New Technology Implementation: 3 Points for Supply Chain Consideration
26th April 2018 | Ozlem Bak
The implementation of smart technology has been embraced by consumers and businesses worldwide, with Amazon taking the lead in terms of logistics.
Amazon first announced the development of “Amazon Prime Air” in 2013 and five years later, drones are getting closer to being used for sky-bound logistics, with the market worth more than $127 billion globally (PWC, 2018).
Earlier this year, the retail giant also patented an electronic wristband that tracks warehouse workers’ movements, aiming to streamline the fulfilment of orders.
However, with every new technology, the associated cost of implementation and change brings a new set of challenges for supply chains. Based on previous research on RFID, B2B integration in the automotive industry, three key aspects need to be considered before new technology implementation:
1. Identify the Scope of Change
Understanding the impact of new technology on supply chain transformation is imperative, as this will enable the identification of supply chain scope; highlighting which business units in the supply chain will be affected.
Previous research indicated that organizations with different functions or departments often use incompatible systems and objectives, requiring different levels of investment and training. In this scenario, the identification of supply chain scope has an impact on resources at the business unit level.
2. Speed of Change
Depending on the nature of change, the speed of transformation and its implementation (rapid versus gradual) may also be difficult to ascertain and problematic to define.
Research indicates that the scope of supply chain based on the eBusiness technology can vary from a one-time effort to a series of waves lasting 5-10 years.
3. Get Support Early
With any system, especially in an extended supply chain network, getting site-wide support is necessary. If a standardised and streamlined supply chain support is lacking, this can have a negative impact on the e-business technology integration and, in some cases, hinder site-wide integration.
A study conducted on supplier-buyer relationships when implementing B2B technological changes indicated the reluctance of suppliers’ acceptance, due to the potential cost and value as well as the ability to serve every buyer who may use distinctly different systems.
So, before an organisation starts investing in new eBusiness technologies, it’s important to evaluate the top three factors that will affect implementation. Once armed with the knowledge of potential costs, time-scales and departmental issues, the companies can begin to weigh up the potential business value for implementing new e-business technologies.
About the Author
Dr Ozlem Bak is a Senior Lecturer at Huddersfield University, teaching operations management, purchasing and supply chain management. She is also author of E-Business and Supply Chain Integration. This essential book examines supply chain theories along with real-life cases and examples from industry to illustrate how e-business can enhance supply chain integration and highlights the negative outcomes when it is neglected and poorly managed.