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Research method Management

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Transcript of Research method Management

Effects of enterprise
technology on supply chain collaboration: analysis of China-Linked Supply chain
Today's Outline:
1. Introduction
2. Theoretical Development
3. Research Methodology
4. Findings
5. Conclusions
6. Personal comments
1. Introduction
By the end of twentieth century, companies from both North America and Europe wanted to reduce their costs to meet customer demands. In order to do that companies needed to locate a low-cost manufacturing centre. -> Looking into China which could help the global supply chain to grow. -> Past 15 years many US and European companies moved their manufacturing operations to China, either through outsourcing or through joint ventures.
This research aims at developing a better understanding of association between enterprise IT, adaptive strategy and supply chain collaboration in China-linked supply chain. China is the starting point of an enormous and growing number of global supply chain, it is therefore important to understand Chinese firms leverage enterprise IT to facilitate supply chain collaboration
2. Theoretical Development
2 phases


A picture tells more than a thousand words....
Research method Management
This Lovely Lady is the Author
Enterprise Information Systems
Vol. 6, No. 1, February 2012, 55-77
Ling Li
Department of ITDS, Old Dominion University, Norfolk, USA
In order to make this a reality companies needed advanced Information Technology (IT). IT creates a virtual bridge for information sharing and makes it possible for companies from other continents to link their businesses with China-Linked supply chain.
When it comes to Enterprise Information Technology it integrates business functional areas and links suppliers and customers of the entire supply chain. E-solutions are a must have weapon for the supply chain in order to improve collaboration to compete in the global market.
Many manufacturing producers have adopted the collaborative strategy on production planning, demand forecasting and inventory replenishment to provide the end user with what he wants, how he wants it and when he wants it.
Secondly, provide an analysis on supply chain collaboration in the context of enterprise ownership which underscores China's economic reform. There has been no report that focusing on the synergistic relationship between enterprise ownership, enterprise IT assimilation and China-Linked supply chain collaboration
Finally, this study intends to offer guidelines for practicing managers, who are doing business in China or seek to form a collaborative relationship with Chinese firms. By providing a synergistic supply chain collaboration analysis, managers will be able to enhance their performance through understanding the effects of enterprise ownership on supply chain collaboration which is facilitated by the enterprise IT.
Phase 1: Is to investigate the effects of enterprise ownership on enterprise technology assimilation and collaboration. Since enterprise ownership is a categorical variable with several groups, Analysis of Variance (ANOVA) is applied to analyze:
The association between enterprise ownership and the level of enterprise technology assimilation and
the association between enterprise ownership and supply chain collaboration
Phase 2: Is to investigate the effects of the enterprise technology on collaboration and performance of China-Linked supply chain. And a structural equation modelling is employed to test the mulit-phased conceptual model which I will show you....
Two constructs on the left are used for enterprise technology assimilation F1 and F2. They define enterprise technology assimilation for exploitation as the use of technology for the execution of supply China routine process. And Exploration as the implementation of unstructured and strategic supply chain activities.
The two constructs in the middle is about supply chain collaboration F3 and F4. Collaboration and coordination in planning is defined as joint plan for supply chain key activities, while operational collaboration and coordination are defined as information sharing to achieve efficient task execution.
The constructs on the right and side measures supply chain performance F5 and F6. Operational benefits are defined as first-order benefits that arise directly from effective supply chain collaboration. And conversely, benefits for market performance arise through better operational performance, supported by supply chain collaboration.
6 Constructs
Literature review
Enterprise ownership of Chinese manufacturing firms
30 years ago Xiaoping Deng launched a series of sweeping economic reforms which opened up China's market to the world.
In 1994, business management became independent legal entities, with separation of ownership and management (Li 2000, Wei and Geng 2008).
Moving from a centrally planned economy to a hybrid of planned economy with market-oriented system has opened up China's market to foreign direct investment and reduced the number of state owned enterprises by laying off non-productive workers and created new dynamic types of enterprise ownership such as village-owned enterprise and foreign-company owned enterprises.
This structural change within China's manufacturing sector laid foundation for China to become a world manufacturing centre as well as a key player of global supply chain.
Enterprise IT development in China
China invested aggressively in IT highway -> Between 1999 and 2002, China invested 106 million landlines, attracted 163 million new cell phone subscribers and 36 million new cable television subscribers (WEF 2004, Raven et al. 2007). According to Economist (2005), China had the world's largest broadband Internet market. -> China was building an infrastructure to sustain future growth in enterprise IT and to support the needs of global supply chain.
The fast development of enterprise technology in China attracted global corporations (Raven et al. 2007)
Adaptive process concept toward
enterprise IT assimilation
Adaptive process is in the realm of organization learning. A key idea of studies of adaptive process is to seek a balance between the exploration of new possibility and the exploitation of old certainties.
The exploitation of enterprise IT in supply chain collaboration involves using enterprise technology to facilitate routine business practices. Supply chain collaboration issues fall in this category include order receiving, order tracking, new accounts establishment, existing account maintenance, invoicing and material. Exploitation approach tends to result in operational benefits such as lead time improvement and inventory accuracy (Zhou & Benton, 2007).

