Universe of Emerging Technologies and Science

ISSN: 2349 - 655X

Volume I Issue IV September 2014

THE ROLE OF E-BUSINESS IN SUPPLY CHAIN MANAGEMENT

Alexander Harsono
Information Systems Department, STMIK Pontianak
Jl. Merdeka Barat No. 372 Pontianak 74111, Kalimantan Barat, Indonesia
E-mail: alex189@ymail.com
________________________________________________________________________________________________________
very short product life cycles and short order-to-delivery
times as a result. Organizations successfully engaging in eThe impact of e-business in supply chain management
business are able to convert data from their back-end
(SCM) has gained significant interest in researchers and
systems into a common readable format and thus are able to
academics in recent years since e-business and SCM are
share information and conduct electronic transactions with
critical success factors. A case study on Dell Inc. was
their business partners via the Internet. It also encompasses
chosen because Dell Inc. has survived the recent economic
the adoption of innovative business concepts, such as
slowdown since March 2000. This phenomenon was the
dynamic pricing through auctions and or reverse auctions,
result of Dells success story demonstrated a real case of
cooperation via purchasing consortia and direct online sales
how Dell Inc. effectively adopted e-business to support its
to customers. E-business is concerned with the use of the
SCM. Data was obtained via Web browsing and e-mail. This
Internet to link companies with their suppliers, customers
paper first discussed various activities that involved eand other trading partners. As a business concept, it has
business and supply chain management process;
evolved significantly since its introduction in the 1990s in
information, products, and financial flows. It then illustrated
parallel with the rapid rate of development of information
the role of e-business in supply chain management to gain
technology (IT). SCM is fundamentally concerned with
competitive advantages in dynamic business environment.
integration of activities both with and between
Findings showed e-business has the capacity to have an
organizations. E-business solutions in general are seeking to
impact on the physical, information and financial flows of
enhance supply chain effectiveness and efficiency through
supply chains. This paper is origin and empirical study that
the automation of business processes. The adoption of ewould be a contribution to business practitioners and
business can result in benefits such as higher transparency,
academia.
reduced transaction, manufacturing and other costs, reduced
unmonitored corporate spending and more centralized
Keywords: E-business, SCM, Information Sharing, Supply
purchasing spend and more coordinated and efficient
Chain Integration
collaborations for such projects as joint product design. Ebusiness also facilitates collaboration and supply chain
1. INTRODUCTION
information sharing, such as order forecasts and inventory
In the past ten years, electronic business (e-business), as an
planning, automates requisition and purchase order creation
overarching business concept, has received increasing
and integrate payment processes, and help organizations
attention from academics and practitioners alike. The term
develop plans for the more effective management of
e-business was introduced by IBM in 1997. In its origins it
sourcing and logistics.
is defined as the transformation of key business processes
through the use of Internet technologies [1]. Amor [2]
E-business has enhanced both supply chain efficiency and
expands the definition by describing it as a secured, flexible
responsiveness by sharing real-time information regarding
and integrated approach in order to offer various companies
inventory, production scheduling, customer orders and
values through the combination of systems and procedures
delivery status, and other key information like product
and so being able to manage the core business procedures
design, product availability and demand among supply
with the simplicity and penetration of Internet technology.
chains partners. An objective of e-business is to streamline
These two definitions of e-business both refer to using the
and automate as many processes as possible. A few
Internet to link with customers, suppliers and other
examples of processes are credit card verification,
associated partners. However, the term also implies the
production, purchasing, delivery, inventory management, or
transformation of existing business processes into more
providing customer relationship management (CRM). This
efficient ones.
is done by e-business mechanisms such as e-markets, eprocurement, and e-CRM, as shown in Fig. 1. Note that
E-business has generally been pioneered by IT companies,
processes in the figure involve several types of transactions.
where demand is constantly changing and products have
In order to better understand how e-business works; look at

ABSTRACT

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Fig. 1 and e-business model in Table 2 where a company
such as Dell (labeled Our Company) provides products
and/or services to customers, as shown on the right side [3].
To do so, the company buys inputs such as raw materials,
components, parts, or services from suppliers and other
business partners in the procurement process. Processing the
inputs is done in its production/operations department.
Finance, marketing, IT, and other departments support the
conversion of inputs to outputs and the sale to customers.

