Re-Engineering the Supply Chain: a Systems Approach for the Electronic Commerce Age

Recent advances in electronic commerce have provided businesses of all types and sizes with the potential to improve competitive advantage. The potential benefits associated with the embracing of these new technologies include potential access to new markets on a global basis, more effective integration of upstream and downstream supply chain partners and better streamlining of internal and external business processes. In short, the technological potential exists to simultaneously improve customer service levels and to reduce supply
chain costs. However, if this potential is to be realised in practice there is a need to re-evaluate current supply chain configurations. A mismatch currently exists between the technological capability and the supply chain or logistical reality. This mismatch has sharpened the focus on the need for robust approaches to supply chain re-engineering. Traditional approaches to business re-engineering have been based on manufacturing systems engineering and business process management. A recognition that all companies exist as part of bigger supply chains has fundamentally changed the focus of re-engineering. Inefficiencies
anywhere in a supply chain result in the chain as a whole being unable to reach its true competitive potential. This reality, combined with the potentially radical impact on business and supply chain architectures of the technologies associated with e-commerce, requires organisations to adopt innovative approaches to supply chain analysis and re-design. This paper introduces a systems approach to supply chain re-engineering which is aimed at
addressing the challenges which the new electronic business environment brings with it. The approach, which is based on work with a variety of both conventional and electronic supply chains, comprises underpinning principles, a methodology and guidelines on good working practice, as well as a suite of tools and techniques. The adoption of approaches such as that outlined in this paper helps to ensure that robust electronic supply chains are designed and implemented in practice. This facilitates the removal of the major obstacles which many organisations have encountered in attempting to capitalise on the potential benefits of emerging electronic commerce solutions.