E-Business Impact on SCM in the apparel industry operating between a developing and a ...

327 Pages·2007·1.61 MB·English

E-Business Impact on SCM in the apparel industry operating
between a developing and a developed economy
A Thesis submitted for the degree of Doctor of Philosophy
By
Asanka Hiroshana Horadugoda Gamage
Faculty of Enterprise and Innovation
Buckinghamshire Chilterns University College
Brunel University
February 2007
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Abstract
This thesis examines the impact of e-Business in the B2B segment of the Supply Chain
between UK retailers and Sri Lankan manufacturers in the apparel sector.
The literature review explored four interrelated themes, two of them informed by an
exploratory study. Research collating these four themes is scarce, especially in the
apparel sector although there is considerable research on supply chain management and
information sharing, which adopts a quantitative approach. However, there is a relative
lack of qualitative research into behavioural issues. Based on the literature review, 12
main research questions were formulated.
Following a qualitative, approach respondents in five Sri Lankan apparel manufacturers
were interviewed in an explanatory study comprised of 35 interviews. An innate
analytical framework consisting of themes, attributes and categories (TAC) was
developed for data analysis. A conceptual model incorporating three category
combinations was developed, disclosing internal, external and holistic reasons for ICT
implementation.
Analysis of the findings suggests that, more than speed of delivery, visibility of
information is the main benefit facilitated by new ICT, compared with traditional
methods. The findings indicate that security is the main concern and the main barrier is
remote plant location for conducting e-Business. The data indicate that 80 per cent of
investigated companies do not have an appropriate level of ICT capability. Moreover, a
manufacturer’s communication capability and information sharing are mainly decided
by the dependency on the lead firm. Manufacturers that deal with multiple lead firms
experience compatibility problems due to the lack of a hybrid system. Manufacturers
also need to set realistic expectations for a communication system and employee
motivation should be included in the evaluation criteria. In conclusion, building a few
longer-term relationships, including an information sharing policy is considered crucial
for achieving the true potential of e-Business.
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Contents
Abstract.......................................................................................................................ii
Contents.....................................................................................................................iii
List of Illustrations...................................................................................................viii
List of Tables..............................................................................................................ix
List of Appendix..........................................................................................................x
Acknowledgements...................................................................................................xii
Abbreviations...........................................................................................................xiv
CHAPTER 1 INTRODUCTION................................................................................1
1.1 Introduction to the thesis......................................................................................1
1.2 Aim of the research..............................................................................................2
1.3 Exploratory fieldwork..........................................................................................2
1.4 Research site........................................................................................................6
1.4.1 Apparel industry............................................................................................7
1.4.2 Economic conditions....................................................................................10
1.4.3 Telecommunication industry........................................................................11
1.4.4 Port services................................................................................................13
1.5 Structure of the thesis.........................................................................................15
CHAPTER 2 LITERATURE REVIEW..................................................................17
2.1 Introduction.......................................................................................................17
Section One - SCM....................................................................................................18
2.2 What is Supply Chain Management?..................................................................18
2.2.1 Defining the Supply Chain...........................................................................19
2.2.2 Defining Supply Chain Management...........................................................22
2.2.3 Origins of Supply Chain Management.........................................................32
2.2.3.1. Evolution of Supply Chain Management - A theoretical perspective.....34
2.2.3.2 SCM as an extension to the purchasing function....................................40
2.2.4 A definition of supply chain and supply chain management.........................41
2.3 Collaborative Buyer-Supplier Relations (BSR)..................................................43
2.3.1 Lead Firm in the Supply Chain....................................................................45
2.4 SCM operational performance............................................................................46
2.4.1 Logistic strategies ……………………………………………………………51
2.5 Summary of section one.....................................................................................54
Section Two - e-Business..........................................................................................55
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2.6 Introduction.......................................................................................................55
2.7 Analysing e-Commerce and e-Business definitions............................................60
2.7.1. Observations from Appendix L...................................................................61
2.7.2 Main reasons for not choosing a definition from Appendix L.......................63
2.7.3 A definition of Electronic Business..............................................................64
2.7.4 Scope of Electronic Business.......................................................................65
2.7.5 Evolution of e-Business in SCM..................................................................70
2.7.6 Limitations of previous research on e-Business............................................73
2.8 Summary of Section Two...................................................................................75
Section Three - Information sharing........................................................................76
2.9 Introduction.......................................................................................................76
2.10 Coordination....................................................................................................79
2.10.1 Push and pull systems................................................................................80
2.10.2 Information sharing model.........................................................................82
2.11 Previous research on information sharing.........................................................85
2.12 Summary of section three.................................................................................91
2.13 Research focus.................................................................................................92
2.13.1 Comparing SCM with e-Business to SCM without e-Business...................93
2.13.2 Identify the level of information sharing....................................................93
2.13.3 Identify the type of information sharing.....................................................94
2.13.4 Buyer-supplier relationships.......................................................................94