chain performance as delineated in Fig. 2 and 3. The second

concept is termed e-commerce and is defined as the ability
of business to buy and sell goods and services over the
Internet. Over the past decade these terms have been used as
if they were interchangeable. In reality, e-business is a more
powerful concept that seeks to utilize the Internet to build
integrative, collaborative relationships among supply chain
members, while e-commerce is a subset of e-business
concerned with the performance of commerce
transactions electronically.
Table - 1: E-business Models

Fig -1: How e-business works

1.1. E-Business Concept and What Role Does It

Plays in SCM?
E-business is aimed at enhancing the competitiveness of an
organization by deploying innovative information and
communications technology throughout an organization and
beyond, through links to partners and customers. SCM is the
coordination of all supply activities of an organization from
its suppliers and partners to its customers. So, it is apparent
that e-business involves looking at how electronic
communications can be used to enhance all aspects of an
organizations SCM. It also involves optimizing an
organizations value chain, a related concept that describes
the different value-adding activities that connect a
companys supply side with its demand side. The e-business
era also involves management of a network of interrelated
value chains or value networks.
The application of the Internet to business can best be
understood by dividing it into two separate, yet connected
concepts and set of practices [4]. The first is termed ebusiness and is defined as a collection of business models
and practices enabled by Internet technology focused on the
networking of customers, suppliers, and productive
capabilities with the goal of continually improving supply

As illustrated in Fig. 2 and 3, all e-business activities occur

between consumers, government and between businesses. Ebusiness models can be separated into at least three major
categories:
a. Business-to-Consumer (B2C). This model is the most
known and applies to any business that utilizes the
Internet to sell products or services directly to the
consumer. The basic form of B2C model is termed estores or e-tailers. The goal of this model is to imitate an
actual store shopping experience where consumers can
browse through catalogs or search mechanism to locate,
price compare, and order products and services to be
shipped directly to their homes. Some of these B2C
sites, such as Amazon.com, are pure-play in that they sell
only through the Internet. Other types, such as
Barnesandnoble.com, sell online as well as from an
actual store outlet and are termed a bricks-and-clicks
Web site.

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b. Business-to-Business (B2B). This model applies to any
company that utilizes the Internet to sell products and
services to other companies. Also termed e-procurement,
this model is used by the buy-side organization for the
purchase of manufacturing inventories, finished goods,
and MRO goods and services based on a preexisting
contract (systematic sourcing) or random purchasing or
(spot sourcing) from various types of MRO hubs, yield
managers, catalog hubs, and exchanges.
c. Business-to-Government (B2G). This model applies to
any company that utilizes the Internet to sell products
and services to government both domestic and foreign
countries. This model is used by the sell-side
organization to sell their products and services to both
national and foreign government.
Ross [5] illustrated web-enabled e-business as delineated
in Fig. 2 and 3 as follows:

Fig -2: Web-enabled e-business

Network technologies enabled by e-business standards have
the potential to transform and integrate the internal
corporate functional elements of many industries. The
Internet facilitates the abolition of the trade-off between
richness and reach of information, which means that
communication can occur at almost zero cost, without
constraints on the richness of information. Richness of
information includes characteristics such as bandwidth,
customization, and interactivity. Reach is defined as the
connectivity, and is the number of agents involved in
exchanging information. Before the development of the
Internet, to reach large numbers of people with rich
information was a costly and time-consuming process and
prone to errors due to manual information replication.

Impact of e-business on the Supply Chain and the role it

plays in SCM be illustrated as follows: while there are
different e-business models, collectively they have had a
dramatic effect on the operations, designs, and service
factors of conventional SCM. The ability to sell to a global
marketplace through the ubiquitous presence of the Internet
has placed several unique demands on the supply chain.
According to Chopra and Meindl [6], the impact of ebusiness on SCM can be divided into two spheres: the first
associated with several elements oriented around
cost/operations management and the second around sales/
service performance as delineated in Fig. 3. Providing detail
answers to these two groupings of factors is essential to the
effective pursuit of a profitable e-business initiative.
The ability to enter and follow up on orders through the
Internet is probably the most radical facet of e-business.
Among the critical elements of e-sales (e-sales is subset of
e-business) impacting the supply chain can be found:
a. Product variety. An e-commerce site enables customers
to choose from a much wider array of products than is
possible with a bricks and mortar store. Pursuing a
virtual inventory model means that the supply chains
that actually service the customer will be complex,
closely federated by information technologies and
contractual relationships, and capable of seamless
delivery to the customer.
b. Product planning. The ability of e-businesses to utilize
networking technologies means that customer demand
can be broadcast continuously through the supply chain,
providing visibility to requirements all the way back to
the manufacturer. This capability will enable supply
chains to plan using the customer demand-pull or, at a
minimum, more accurate forecasts leading to a much
closer match of channel supply and demand.
c. Shortened Time to Market. Because an e-business
company can introduce new products to the marketplace
much faster than a conventional business, the pressure on
the supply chain to acquire and distribute them is much
greater. Supply chain entities will have to cultivate close
relationships with manufacturers and supplying
intermediaries so that promotion, pricing, advertising,
documentation, forecasting, and other components can
be swiftly executed and relayed down the supply chain.
d. Flexible Pricing, Promotions, and Product Offerings.
Changes to price, promotions, and the product portfolio
by the e-business firm must be matched by a mechanism
that rapidly communicates these changes to the supply
chain. Such changes will quickly have a bullwhip effect
on channel inventories if poorly communicated to
channel distributors and manufacturers.