Exploration is defined by terms such as search, innovation and discovery, with benefits occuring over a longer time horizon and beyond the organization, it involves uncovering new methods to solve long-term supply chain collaboration problems.
Firms oriented to exploitation, use enterprise IT for information sharing, channel collaboration and integrated forecasting and inventory replenishment (Xu et al. 2007, Wu et al. 2009). This approach emphasis on efficiency, consistency and process control, and exploration approach involves risk taking and experimentation.
Enterprise technology and supply chain collaboration
In recent years, retailers have initiated collaborative agreements with their supply chain partners to establish ongoing planning, forecasting and replenishment process.
The objective of supply chain collaboration is to improve demand forecasts and inventory management, with the right products delivered at right time to the right location, with reduced inventories, avoidance of stock-outs and improved customer service. The value of supply chain collaboration lies in the broad exchange of planning, forecasting, and inventory information to improve information accuracy when both the buyer and the seller collaborate through joint knowledge of sales, promotions and relevant supply and demand information.
Relationship between supply chain collaboration and performance
Performance assessment is focused on of supply chain collaboration on operations performance (OP) and market performance (MP).
Collaboration is critical for successful supply chain and organizational performance. Supply chain management literature indicates that facilitated by enterprise IT supply chain collaboration can benefit order fill rates, delivery promises and delivery lead time (Wang et al. 2005, Wu 2007, Zhou and Benton 2007).
Companies that are able to establish collaborative relationship with their supply chain partners will have a significant competitive edge over their competitors. And IF enterprise information systems are implementer correctly, it will enable firms to manage its inventory data in an efficient manner, and customer order will be taken promptly and fulfilled efficiently.
11 Hypotheses
Hypothesis 1:
Different types of enterprise ownership lead to different levels of ability to adapt to the exploitation of enterprise information technology.

Hypothesis 2:
Different types of enterprise ownership lead to different levels of ability to adapt to the exploration of enterprise information technology.

Hypothesis 3:
Different types of enterprise ownership affect firm’s collaborative planning ability with supply chain partners.

Hypothesis 4:
Different types of enterprise ownership affect firm’s collaborative forecasting and replenishment ability with supply chain partners.

Hypothesis 5:
The higher the level of enterprise information technology use for exploitation the greater the supply chain perceived level of collaborative planning.

Hypothesis 6:
The higher the level of enterprise information technology use for exploitation the greater the supply chain perceived level of collaborative forecasting and replenishment.

Hypothesis 7:
The higher the level of enterprise information technology use for exploration the greater the supply chain perceived level of collaborative planning.

Hypothesis 8:
The higher the level of enterprise information technology use for exploration the greater the supply chain perceived level of collaborative forecasting and replenishment.

Hypothesis 9:
The higher the level of collaborative planning the better the execution of collaborative forecasting and replenishment.

Hypothesis 10:
CPFR in supply chain will directly benefit a firm’s operations performance.

Hypothesis 11:
Better operations performance will directly benefit supply chain market performance.