2.13.5 Identify actual and perceived impact..........................................................95
CHAPTER 3 METHODOLOGY.............................................................................97
3.1 Introduction.......................................................................................................97
3.2 Research plan.....................................................................................................99
3.2.1 Exploratory, descriptive and explanatory studies........................................100
3.3 Research process..............................................................................................102
3.3.1 Research philosophy and approach............................................................104
3.3.1.1 Grounded theory………………………………………………………..105
3.3.2 Research strategy.......................................................................................106
3.3.2.1 Unit of analysis....................................................................................109
3.3.2.2 Extent of empirical field......................................................................110
3.3.2.3 Strategy selection.................................................................................110
3.3.3 Time horizons............................................................................................112
3.3.4 Data quality criteria...................................................................................113
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3.4 Data access and data collection method............................................................114
3.4.1 Choosing participants (companies).............................................................114
3.4.2 Choosing respondents (interviewees).........................................................116
3.5 Accessing data.................................................................................................118
3.5.1 Initial information gathering......................................................................118
3.5.2 Conduct of interviews................................................................................119
3.5.2.1 Types of interviews; purpose, outcome, critique...................................119
3.5.2.2 Interview structure...............................................................................120
3.5.2.3 Language.............................................................................................122
3.5.2.3 Record keeping....................................................................................123
3.6 Data transcription, management and analysis...................................................124
3.6.1 Data transcription......................................................................................124
3.6.2 Data management......................................................................................124
3.6.3 Data analysis..............................................................................................124
3.7 Summary.........................................................................................................126
CHAPTER 4 DATA ANALYSIS FRAMEWORK................................................128
4.1 Introduction.....................................................................................................128
4.2 TAC framework...............................................................................................128
4.2.1 Reasons for developing TAC.....................................................................130
4.2.2 Category combinations..............................................................................131
4.2.3 Definitions.................................................................................................133
4.2.3.1 Themes................................................................................................133
4.2.3.2 Attributes.............................................................................................133
4.2.3.3 Categories............................................................................................134
4.2.3.4 Data Matrix.........................................................................................137
4.2.3.5 Data Files............................................................................................138
4.3 Interrelated chapters - Link between the category combinations.......................138
4.4 Preview of the findings chapters.......................................................................140
CHAPTER 5 INFORMATION SHARING: PC (cid:177)LF............................................143
5.1 Introduction.....................................................................................................143
Section One.............................................................................................................144
5.2 Positives..........................................................................................................144
5.2.1 Visibility....................................................................................................145
5.2.2 Cost reduction............................................................................................148
5.2.3 Disintermediation......................................................................................149
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5.2.4 Reduce workload.......................................................................................150
5.2.5 Faster cycle time........................................................................................151
5.2.6 Real time information................................................................................153
5.2.7 Problem prevention/early detection............................................................154
5.2.8 Accuracy of information............................................................................156
5.2.9 Clarity of information................................................................................158
5.2.10 Quantity of information...........................................................................159
5.2.11 Type of information.................................................................................161
5.2.12 Informed decision-making.......................................................................162
5.2.13 Better rapport/relationship........................................................................164
5.2.14 Staff learning new skills...........................................................................165
5.2.15 Other positive aspects..............................................................................166
Section Two.............................................................................................................168
5.3 Negative aspects..............................................................................................168
5.3.1 Security.....................................................................................................169
5.3.2 ICT dependency.........................................................................................170
5.3.3 Other negative aspects...............................................................................170
Section Three..........................................................................................................172
5.4 Barriers............................................................................................................172
5.4.1 Country infrastructure................................................................................172
5.4.2 Remote location of plant............................................................................173
5.5 Summary PC- LF.............................................................................................173
CHAPTER 6 INFORMATION SHARING POLICY PC-LF-RLF......................175
6.1 Introduction.....................................................................................................175
6.2 Relationship with customer(s) and suppliers.....................................................177
Section One.............................................................................................................180
6.3 ICT Implementation.........................................................................................180