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excitement generated by the e-business concept concerns the
benefits that companies can achieve through increasing the
efficiency of the whole supply chain.
Table -2: A summary of the problems of SCM and how ebusiness technology can assist

Fig -3: Enterprise Business Systems and

E-Business Structures
Sweeney depicts that managing information flows in the
supply chain is one of the most crucial activities in SCM as
the flow of materials and money is usually initiated by
information movements [7]. Poor management of
information flows essentially leads to the so-called
bullwhip-effect that requires the holding of excessive levels
of inventory. High demand visibility plays a strategic role in
reducing inventory levels [8]. Efficient and effective
network-based communication structures in a supply chain
have the potential to offset these effects. Supply Chain
Integration (SCI) and e-business are interrelated insofar as
integrated e-business functions facilitate undistorted and
accurate information sharing. In this way, optimal alignment
of business functions represents the means to an effective
overall SCI strategy.
SCM is essentially the optimization of material flows and
associated information flows involved with an
organizations operations. To manage these material and
information flows e-business applications are today essential
to bring the benefits such as reducing cost, improving
service and inventory control [9]. SCM is presented as the
premier application of e-business. By applying information
systems, companies can enhance or radically improve many
aspects of the supply chain. In the concept of e-business,
supply chain management can be enhanced through buy-side
e-commerce, internal communications, and relationships
with partners and sell-side e-commerce. E-business
technologies enable information flows to be redefined to
facilitate the sharing of information between partners, often
at lower costs than were previously possible, and at the same
time frame, e-business technology can assist SCM in
problem-solving as illustrated in Table 2. Much of the

1.2. SCM Concept and What Does SCM Software

Do?
A supply chain is a bidirectional flow of information,
products and money between the initial suppliers and final
customers through different organizations. It can be both
internal and external in its nature. In an internal context, the
elements of a supply chain are represented by various intraorganizational functions (such as for example sales and
marketing, procurement, production planning, warehouse
and transport management), whereas the external supply
chain further encompasses movements of material,
information and funds between companies and their
suppliers, customers and various business partners.
SCM is defined as the integrated, process-oriented design,
planning and control of goods, information, and cash flows
along the entire value chain from customer to the rawmaterial supplier with the aims of improving customer
orientation, synchronizing supply with demand, making the
production more flexible and responsive to the demand, and
downsizing of the inventory along the value chain [10].
SCM stages have been evolving from stages 1 (1960s) as
centralized logistics management to stages 5 (technologyenabled SCM) in 2000s where the e-business affects the
SCM functions as illustrated in Table 3[11]. Simchi-Levi et
al. [12] defined SCM as a set of approaches utilized to

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effectively integrate suppliers, manufacturers, warehouses,
and stores, so that merchandise is produced and distributed
at the right quantities, to the right locations, and at the right
time in order to minimize system-wide costs while
satisfying service level requirements. Supply chains are
increasingly competing with other supply chains and as such
the ultimate goal of effective SCM is superior business
performance. Supply chain integration (SCI) is an important
part of SCM. It aims to facilitate the flow between all
organizations in a supply chain and thus positively affects
operational performance. In short, a key tenet of SCM
relates to the need to move from fragmented supply chain
architectures to configurations that are characterized by
integration.
Table -3: History of SCM Stages

logistics, distribution, and at the time to share information

and data with supply chain partners at an ever increasing
rate [13].