3. Research Methodology
The research instrument used was based upon existing literature (Zhou and Benton, 2007) and pretested by a group of practicing managers in China, who had enterprise IT implementation experience and supply chain collaboration knowledge.
The instrument was then revised according to the suggestions from the managers. The revised questionnaire was sent in year 2009 to a group of
1000 manufacturing firms
suggested by operations management laboratory in Shanghai. And a follow-up effort (such as phone calls and mails) were made to encourage the chosen sample to participate in the survey.
220 were received
. So the effective response rate was 22%.
Finally,
177 responses
were used for analysis in this study.
43 cases
were dropped due to some incomplete responses required in the study.
Research Plan
This plan is divided into two steps
Step one is to investigate the effect of enterprise ownership on enterprise technology assimilation. Therefore ANOVA is applied for this analysis. ANOVA is a statistical method for determining the existence of differences among several population means. And it is an appropriate method to analyze the differences of the relationship between enterprise ownership and enterprise technology use in China.
Second step is to investigate the effects of enterprise technology on China-linked supply chain collaboration and performance. And a structural equation model is employed to test the hypothesised relations among the 6 constructs. The structural equation modelling measures multiple relationships between independent and dependent variables, thus accommodating aggregated dependent relationships simultaneously in one comprehensive model.
Research Instruments and Constructs
The research instrument was first written in English and then translated to Chinese. The translated instrument was tested by a group of six Chinese managers and two university professors to make sure that the expression is idiomatic, clear and complete in the Chinese manufacturing environment. Later the instrument was refined based on the suggestions from Chinese scholars and practicing managers. The survey instrument was translated back to English for analysis after the data were collected.
The 6 constructs based on figure 1 are used to test the hypotheses. 2 are used for enterprise IT assimilation: Enterprise information technology for exploitation (EIT) and enterprise information technology use for exploration (ERT).
Enterprise technology use for exploitation as the use of EIT for production scheduling, material requirement and the implementation of structured inter-firm process such as order processing and order shipment facilitation.
Enterprise technology use for exploration as the execution of long term and less-structured activities such as identifying the trends in sales and operations management and leveraging firm’s expertise to create new markets and production.
These items are measured on a seven-point Likert scale, ranging from not important (1) to absolutely critical (7).
Research instrument and constructs
Supply chain collaboration is measured by two constructs; one deal’s with collaborative planning (CP) and the other collaborative forecasting and replenishment (FR). And they structure collaborative activities to two constructs because one is the planning level and the other at the operational level (VIVC, 1998).

The collaboration constructs are also assessed on a seven-point Likert scale, ranging from significantly lower (1) to significantly higher (7) as compared to previous supply chain activities.


The operations performance construct is based on the published operations management literature (Kelle and Akbulut 2005, Zhou and Benton 2007). Inventory represents the material flow in supply chain and is the physical item that the suppliers send to its customers. The focus is placed on inventory accuracy, safety stock reduction, delivery lead time and order fulfillment lead time.

Operations performance items are measured from not improved (1) to significantly improved (7).

The Market performance construct has empirical support. The most commonly cited financial performance indicators are market share growth, economic growth and customer retention (Olhager et al. 2003, Steermann 2003).

The performance items are measured on a seven point Likert scale, ranging from significantly lower (1) to significantly higher (7) as compared to the firm’s preimplementation performance.
All survey items that were used for measurement of constructs are listed in this table
Validity
Construct validity, in general, indicates quality of measurement. Construct validity approach, a method used in this study. The convergent validity method applies several items for one scale, and each item in the same scale is viewed as a different approach to assess the same construct.

Andersson and Gerbing (1988) suggested that convergent validity can be measured using t tests for factor loading. In this case the convergent validity is determined if all factor loadings for the indicators measuring the same construct are statistically significant. So in this study, all t tests associated with the latent variables are significant at p value < 0.01. This result indicates that all items loaded to the scale are effectively assessing the same construct.
4 . Findings
ANOVA - Findings on the relationship between enterprise ownership and enterprise technology implementation and supply chain collaboration
This relationship was analyzed using a one-way ANOVA. This analysis of ANOVA revealed a significant effect for using enterprise IT for exploration. Using Tukey’s Honestly Significant Difference test (HSD) test showed that foreign-invest and joint venture firms scored significantly higher on using enterprise technology for exploration than did local collective firms. Additionally, foreign-invest and joint venture firms scored higher on using enterprise technology for exploitation than that of local collective firms and private-owned firms.
The relationship between enterprise ownership and supply chain collaboration was analyzed using a one-way ANOVA. There is a variation in collaborative planning, collaborative forecasting and replenishment among different enterprise ownerships; these differences are not statistically significant.
The findings that relate to the 4 hypotheses concerning the association between enterprise ownership and enterprise technology use and supply chain collaboration are presented as follow:
Hypothesis 1:
Different types of enterprise ownership affect firm’s ability to adapt to the
exploitation of enterprise information technology. This hypothesis is supported at
p < 0.10.
Hypothesis 2:
Different types of enterprise ownership affect firm’s ability to adapt to the
exploration of enterprise information technology. This hypothesis is supported at
p < 0.05.
Hypothesis 3:
Different types of enterprise ownership affect firm’s collaborative planning ability with supply chain partners. This hypothesis is not supported.

