Is Web-Based Supply Chain Integration Right for Your Company?

Introduction The 1980s saw the advent of the personal computer, and the days of "Data Processing" departments solely dictating the timeline of office productivity solutions were gone. The 1990s saw the advent of enterprise resource planning (ERP) software packages, and organizations enthusiastically (even if sometimes slowly and painfully) moved from the silo mentality of departmental and unit-based information systems solutions to enterprise-wide information solutions. Today, companies are increasingly realizing that the progression from departmental to enterprise information systems has a logical next step: inter-organizational or supply chain solutions. While many pioneering companies have linked to their customers and suppliers for years, the improving reliability and security of the Web presents new opportunities for all organizations. Companies are increasingly moving to the Web or considering moving to the Web to conduct business transactions, connecting themselves with suppliers and customers. Much of the recent research on electronic data interchange and information technology (IT) in the supply chain has focused on using the Web to conduct business-to-business (B2B) commerce across the supply chain, thus improving the older electronic data interchange ("EDI") model. The B2B market has grown steadily over the last several years. As an increasing portion of companies migrate to the Web it becomes important for both academics and practitioners to understand the benefits and pitfalls of such a migration. Numerous studies enumerate the benefits of electronic supply chain integration and B2B, and these benefits fall into the following categories: Reduction of process cost, improved operational efficiency, improved customer satisfaction, improved coordination, cooperation, and commitment between EDI partners, and improved overall process performance. However, a study has not been done which compares the process performance benefits of all three possible groups: Companies or processes (hereafter simply "companies") using no electronic supply chain integration (verbal and/or paper orders, invoices, etc.), companies using non-Web-based Supply Chain Integration (traditional EDI, using private or leased lines), and companies using Web-based supply chain integration. A notable exception occurred in a 2002 study, but this study was done on only 18 companies, a very small sample size. Also, many current studies claim that companies are misdiagnosing the advantages of B2B over existing ways of doing business. The absence of a three group comparison, along with a possible misdiagnosis of advantages, calls for further examination. Thus, this research will attempt to determine differences in the performance of companies using no electronic supply chain integration, companies using non-Web-based supply chain integration, and companies using Web-based supply chain integration. © 2010 ACM.