1.3. Dells Case Study

As being illustrated earlier, this case study on Dell Inc. is
very interesting to discuss due to Dell Inc. has survived the
recent economic slowdown since March 2000. This
phenomenon was the result of Dells success story
demonstrated a real case of how Dell Inc. successfully
deployed e-business technology to enhance both supply
chain effectiveness and responsiveness by sharing real-time
information regarding inventory, delivery & shipment status
and other key information like product design, product
availability and demand among supply chain partners.
Dell Inc. was one of the first to establish a customer-driven
PC configuration capability. Dell had a make-to-order
assembly model that received orders from its own direct-tocustomer retail channelsusing call centers, fax, and phone
ordersbut no retail stores. Dells Web site leveraged the
software applications and experiences of its own customer
service representations to create an effective self-service
Web application that let online customers create their own
custom PC orders. Customers can experiment with different
computer configurations using a choice board capability
that shows them price differences for components and
calculates the total price before finalizing their order.
Customers submit their PC order via the Web site- ecommerce, and the order data are translated into a design,
the components are ordered, and then the right resources are
electronically scheduled to fulfill the order Direct from
Dell. For retail sales to business customers (which is a
larger customer segment than end-consumer sales), Dells
sales staff works with an organizations procurement
managers to select a small number of PC configurations at a
pre-negotiated price to fit the companys infrastructure
standards and employee needs. Dell Computers has survived
the recent economic slowdown since March 2000. This
phenomenon was the result of Dells super-efficient supply
chain that is affected by effective e-commerce. Dells vice
president who was overseeing Dells SCM. Dells success
story demonstrated a real case of effective integration and
implementation of SCM which supported by its excellent ebusiness.

The reason why SCM came about is because industrial

relationships have become increasingly complex over the
last decades. Most companies use SCM software
applications to track demand, supply, manufacturing status,

By year-end 2002, Dell was number one in market share for

desktop PCs and was also the number one online computer
retailer. However, by mid-2006 Dell had lost its market
share position to Hewlett-Packard (which had merged with

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Compaq Computer a few years earlier). The companys
highly efficient supply-chain model and direct sales retail
approach were still intact, but by then its competitors were
also able to compete online as well as through their
traditional distribution channels.
This paper describes and critically assesses developments of
e-business that have impacted supply network integration
strategies. It starts with history and a summary SCM
definitions as a proper understanding of the concept of SCM
is a critical component in determining appropriate ebusiness applications and systems. SCM is recognized as a
strategic weapon, by which business operations can be
streamlined and overall competitiveness enhanced. It is
widely accepted that a large proportion of the total cost base
of companies is tied up in the supply chain. This paper first
discussed various activities that involved e-business and
SCM process; information, products, and financial flows. It
then illustrated the role of e-business in supply chain
management to gain competitive advantages in dynamic
business environment.

2. RESEARCH METHODOLOGY
A case study approach was conducted to describe a real
practice of how Dells SCM has been enhanced by the eBusiness. Data and information pertaining to Dells ebusiness and SCM on annual reports, whitepapers, journals,
and analysts insights were obtained through Web browsing
and e-mail.

competitors in this business line. The first PCs company to

be threatening Dell was Compaq, which started a price war.
At that time, Dell was taking orders by fax and snail mail
and losing money. Dell suffered losses which reached over
$100 million. The company was in trouble.
With the failure experience, Dell began harnessing ebusiness technology to enhance the SCM to streamline its
business operations. This provided Dell with an opportunity
to expand rapidly. Dell implemented aggressive online
order-taking and opened subsidiaries in Europe and Asia.
Dell also started to offer additional products on its Web site.
This enabled Dell to batter Compaq, and in 2000 Dell
became number one in worldwide PC shipments. At that
time, Internet sales topped $50 million per day (about $18
billion per year). Today, Dell sells about $62 billion a year
in computer-related products online, from network switches
to printers, employing over 88,000 people. Consumers shop
at dell.com using an electronic catalog. The sales are
completed using mechanisms described in figure 4. In
addition, Dell auctions refurbished Dell computers and other
products at dellauction.com. The online auctions are an
important sales channel. In 2006, Dell opened physical
stores, mainly in reaction to customer demands.
Direct online marketing is Dells major electronic business
activity. Dell sells to the following groups:
a. B2C: Direct online marketing to individuals for their
homes and home offices
b. B2B: To small businesses (up to 200 employees);
Medium and large businesses (over 200 employees)
c. B2G: To Government, education, and health-care
organizations

The current data and information were then studied to get

the whole picture of how Dells e-business and SCM take
place and what is happening in business today of Dell in
order to complete a better understanding of e-business and
SCM in relation with how e-business boosts and enhances
supply chain management. A literature review on e-business
and supply chain management concept, the integration of ebusiness into the supply chain, and finally the role of ebusiness in the supply chain management were chosen
because together they are making a large impact on one
another.

