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SRI VENKATESWARA UNIVERSITY In the partial fulfillment of the requirements for the award of the degree of DOCTOR OF PHILOSOPHY IN BUSINESS MANAGEMENT By B.NAGARJUNA, B.Tech., MBA. Under the Research Supervision of Dr. B. SUDHIR B.Tech., MBA., M.Tech., Ph.d. Professor Department of Business Management Sri Venkateswara University, Tirupati.
SVU COLLEGE OF COMMERCE, MANAGEMENT AND COMPUTER SCIENCES SRI VENKATESWARA UNIVERSITY TIRUPATI-517502 ANDHRAPRADESH, INDIA FEB: 2013
I. INTRODUCTION 1.1 SCM -Supply Chain Management: Todays world is moving in turbulent economic environment, firms are striving for ways to achieve competitive advantage. One of the approaches is to manage the entire supply chain to reduce costs and improve performance to create competitive advantage and business success. The Supply Chain Management philosophy appears to have its origin in the organizational extension theory described by Mallen (1963). Mallens theory has developed the principles within the marketing frame work and advocated extending the organization to include all members of the distribution channel. Supply Chain Management advocates a similar approach but takes a production management view. Articles, specifically about Supply Chain Management began appearing in the late 1980s (Tyndall, 1988, Stevens, 1990) as the focus on opportunities for competitive advantage began shifting from inside the manufacturing plant to relationships with suppliers and then closer relationships with customers. In summarizing the results of the purchasing Futures Research Project, carter & Narasimhan (1990) identified Supply Chain Management as one of the primary future trends for purchasing and supply management professionals in the 21st century.
The supply chain includes all functions involved in receiving and fulfilling a customer request. The supply chain not only includes the manufacturers & suppliers, but also transporters, warehouses, retailers and customers themselves.
During 1990s several organizations realized importance of information flow within an organization in the overall performance of the Supply Chain and have used Information Technology in their Supply Chain to cut costs and increase profits. Information Technology is a key supply chain opportunity and is considered a driver of Supply Chain as it serves as glue that allows the other supply chain drivers to work together with the goal of creating an integrated, coordinated supply chain. Also many companies today are finding the need of embracing information technology to meet the challenge of managing the explosion of data and information needs involved in domestic and international Supply chains. The modern trends and developments within the information technology and software engineering give unprecedented opportunities for integration and coordination. The modern computer networks have the ability to rapidly distribute information to all concerned entities of an enterprise. The network also present an infrastructure for coordination of planning and
operational processes, not only within organizations, but also among them. Chee et al (7)
states that there is an unrealized potential for using information technology in support of network coordination (1996). A survey was done on more than forty computer manufacturers. It was found that only about 15% of the partners were communicating through Electronic Data Interchange. It was also found that much of the coordination activity occurs above the operational level. Advances in Information Technology have focused the Indian firms to increase the use of the internet and other information based technologies like Electronic Data Interchange, Enterprise Resource Planning etc. Information Technology and its tools are seen both as an enabler and necessity for Indian firms to be competitive. Information Technology can bring great improvements in Indian Supply Chain Practices (Sahay et al, 2003). The ability to obtain real time information and the access to large computers systems is enabling firms to develop detailed supply chain models that can be utilized to make real time decisions. The Information Technology has created opportunities to integrate information and decision making across different functional units (Swaminadhan and Tayur, 2003). Information Technology in Supply Chain Management is viewed to have great opportunities ranging from direct operational benefits to the creation of strategic advantage. Porter and Miller (1985) advocate that Information Technology changes industry structures, rules of competition, creates the competitive advantage and new business opportunities. The most typical role of Information Technology in Supply Chain Management is reducing the friction in transaction between Supply chain partners through cost effective information flow.
A number of research works have focused on the role of Information Technology in various functions of supply chain in developed countries. However, as far as the Indian Scenario is concerned, not many studies deal with the impact of Information Technology on Indian Supply Chain practices. India has its own set of peculiarities and complexities when it comes to supply chain practices. A big chunk has yet to tap the benefits of Information Technology ( Rahman, 2003).
supply, sourcing the capabilities intelligently, integrating the information across the supply chain using information technology and extending the supply chain.
is also based on the literature available on the improvement of supply chain performance through the information technology in different sectors in general and FMCG sector in particular.
