Supply chain SAAS mode: Matching efficiency with agility

Abstract

It is hard for a supply chain to pursue efficiency and agility simultaneously. In this paper we put forward a new kind of software as a service (SAAS) mode, named as central firm initiated SAAS mode, which can provide supply chain management (SCM) window service and enterprise resource plan (ERP) system service for different suppliers. By an analytical model, we illustrate how this mode promotes supply chain efficiency and agility simultaneously. The contribution of this paper is three-fold: 1 In SCM window service mode, the feature of low operation cost enhances the coordination efficiency of supply chain while the features of low searching cost and low transformation cost improve the agility of replacing partners from supply chain. 2 As a technical contract and specific asset, ERP system service mode strengthens interdependence as well as mutual trust among supply chain partners, consequently improves their agility towards market change. 3 By using SCM window service mode, the central firm can manage his suppliers of universal parts and flexibly replace its partners to reduce supply risk. While by using ERP system service mode, the central firm can manage his suppliers of special parts and respond to market uncertainty via sharing risk with his key suppliers. Combining SCM window service mode with ERP system service mode, the central firm can achieve supply chain efficiency and agility simultaneously.