Adopting New Technologies for Supply Chain Management

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Transportation Research Part E 39 (2003) 95–121

Adopting new technologies for supply chain management
Kirk A. Patterson a, Curtis M. Grimm b, Thomas M. Corsi



Department of Operational Sciences, Graduate School of Engineering and Management, Air Force Institute of Technology, USA b Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA

Abstract Integration of supply chain activities and the technologies to accomplish it have become competitive necessities in most industries. Accordingly, the trend toward greater use of supply chain technologies is on a clear path forward. As one manager has noted: ‘‘With almost daily technology advancement globally in every facet of the business, organizations need to synchronize by adopting and implementing new electronic commerce and supply chain technology in order to protect market share, not to mention improve market penetration’’. This paper develops a model of the key factors influencing the adoption of supply chain technology. The following set of variables were hypothesized to have a significant impact upon the pace of technology adoption: firm size, organizational structure, integration of supply chain strategy with overall corporate strategy, past financial performance, supply chain partner pressure, transaction climate and environmental uncertainty. The model provides a better understanding of the supply chain technology diffusion process. The paper also includes a survey, which has been developed to test the model. Ó 2003 Elsevier Science Ltd. All rights reserved. Keywords: Supply chain management; Technologies

1. Introduction Business organizations today face a more complex and competitive environment than ever before (Ellram, 1991; Srinivasan et al., 1994; Porter and Stern, 2001). As trade barriers crumble and less developed countries enter the competitive marketplace, firms now confront a greater

Corresponding author. Tel.: +1-301-405-2197. E-mail addresses: (K.A. Patterson), (C.M. Grimm), tcorsi@ (T.M. Corsi). 1366-5545/03/$ - see front matter Ó 2003 Elsevier Science Ltd. All rights reserved. PII: S 1 3 6 6 - 5 5 4 5 ( 0 2 ) 0 0 0 4 1 - 8



K.A. Patterson et al. / Transportation Research Part E 39 (2003) 95–121

number of competitors able to introduce new products and services faster and cheaper than ever before (Garten, 1998). The ever-expanding capabilities of information technology with the concomitant reduction in investment costs allow capital and information to flow almost instantly throughout many parts of the world. Furthermore, as consumers have become more discriminating and demanding (Ellinger et al., 1997), product life cycles have been shortened, forcing firms to contract time to commercialization (Lovelace et al., 2001) and provide higher levels of customer service and customized products. Consequently, most industries and firms have entered into a ‘‘hyper-competitive’’ marketplace characterized by an increase in competition, uncertainty, and complexity (DÕAveni, 1994; DÕAveni, 1999; Merrifield, 2000). In this business environment, innovation of organizational processes and products is a major business challenge (Tornatzky and Fleischer, 1990) and critical for firm success (DÕAveni, 1994; Veliyath and Fitzgerald, 2000). Innovation has been defined as ‘‘. . . adoption of an internally generated or purchased device, system, policy, program, process, product, or service that is new to the adopting organization’’ (Damanpour, 1991, p. 556). Merrifield (2000, p. 42) argues, ‘‘The most viable strategy for both generating and sustaining a competitive advantage has become one of both continuous innovation and corporate renewal’’. In the past, business organizations focused on reducing costs and...
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