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Authors Studied
Organizational Extension theory Mallen, 1963 Cortor and Narasimhan, 1990 Cachon and Fisher, 1997 Porter, Pauland Weng, 1997 Lee and Whang, 2000 Chopra, Mein dl, 2001 Lee et al, 1999, Mukhopadyaya et al, 1995 Dagenos & Gavstshic, 2002 Kaplon & sowhary, 2000 Green, 2001 Reddy and Reddy, 2001 Sahay et al, 2003 Swaminadhan and Tayur, 2003 Gunasekharan and Nagi, 2004 Simchi Levi (2003) and Chopra meindl (2001) Porter and Miller, 1985
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Information Technology as a key for strategic 16 advantage. Bowersox and Dougherty, 1995
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Collaboration & Coordination of SC thorough information sharing Information Technology as one of the key cures for bullwhip effect Role of suppliers in adopting Information Technology tools Supply Chain relationships in modern information based era Evolution of Supply Chains towards online business communication Variability of Ordering
Simchi Levi, 2003 Lee et al, 1997 Slaight and Swon, 2000 Christopher and Juttner, 2000 Armstrong and Hagel, 1996 Yu et al, 2001
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Srinivasan et al,1994
24 25 26 27 28 29 30 31 32 33
International customer service System Ability of Information Technology in lowering coordination cost Benefits of Supply chain partnership Master production scheduling system How do suppliers benefit from Information Technology in Supply Chain Management Process improvements on supply chain performance Assembling internet usage in U.S. Business communication and electronic data interchange Role of internet in building commercially viable Supply chains Internet usage in Indian Companies
Lee and Whang, 2000 Elemons and Snow, 2000 Zhenxin et al, 2003 Lee and Wheng, 2000 Mani Subramani, 2004 Jayaram et al, 2007 Lancioni, Smith and Oliva, 2008 Philip and Pederson, 1997 Groham and Hardaker, 2000 Rahman, 2009
35 36 37 38 39 40 41 42 43 44 45
Developing an information model for Supply Chain information flow Decision support systems Impact of Information Technology in Supply Chain Management paradigm shifts Supply Chain coordination E- commerce in Supply Chain Management Information Technology towards Supply Chain Agility Information Technology in Supply Chain Management Role of Information Technology in Supply Chain Supply Chain Risk Management awareness Strategic impact of Information Technology on Supply Chain Supply Chain visibility
Abul Mukid, Mohammed Mukoddes, Javed Kaiser, June 2010 Peter trikman, March, 2010 Sunil Bharadwaj, 2011 Arun kanda, S.G.Deshmukh, 2011 Narid Nikathkar, 2011 Md. Jovonmardi, Ali Abdi, July, 2012 Yatish Ganganwar, 2012 Md.. Akhshabi, 2012 Jarekorn Filsinger, 2012 Hasan Kursat, 2012 Mike Giguere, Nov, 2012
From the above discussions it is understood that information technology has forced the Indian firms to increase the use of internet and other information based technologies like Electronic Data Interchange, Enterprise Resource Planning etc. Information technology can bring great improvements in Indian Supply Chain practices. (Sahay et al, 2003). The information technology has created opportunities to integrate information and decision making across different functional units (Swaminadhan and Tayur, 2003). There are research works which focused on supply chains in India. But when it comes to the literature which comprehensively deals with the issues of Information Technology and its impact when integrated with contemporary supply chain practices, the studies are few. This gap in literature provides areas of ample research in the field of analysis of impact of integration of Information Technology and Indian Supply Chain practices in various industries. There is a scope to study the profile of impact of Information Technology in each industry, comparing and contrasting different industries. Studies are required to be done to throw light on the impact and the potential benefits of the Information Technology which will help the companies to meet their objectives of their supply chains in maximizing their customers satisfaction as well as maximizing their profits. The research available till now discussed various issues focussing on the role of the information technology in various functions of Supply Chain Management in developed countries. However, as far as the Indian scenario is concerned, not many studies deal with the impact of Information Technology on Indian Supply Chain practices. A big chunk has yet to tap the benefits of information technology (Rahman, 2003).
