Information technology, innovation and supply chain structure

Abstract

The link between IT, innovation and supply chain structure is central here. This article is divided into three parts. First, a theoretical analysis of the role of IT in innovation processes. Actually, it involves the total innovation of the supply chain, not merely logistic innovation. The introduction of IT first of all leads to process innovation (internal and external), followed by product innovation in the sense of more diverse, cheaper and customer specific products. Process innovation can best be described in terms of standardisation, differentiation, specialisation and (vertical and horizontal) integration. Furthermore, a presentation of the empirical results from the following sectors in The Netherlands hairdressing, dentistry, building, banking, textile industry and car production. The supply chain classification underlying the analysis has been deduced from the composition and the functions of the actors in the supply chain. Supply chain integration and reversal are the central concepts. Finally, we will discuss the success conditions for innovation and the possible incentives, focussing especially on the Small and Medium-sized Enterprises (SME). The conditions for success in IT, innovation and supply chain structure concern the extent of vertical and horizontal integration, the comparative importance of information, the extent of (international) pressure and innovative regulations, and, of great importance, the extent of strategic and organisational insight on the part of management and personnel.