Developing Supply Chain Management System Evaluation Attributes Based on the Supply Chain Strategy

Abstract

Given constantly fluctuating market demands, short life cycles of products and global market trends, companies must effectively design, produce and deliver products and services (Christopher & Juttner, 2000). A Supply Chain Management (SCM) system involves managing and coordinating all activities associated with goods and information flows from those raw materials sourcing to product delivery and, finally, to the end customers. A SCM system incorporates numerous modules of supply chain planning and execution, e.g., supply chain network configuration, demand planning, manufacturing planning and scheduling, distribution planning, transportation management, inventory and warehouse management, and supply chain event management, etc. This is why more companies are seeing SCM systems as the key to enhance the transparency, sharing, and trust of their supply chains. Min & Zhou (2002) postulated that information technology (IT) provides the impetus for supply chain cooperation and re-engineering. Here, a SCM system is defined as an integrated enterprise information system (EIS) to realize the integration and collaboration of different stages within a supply chain and owns analytical capabilities to produce planning solutions, strategic level decisions and executing tasks of supply chain. A lot of companies invest large money and efforts in SCM applications to increase their competitive advantages and improve overall supply chain efficiency. As a SCM system becomes more organizationally encompassing, so that its selection is complicated in nature rather than just traditional information system (IS) selection (Sarkis & Sundarraj, 2000). However, many companies install their SCM systems hurriedly without fully understanding the implications for their business or the need for compatibility with overall organizational goals and strategies. The result of this hasty approach is failed projects or weak systems whose logics conflict with organizational goals. However, the impact of bad decision can be high not only in system operations but in terms of its impact on management attitude. Davenport (1998) emphasized the technical factors are not the main reason EIS fail, however, the biggest problems are business problems. The performance of a SCM system basically relates to the degree of match between the available system functionalities and the company’s requirements and also between the logic assumed in the system and that of the