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implications of one or two aspects of supply chain, for example, strategies, tools and techniques, but not entirely. However, a comprehensive study of Information Technology in Supply Chain Management will be useful to identify the critical success factors of Information Technology for an integrated supply chain. Considering the importance of Information Technology in achieving effective Supply Chain Management, an attempt has been made in this research. This study tries to identify the impact of integration of supply chain and information technology in FMCG industry which can provide an answer to paradigm shift of the industry and helps to register the changes happened and changes to come.
VI. SCOPE OF THE STUDY Advances in Information Technology have forced the Indian firms to increase the use of internet and other information based technologies like Electronic Data Interchange. The information technology will act as a key driver and glue to grab the opportunities and encounters the challenges in Supply Chain Management with the goal of creating an integrated, coordinated supply chain. The research focusses on Information Technology and its impact on Supply Chain Management to become more efficient and competitive in managing the explosion of data and information needs specifically in Fast moving consumer goods industry.
VII. HYPOTHESES
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Bangalore city. Questionnaire used in this study was open ended, closed ended, multiple choice and dichotomous, scale ranging from strongly disagree to strongly agree using nominal, interval and likert five point scale. VIII.4. Sampling Frame: Sampling frame comprised of suppliers, manufacturers, distributors in FMCG industry in Bangalore city. Bangalore is the fastest growing city in Karnataka where the population is heterogeneous with diverse, cultural, religious and economic background. It has been a very good marketing centre for targeting various groups of customers. So the existence of FMCG industry is also more.
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VIII.5. Sampling Design: Non Probability convenience sampling method. Sample size =200 respondents. The responses were collected during 2011-2012 VIII.6. Data Analysis: The research in this study is to explain the relative influence of Information Technology on Supply Chain Management in FMCG industry. The data is processed through an accepted statistical program SPSS 11.0. The respondents answers and data are coded after each scale. The data was analyzed using statistical techniques like chi-square test, ANOVA and correlation to find the relationship between variables.
X. FINDINGS:
It is observed that in the recent times the concepts of supply chain design and management have become a popular operations paradigm. This has intensified with the development of information communication technologies to overcome the ever increasing complexity of the system driving buyer-supplier relationships. It is found that various characteristics of the companies like functional responsibility years of business attachment, industry experience, annual sales volume etc are associated with usage of Electronic Data Interchange with suppliers and distributors, priority for redesigning of information technology, implementation issues, business impact and supply chain coordination. As the market is electronically connected and dynamic in nature, companies are trying to improve their agility level with the objective of being flexible and responsive to meet the changing market requirements.
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XI. SUGGESTIONS:
Companies need to invest large amount of money for redesigning internal organizational and technical processes, changing traditional and fundamental product distribution channels and customer service procedure and training staff to achieve Information Technology enabled supply chain. To compete in a new market, organizations need to be capable of reconfiguring its resources to meet the changing requirements. This requires organizations to have an effective supply chain.
XIII. CHAPTERISATION:
The present study has been divided into FIVE chapters. The chapter sequences and the topics dealt with are as follows. Chapter I Provides introduction leading to the discussion on Supply Chain Management, Information Technology and its Impact on Supply Chain Management and FMCG Industry.
Chapter II
Reviews the theoretical bases for this study, supported by discussion on major contribution of the existing literature. The objective of this chapter was to provide readers on overview of previous scholars who directly and indirectly contributed to the impact of Information Technology on Supply Chain Management. And the research gaps were identified based on the review.
Chapter III
Discusses background of the study, research question and research purpose, hypotheses and research methodology. The research methodology deals with description of study area, research approach, research design, instrument selection and data collection, analysis and hypothesis testing
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Chapter IV
Presents the data analysis, its results and related discussion in great detail related to the impact of Information Technology factors on Supply Chain Management in FMCG industry.
Chapter V
Is the core of the dissertation in which research findings are presented conclusions are drawn, recommendations are made and offers implications for future research.
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