3. RESULT AND ANALYSIS

In 1994 e-business was just rising, and still was not popular
as it is now. And Dell had not yet fully deployed e-business
technology to support its SCM. But Dell successfully
adopted its new business model or direct sell online via
e-commerce which was the subset of e-business. And Dell
was the first company to offer personal computers via mail
order. This concept was Dells cornerstone business model.
Dell had become one of the top five computer makers
worldwide with annual profit billions of US$. This success
story had changed due to tough competitions among its

Fig -4: Dells Supply Chain Management Model

3.1. The Reality Role of E-business in Dells SCM

Dell has gained big benefits through successfully harnessing
e-business technology in enhancing its SCM, particularly in
todays e-business marketplaces. Still, there can be little
doubt that e-business is not only here to stay, but that it now
underlies the very foundations of business in todays global
economy. The benefits are undeniable:

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a. E-business technology Synchronized Supply Chains
Visibility into operating information across the value
chain allows Dell to drive efficiencies across the entire
value chain. These include increased inventory turnover,
fast new product introductions, lower work in process
(WIP) inventories, and others.
b. Increased Market Supply and Demand Visibility
Such visibility enables more Dells customer choice,
potentially better fit of products to buyers, and a larger
market for sellers.
c. E-business plays an important role in SCM on Improving
e-collaboration
Dell has many business partners with whom it needs to
communicate and collaborate. For example, Dell uses
shippers, such as UPS and FedEx, to deliver its
computers to individuals. It also uses third-party logistics
companies to collect, maintain, and deliver components
from its suppliers, and it has many other partners. Dell is
using Web Services, an EC technology, to facilitate
communication and reduce inventories. Web Services
facilitate B2B integration. Integration efforts began in
2000 with other technologies when Dell encouraged its
customers to buy online. Dell can provide e-procurement
applications and consulting services. Dell also educates
customers in its technologies and offers suggestions on
how to use them. Finally, Dell has a superb
communication system with its over 15,000 service
providers around the globe. E-Market platforms will
enable buyers and sellers to work together
collaboratively for
product
design,
planning,
introduction, marketing campaigns, and life cycle
management programs.
d. E-business plays an important role in SCM on ECustomer Service
Dell uses a number of different tools to provide superb
customer service around the clock. To leverage customer
relationship management a customer service approach
that is customer centered for lasting relationshipsDell
provides a virtual help desk for self-diagnosis and
service as well as direct access to technical support data.
In addition, a phone-based help desk is open 24/7.
Customers can also arrange for a live chat with a
customer care agent. Product support includes
troubleshooting, user guides, upgrades, downloads, news
and press releases, FAQs, order status information, a
my account page, a community forum (to exchange
ideas, information, and experiences), bulletin boards and
other customer-to-customer interaction features, training
books (at a discount), and much more. Dell also offers
educational programs at learndell.com. Dell keeps a
large customer database. Using data mining tools, it
learns a great deal about its customers and attempts to
make them happy. The database is used to improve
marketing as well.

e. E-business plays an important role in SCM on Price

Benefits from Increased Competition
Dell gains another benefit though auctions and e-markets
that can be used to increase price competition and lead to
dramatically lower procurement costs for buyers.
f. E-business plays an important role in SCM on Increased
Operational Efficiencies
These can be achieved through improved procurement,
order processing, and selling processes. Efficiencies can
also include faster order cycle times. E-business can
have an enormous impact on an enterprises
infrastructure, inventory, facilities, and transportation. Ebusiness models that utilize extensive backward and
forward integration will find their technology
infrastructures and call-center services dramatically
increased, while experiencing decreases in inventory
through improved supply channel cooperation, reduction
in facilities costs by centralizing or outsourcing
operations, and increases in direct or partner-based
transportation.
g. E-business plays an important role in SCM on Improved
Partner and Customer Segmentation
E-market platforms can be used to transform customer
segmentation and provide appropriate levels of services
to customers with different value.
h. E-business plays an important role in SCM on Efficient
Payment Transfer
E-business greatly facilitates the collection of payment.
Often, especially in retail sales, the payment for the
goods/services occurs at the moment of purchase either
through credit card, P-card, or the use of a third party
such as PayPal. Immediate payment can greatly increase
the financial float of companies like Dell, who can use
the funds generated from customers for investment way
before the thirty- to ninety-day window before they have
to pay their suppliers.

