextual ambidexterity. For vendors, the impact of both OSS use and ISS use on contextual ambidexterity depends on the duration of the relationship. Our study shows that IT-enabled operations and sensemaking are key enablers of IOR ambidexterity and that vendors should combine these IT capabilities with relationship-specific knowledge that accumulates with relationship duration.
Despite continued rapid growth in the outsourcing of supply chain services, long term relationships between vendors and customers are challenged by the need to create sustainable value from the relationship. Our research suggests that the ability of client firms to align their collaboration modes and IT capabilities with their objectives for the vendor relationship is critical for creating value from supply chain relationships. In this article, we describe four collaboration modes being used for supply chain relationships,how they are aligned with value creation objectives, and the IT capabilities needed to achieve them. Our findings are based on a survey of a major supply chain vendor and 238 of its long-term customers, as well as interviews with IT and business executives responsible for over 100 long-term relationships.
Contextual ambidexterity of an interorganizational relationship (IOR) is the ability of its management system to align partners’ activities and resources for short-term goals and adapt partners’ cognitions and actions for long-term viability. It is an alternative to structural ambidexterity in which separate units of the IOR pursue short- and long-term goals. We theorize that when utilized to coordinate the IOR, information technology (IT)-enabled operations and sensemaking, along with interdependent decision making, promote the IOR’s contextual ambidexterity. We test our hypotheses on both sides of a customer-vendor relationship using data collected from (1) the account executives of one of the world’s largest supply chain vendors (n = 76) and (2) its customers (n= 238). We find commonalities and differences in the influence coordination mechanisms have on contextual ambidexterity from the vendor’s and the customer’s perspectives. For both customers and vendors, contextual ambidexterity improves the quality and performance of the relationship, and decision interdependence promotes contextual ambidexterity. For customers, using operations support systems (OSSs) and interpretation support systems (ISSs) enhances contextual ambidexterity. For vendors, the impact of both OSS use and ISS use on contextual ambidexterity depends on the duration of the relationship. Our study shows that IT-enabled operations and sensemaking are key enablers of IOR ambidexterity and that vendors should combine these IT capabilities with relationship-specific knowledge that accumulates with relationship duration.
Compressed cycle times, increasing uncertainty in the business environment, and supply chain network-based competition are putting the spotlight on adaptive planning and optimization as a way to generate dynamic efficiencies. Compression of product lifecycles and time to market, margin erosion, and increased outsourcing are driving the shift from advanced planning to adaptive planning. This transition requires integration across demand planning, supply chain network optimization, and execution planning. IT-enabled global optimization eliminates pockets of inefficiencies and creates top and bottom line value. Federated governance and appropriate value metrics must be established as part of adaptive planning initiatives. SAP possesses the necessary expertise, experience, and technology to support your company’s strategic shift toward adaptive planning and optimization of your supply chain network.
Contemporary firms must recognize a fundamental shift in the management of distribution activities as a strategic driver of their competitive success. Instead of the traditional focus on pushing products to customers through distribution channels, there is a need to migrate toward adaptive distribution networks. Such networks focus on managing the flow of orders from customers by providing them with high levels of convenience while preserving attention to responsiveness and total distribution costs.
Adaptive distribution networks are built through integration of multiple channels,business partners, and supply chain network wide processes for order capture, order fulfillment, financial settlement, and post-sales care. They support for real-time tracking and monitoring of the flow of customer orders as well as for collaboration planning and decision-making among the business partners.The fundamental goal of these networks is to capture and optimally deliver each customer order and make decisions to overcome the adverse impacts of exception events that impede order flow. Complementary technologies, including web services, agent, mobile, visibility, and optimization technologies are required to migrate toward adaptive distribution networks.
In a hyper-competitive environment companies must continually improve their people, processes, and technologies to create competitive advantage. The ability to accurately predict consumer demand coupled with the capability to rapidly react and readjust to environmental changes and supply and demand fluctuations separates the inners from the losers.
The emergent challenge and opportunity for companies is to architect adaptive supply chain networks that exploit innovations to consistently improve efficiency and responsiveness objectives. The optimization of predictive control, reactive control and passive insulation increases the adaptability of companies across vertical industries.
Mechanistic organizations do not create value for today’s uncertain and hard-to-predict competitive landscape. Companies wanting to compete in today’s global, uncertain and innovative context must embrace the adaptive concept in the architecture of their supply chain networks.
Logistics and transportation binds together the flow of information and goods of a company’s supply chain processes with those of its suppliers and customers. Traditional mechanisms used to manage these flows have created significant inefficiencies that must be addressed by companies to create value in today’s hypercompetitive environment.
The global optimization of transportation plans,integrated event management, and dynamic exception handling are capabilities required t coordinate flows of information and goods in supply chain networks. Tightly coordinated logistics and transportation across the supply chain network improves the coordination of resources across suppliers,warehouses, production facilities, and customers.
Innovative companies are improving their efficiency and responsiveness by integrating their logistics and transportation functions with critical operating processes. By factoring transportation constraints into the planning and execution of warehousing, production, and fulfillment, these companies are outperforming their competition.