The recent advancement of information and communication technologies, in particular the Internet, transformed the traditional economy into network-based economy where e-business plays an important role. Globalization of the markets has lead to greater competition. In order to achieve efficient supply chain management in this global competitive environment, many companies nowadays are turning to Internet technologies to virtualize its supply chain processes. Advanced technologies enabled to consumers to have access to many suppliers and to find the supplier that provides services levels desired by customer. Internet created opportunities for supply chain reconfiguration and it is the driving force for the supply chain virtualization. The impact of Internet on SCM is a focus area of many managers and researchers. E-supply chain improves SCM decisions by providing real-time information and allowing coordination among trading partners. Doing business on the web enabled creation of new B2B marketplaces, which are called e-hubs. However, there are some critical issues, such as mistrust and competition throughout supply chain which prevent the evolution of supply chain management. This paper aims to enlighten definition of e-SCM and e-hubs, describe virtual e-chain model, as well as, benefits and concerns with e-SCM integration will be discussed.
Definition of e - Supply Chain Management (e-SCM)
To define e-SCM, it is important to know what the supply chain management is. There are many definitions of supply chain management proposed by the literature. Hertz (2006) defines supply chain management as a network of firms involved in upstream and downstream flows from sub-supplier to ultimate customer which uses information technology to help support and manage the links in that particular network. According to O´Brian & Marakas (2009) a supply chain consists of relationships between suppliers, customers, distributors, and other businesses. Stock & Boyer (2009) suggest a consensus definition according to qualitative study of 173 definitions of SCM published in multiple journals and books. Supply chain management is “ the management of a network of relationships within a firm and between interdependent organizations and business units consisting of material suppliers, purchasing, production facilities, logistics, marketing, and related systems that facilitate the forward and reverse flow of materials, services, finances and information from the original producer to final customer with the benefits of adding value, maximizing profitability through efficiencies, and achieving customer satisfaction” (Stock & Boyer, 2009, p. 17).
The e-supply chain connects suppliers, trading partners and customers on the base of a virtual network as one collaborating unit (Manthou, Vlachopoulou & Folinas, 2004). Lancaster, Yen and Ku (2006) emphasize that e-SCM must integrate the internet in order to achieve fluent information flow throughout the supply chain. Technology allows this communication to be automated, so every partner in the supply chain has an access to real-time information. The automated communication limits the amount of paperwork, filing and record keeping. The key factor in SCM is inventory, however in e-SCM the key factors are information and knowledge and the collaboration of all partners is of great importance (Manthou, Vlachopoulou & Folinas, 2004).
From EDI to e-HUB
The earliest information systems invented for supply chains supported mainly particular functions of supply chains, such as purchasing department. These systems were often developed individually for each company to match internal departmental processing requirements (Sherer, 2005). Interorganizational coordination was accomplished with electronic data interchange (EDI). EDI allows electronic exchange of business transaction documents, such as purchase orders, invoices and shipping notices over the internet between supply chain...
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