3.2. E-Business Also Affects SCM Function

Within and Between Organizations
E-business technology enhances SCM activities in terms
of information sharing. Data and information flow
smoothly within and between organizations:
a. E-business plays an important role in SCM on Intrabusiness EC
To support its build-to-order capabilities, significantly
improve its demand-planning and factory execution
accuracy, reduce order-to-delivery time, and enhance
customer service, Dell partnered with Accenture to create
a new, high-performance supply chain planning solution.
Now in place in Dells plants around the world, the
program, which paid for itself five times over during the
first 12 months of operation, enables Dell to adapt more
quickly to rapidly changing technologies and the
business environment, maintaining its position as a highperformance business. Dell also has automated its

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factory scheduling, demand-planning capabilities, and
inventory management using information technology and
e-supply chain models.
b. E-business plays an important role in SCM on Affiliate
Program
Dell provides affiliate partners the opportunity to link
from their Web sites to dell.com. Dell pays 2 to 4 percent
on any qualified sale made from clicking on Dells link
at the partners sites (referring buyers).
Dell has been one of Fortunes top five Most Admired
companies since 1999, and it continuously advances in the
rankings of the Fortune 500 and the Fortune Global 500.
Dell has over 100 country-oriented Web sites, and profits
are nearing $3 billion a year. If you had invested $10,000 in
Dells initial public offering (IPO) in 1987, you would be a
millionaire just from that investment.
In 2006, Dell opened physical stores to match its
competitors and customer demands. Dells major
competitor, HP, regained its top PC maker position in
2006, leaving Dell in second place, and stayed in the lead
through 2008.
Rapidly changing business conditions have forced Dell to
restructure its operations. Michael Dell returned to the CEO
position in 2006, and a restructuring of the company began
shortly thereafter. All sales to businesses are now managed
centrally, rather than from three regional headquarters
around the globe. In addition, in 2008 the company cut its
workforce by 8,000. It also launched a blog called
Direct2Dell. Dell also is expanding its business not only in
the computer industry but also in consumer electronics.

4. CONCLUSIONS AND PERSPECTIVES

4.1. Conclusions
E-business plays important roles in SCM as being practiced
by Dell Inc. E-business can drive new organizational forms
(such as a virtual organizations), fulfill certain tasks in the
inter-firm context and allow firms to improve supply chain
processes. Therefore, e-business has a vital role to play in
integrated SCM. SCM looks at chains (or networks) of
companies connected with each other through suppliercustomer relationships, in particular on the planning and
control within and among the supply chain partners.
A critical success factor for all participants in a supply chain
is customer satisfaction. At one end of the supply chain is
the end customer who creates the demand for the end
product. This demand indirectly produces the demand for
the intermediate and preliminary products and ultimately for
the raw materials. The better the supply chain works, the
stronger the partners competitive position on the market.

Dells e-business that had supported its SCM has run

efficiently, the utility for the customer increases in terms of
price, quality, and delivery time. This in turn leads to
happier customers, who generate more demand for the end
product and thus increase the revenue of all supply chain
partners. SCM is an approach that deals with the flows of
goods and information across entire logistic chains. Fig. 1
and 3 give an example of what the stations of such a chain
can look like: suppliers of the company, various departments
(e.g., purchasing, manufacturing, dispatching), distribution
centers, merchants (wholesale, intermediaries, retail), and
customers. Additional stations that are not shown in the
figure include shippers and their depots. The figure also
shows that the objects that flow through the chain include
not only goods and information but also money. The flow of
money goes in the opposite direction from the flow of
goods. Although the exchange of money is an important part
of the business relationships between the partners, it is
usually not explicitly considered in SCM. That is, SCM
focuses more on the flows of goods and information.
In the field of logistics, the flows of goods and information
have been examined for a long time. A traditional
differentiation of logistics was according to business
functions, for example, into procurement logistics,
production logistics, distribution logistics, and disposal
logistics. Later, the integration aspect was also taken into
consideration, and the term logistic chain came into use.
SCM has evolved from logistics, but it has a stronger focus
on the management of the chains, crossing business
processes, business functions, and even the boundaries of
the company. This means that SCM deals with the proper
functioning of the entire supply chain with all partners
included, not only with effective processes of one company.
SCM can be considered as the integrated, process-oriented
design, planning and control of goods, information, and cash
flows along the entire value chain from the customer to the
raw-material supplier with the aims of improving customer
orientation, synchronizing supply with demand, making the
production more flexible and responsive to the demand,
downsizing of the inventory along the value chain, and of
course the SCM would not work properly with being
supported by e-business technology as discussed in this case
study of Dells previous operations 1n 1994.
Some of the barriers to e-business adoption are related to
human factors (e.g. insufficient leadership, unwillingness to
cooperate, resistance to change, inertia, lack of trust,
personal insecurity, fear of losing jobs, threat of being by-

