Implementation of supply chain management and its impact on the value of firms

Purpose - The purpose of this research is to examine the effect of supply chain implementation issues on firm value. Design/methodology/approach - Using case study methodology, this paper outlines the cases of Hershey and Nike and the impact of supply chain implementation issues on these firms' value. Findings - Difficulties in the implementation of supply chain management software designed to maximize firm value, can result in a disruption of a firm's supply chain, causing losses for the firm and a decline in firm value; thereby creating much disappointment for the firm's shareholders. Hence, great care should be taken with the implementation of new SCM solutions. Research limitations/implications - Future research may be directed at extending this work by examining the changes in the market values of a wide sample of client and provider firms following the implementation of new supply chain solutions. Practical implications - When modifying a standard supply chain template to suit a customer's requirements, particular care should be used in implementation and provider firms should insist that clients follow the provider's implementation methodology. Complex SCM systems designed to track a multiplicity of product varieties, may lead to difficulties in implementation. Prior to switching to a new SCM system there should be adequate testing to see if the system meets the client's requirements. Premature switching can have disastrous consequences. Originality/value - This research demonstrates the impact of implementation issues on the effectiveness of SCM technology.