Hypothesis 4:
Different types of enterprise ownership affect firm’s collaborative
forecasting and replenishment ability with supply chain partners. This hypothesis is
not supported.

The results of structural model tested evaluating overall model fit is shown in this figure
This table provides a summary of hypothesis tests for the structural equation model presented in figure 1. The structural model is supported using fit statistics from table 5 (w2/df ¼ 1.06, GFI ¼ 0.916, AGFI ¼ 0.890, CFI ¼ 0.993, RMSEA 5 0.018).
Hypothesis 5
: The higher the level of enterprise information technology use for
exploitation the greater the supply chain perceived level of collaborative planning. The path that links enterprise technology and collaborative planning is not significant.

Hypothesis 6
: The higher the level of enterprise information technology use for
exploitation the greater the supply chain perceived level of collaborative forecasting and replenishment. This hypothesis is supported at p < 0.10 (g2 ¼ 0.157).

Hypothesis 7
: The higher the level of enterprise information technology use for
exploration the greater the supply chain perceived level of collaborative planning. This hypothesis is supported at p < 0.01 (g3 ¼ 0.462).

Hypothesis 8:
The higher the level of enterprise information technology use for
exploration the greater the supply chain perceived level of collaborative forecasting and replenishment. This hypothesis is supported at p < 0.01 (g4 ¼ 0.257).

These results suggests that applying enterprise technology for exploitation directly affects the operational collaboration such as demand forecasting and inventory replenishment. However, it does not have a significant impact on collaborative planning.
Applying enterprise technology for exploration, which focuses on identifying the trends in sales and operations management and leveraging firm’s expertise to create new markets and production, has direct positive effect on both collaborative planning and collaborative forecasting and replenishment. So the results from this study indicate that exploration may have an overarching impact on supply chain collaboration. These findings suggest that enterprise technology use create a unique and specific value to collaborations within China-linked supply chain.
The hypothesis that relates to the collaborative planning construct to collaborative forecasting and replenishment.

Hypothesis 9:
The higher the level of collaborative planning the greater the supply chain perceived level of collaborative forecasting and replenishment. This hypothesis is supported at p < 0.01 (b1 ¼ 0.390).

In order to achieve better inventory and lead time performance, supply chain managers have to be able to get involved with the complexity of collaborative planning with multiple echelons in a supply chain and implement the plan through demand forecast and inventory replenishment. This finding is consistent with the result obtained.

And the hypotheses for supply chain collaboration to OP and MP.

Hypothesis 10
: Collaborative forecasting and replenishment in supply chain will directly
benefit a firm’s operations performance. This hypothesis is supported at p < 0.01
(b2 ¼ 0.284).
Hypothesis 11
: Better operations performance will directly benefit supply chain market
performance. This hypothesis is supported at p < 0.01 (b3 ¼ 0.619).

The findings suggest that collaborative forecasting and replenishment will significantly benefit operations performance. Better operations performance is found to have a significant impact on firm’s MP. And these findings support the idea that for China-linked supply chains to derive for better OP and MP, collaboration is needed.

6 of 7 have been supported by the results of the statistical analysis using data from 177 Chinese firms. Out of these results some tentative conclusions can be made.

First, enterprise IT implementation significantly affects collaborative planning, forecasting and inventory replenishment in a supply chain.

Second, supply chain collaboration benefits firm’s operations performance.

Finally, market competitiveness is influenced by operations performance.

In Summary
5. Conclusion
This study considers how collaborative activities mediate the association between enterprise IT assimilation and MP in China-linked supply chain. We draw upon an empirical research from 177 Chinese companies to illustrate what collaborative activities will enable supply chain to achieve better operational and MP, given their particular enterprise IT implementation circumstances.
The author has provided with three major contributions throughout this study and those are:

1. Uncovered importance of leveraging enterprise IT use through supply chain collaboration

2. Identified the relationship between enterprise ownership and enterprise technology use and China-linked supply chain collaboration

3. Illustrated the association between collaborative activities, operational benefits and supply chain MP.


The results of the study indicates that, assisted with advanced IT, successful collaboration among trading partners does affect the firm’s operational and MP if effective communication in the process of supply chain coordination is fostered.
6. Comments
Supply chain collaboration is difficult to implement and understand, but also when and with whom to collaborate with.
Trust among partners is an interesting field to further examine
This study is an interesting paper that could affect both Chinese firms and foreign firms perspective on supply chain collaboration.......
Thank you for listening

the end!
Name: Ming Thoi
StudentID: LX14078
2015-05-11
Article Assigned:

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