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passed by technology, communication problems and
difficulties in aligning the processes and cultures of partner
companies). Other barriers relate to structures, processes and
systems (e.g. lack of resources, the plethora of different
standards, lack of services provided by e-marketplaces).
Many organizations have focused on a few key e-business
services to date, but are not considering potential benefits
across the range of services available and across the supply
chain. Currently available e-business solutions are still some
way from covering the entire spectrum of business
requirements and relatively few options are readily available
to support or automate complex activities. They have the
potential to evolve from matchmaking or transaction support
focus to knowledge and trust networks, where common
workflows can enable SCM on a more widespread basis in
future. However, more research is required to better
understand these issues across a variety of business contexts
and sectors.
Highlighting the process-oriented approach to SCM is
important. Process orientation has many advantages. In
SCM, it is even more relevant because the business
processes involve various departments, not just in one
company, but in different companies. The attribute
integrated in the definition expresses that all partners in
the processes have to coordinate their activities. It is worth
noting that supply chain management includes not only the
planning but also feedback and monitoring, controlling, and
adapting the supply chain.

4.2. Perspectives
Dell is strong business case on IT investment and
management. The case study in Dell Inc. is just show case
that e-business plays a crucial role in enhancing SCM if
implemented successfully. Michael Dell, the founder of Dell
Inc. is also the owner (may be a director or president
director at the same time) of the company. So, the decisionmaking concerning about IT investment was easy to carry
out by the owner himself because Dell himself made his
own decision directly. For other companies, it may not be
the same due to complicated management decision making
on IT investment.
It is important to have insights on the critical success factors
that would affect e-business and SCM implementation; such
as top management support, assessment, software selection,
business process and re-engineering, customization, phased
implementation, testing/try run, user training, and final
rollout. E-business has not only to deal with technology, but
also a range of important human and organizational issues.
Without top management support, e-business is difficult to

implement successfully. For smaller firms in particular,

where resources are limited; the lack of financial resources,
managerial and technological skills and system integration
can inhibit e-business adoption. More adequate training and
education in e-business and change management is a critical
factor for the future, as companies tend to express hesitation
about the use of emerging e-business technologies.

5. REFERENCES
[1] IBM. i2 & Ariba, November 2000, E-marketplaces
changing the way we do business Whitepaper
published by Ariba (www.ibm-i2-ariba.com): p. 1
[2] Amor, D., 2000, The E-business (R)evolution,
Dedham, MA, Galileo Press: p. 5
[3] Turban, E., and Volonino, L., 2012, Information
Technology for Management 8th edition, 2012, John
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[4] Ross, David, F., 2011. Introduction to Supply Chain
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[5] ................., Introduction to Supply Chain Management
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6. ADDITIONAL READING

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Universe of Emerging Technologies and Science

ISSN: 2349 - 655X

Volume I Issue IV September 2014

[14] Andreas, Meier and Stormer, Hendrik, 2009, eBusiness and e-Commerce: Managing the Digital
Value Chain, 1st edition, Springer
[15] Adolfo, Crespo, Mrquez, 2010, Dynamic Modelling
for Supply Chain Management Dealing With Frontend, Back-end and Integration Issues, 1st edition,
Springer.
[16] Brown, V., Carol, DeHayes, W., Daniel, Hoffer, A.,
Jeffrey, Martin, Wainright E., and Perkins, C.,
William, 2012. Managing Information Technology,
7th edition, Pearson
[17] Blanchard, David, 2010. Supply Chain Management:
Best Practices, 2nd edition, John Wiley & Sons
[18] Bidgoli, H., 2010, Electronic Commerce, Principles
and Practices, California State University,
Bakersfield, U.S.A.
[19] Chaffey, D., Chadwick-Ellis, Fiona, Johnston, K.,
and Mayer, R., 2006, Internet Marketing: Strategy,
Implementation and Practice, 3th edition, Pearson
Education Limited. UK
[20] Chan, Henry, Lee, R., Chang, E., Dillon, T., 2001, ECommerce: Fundamentals and Application, 1st
edition, Wiley &Sons, Ltd.
[21] Christopher, Martin, 2011. Logistics & Supply Chain
Management, 4th edition, Pearson: pp. 1-15
[22] ---------------,2005, Logistics and Supply Chain
Management: Creating Value-Adding Networks, 3rd
edition, Pearson
[23] Cousins, Paul, Lamming, Richard, Lawson, Benn,
Squire, Brian, 2008. Strategic Supply Management:
Principles, Theories and Practice, 2nd, Pearson Inc.
[24] Combe, Colin, 2006, Introduction to E-Business:
Management and Strategy, 1st edition, Elseviel
[26] Gary P. Schneider, Gary, P., Electronic Commerce, 9th
edition, 2012, Cengage
[27] Harrison, Alan, and Van, Hoek, Remko, 2008.
Logistics Management and Strategy: Competing
through the supply chain, 3rd edition, Pearson Inc.
[28] Heizer, J., Render, B., 2011/2008. Operations
Management, 10th/9th edition, Pearson International
[29] John, T. Yee, and Seog-Chan Oh, 2013, Technology
Integration to Business: Focusing on RFID,
Interoperability,
and
Sustainability
for
Manufacturing, Logistics, and Supply Chain
Management, 3rd edition, Springer-Verlag London
[30] Kumar, Sameer, Zander, Matthew, 2007. Supply
Chain Cost Control Using Activity-Based
Management, Taylor & Francis Group
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Manoj, K., 2010, Operations Management:
Processes and Supply Chains, 9th edition, Prentice
Hall.
[32] Myerson, M., Judith, 2007. RFID in the Supply
Chain: A Guide to Selection and Implementation,
Taylor & Francis Group

[33] Meier, Andreas and Stormer, Hendrik, 2009,

eBusiness & eCommerce: Managing the Digital
Value Chain, Springer
[34] Monczka, Robert, M., Handfield, Robert, B.,
Giunipero, Larry, C., Patterson, James L., 2009,
Purchasing and Supply Chain Management, 4th
edition, South-Western
[35] Norris, Mark, and West, Steve, 2001, eBusiness
Essentials: Technology and Network requirements
for Mobile and Online Market, 2nd edition, John
Wiley & Sons
[36] Palmatier, George E., and Crum Colleen, 2003,
Enterprise Sales and Operations Planning:
Synchronizing Demand, Supply, and Resource For
Peak Performance, J. Ross Publishing, Inc.
[37] Ross, David, F., 2003, Introduction to e-Supply
Chain Management: Engaging Technology to Build
Market-Winning Business Partnerships, St. Lucie
Press
[38] --------------------, 2008, The Intimate With Supply
Chain: Leveraging the Supply Chain to
Manage the Customer Experience, St. Lucie Press
[29] --------------------------, 2004, Distribution Planning
and Control: Managing In The Era Of Supply
Chain Management, 2nd edition, Kluwer Academic
Publishers
[40] Strauss, Judy, and Frost, R., E-Marketing, 7th/6th
edition, 2014/2012, Pearson International Edition.
[41] Stadtler, Hartmut, and Kilger, Christoph, Supply
Chain Management and Advanced Planning:
Concepts, Models, Software, and Case Studies, 4th
edition, 2008, Springer
[42] Turban, E., King, D., Lee, J., Warkentin, M., &
Chung, H., M., Electronic commerce: A
managerial perspective, 2nd edition, 2002, Pearson
[43] Wisner, Joel, T., Tan Keah Choon, and Leong G.,
Keong, 2012, Principles of Supply Chain
Management: A Balanced Approach, 3rd edition,
Cengage
[44] Waters, Donald, 2010. GLOBAL LOGISTICS: New
Directions in Supply Chain Management, 6st
edition, KoganPage
[45] Wagner, Bret, J. and Monk, Ellen, F., 2013,
Concepts in Enterprise Resource Planning, 4th
edition, Cengage.

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