6.3.1 External influence......................................................................................181
6.3.2 Benchmarking...........................................................................................183
6.3.3 Compatibility of systems...........................................................................184
Section Two.............................................................................................................185
6.4 Access control..................................................................................................185
6.4.1 Control of the SC.......................................................................................186
6.4.2 Access to customer....................................................................................189
6.4.3 Preserving competitive advantage..............................................................192
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6.4.4 Information sharing policy.........................................................................193
6.5 Summary of PC-LF-RLF.................................................................................194
CHAPTER 7 PC-LF-RLF-AE................................................................................196
7.1 Introduction.....................................................................................................196
Section One.............................................................................................................197
7.2 Current status...................................................................................................197
7.2.1 Level of EB...............................................................................................198
7.2.2 Visibility....................................................................................................204
7.2.3 Limitations of current systems...................................................................208
Section Two.............................................................................................................210
7.3 Evaluation........................................................................................................210
7.3.1 Evaluation criteria......................................................................................211
7.3.2 Evaluation of systems................................................................................214
Section Three..........................................................................................................217
7.4 Expectations....................................................................................................217
7.5 Summary of PC-LF-RLF-AE...........................................................................220
CHAPTER 8 CONCLUSIONS..............................................................................222
8.1 Introduction.....................................................................................................222
8.2 Aim.................................................................................................................222
8.3 Thematic approach...........................................................................................223
8.4 Research questions...........................................................................................223
8.5 Findings by category combinations..................................................................224
8.5.1 First combination PC-LF...........................................................................227
8.5.2 Second combination PC-LF-RLF...............................................................229
8.5.3 Third combination PC-LF-RLF-AE...........................................................231
8.6 Conclusions.....................................................................................................233
8.7 Research contribution......................................................................................239
8.7.1 Use of TAC for academic and business communities……………………... 240
8.8 Reflections on and limitations of the research..................................................241
8.9 Recommendations for further research.............................................................243
Appendices..............................................................................................................245
References...............................................................................................................288
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List of Illustrations
Figure 1.1 Three flows operating in a supply chain.......................................................5
Figure 1.2 Sri Lanka Province MAP.............................................................................6
Figure 1.3 Labour Cost Comparisons in the Textile Industry, 2000...............................9
Figure 1.4 Sri Lanka’s Mobile Market........................................................................12
Figure 1.5 Telephone Density in Sri Lanka.................................................................12
Figure 1.6 Submarine cable.........................................................................................13
Figure 2.1 Supply chain network structure..................................................................25
Figure 2.2 Scope of Logistics Management.................................................................36
Figure 2.3 Logistics Management...............................................................................38
Figure 2.4 Evolution of SCM electronic communication practices..............................70
Figure 2.5 Research areas and path.............................................................................77
Figure 2.6 Cross-structural communications................................................................87
Figure 2.7 Research Process........................................................................................92
Figure 3.1 Research variables......................................................................................98
Figure 3.2 Research Strategy Matrix: a Comparison of alternatives...........................107
Figure 4.1 Revising TAC..........................................................................................130
Figure 4.2 Three category combinations....................................................................132
Figure 4.3 Link between the combinations................................................................139
Figure 5.1 EB capacity utilisation by the five companies...........................................173
Figure 7.1 EB spectrum............................................................................................203
Figure 8.1 ‘Snap Shot’ - Arial view of the formation of aspects involved with
understanding the impact of e-Business on B2B segment of the supply chain……… 226
Figure 8.2 Study of categories...................................................................................234
Figure 8.3 ‘Snap Shot’ Vertical 3D view of the formation of aspects involved with
understanding the impact of e-Business on the B2B segment of the supply chain......238
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List of Tables
Table 1.1 Sri Lankan’s economy.................................................................................10
Table 1.2 Performance of Port Services.......................................................................14
Table 2.1 Literature review Sections...........................................................................17
Table 2.2 Three main flows of supply chain management...........................................21
Table 2.3 The management components of SCM........................................................26
Table 2.4 Concept of SCM subdivided in to three topics.............................................30
Table 2.5 Components of Supply Chain Management.................................................35
Table 2.6 Four stages of operations management contribution.....................................47
Table 2.7 Operations contribution to business strategy................................................49
Table 2.8 Operations management performance objectives.........................................49
Table 2.9 Examples of performance measures.............................................................50
Table 2.10 Manufacturing strategies in the apparel industry…………………………. 53
Table 2.11 Three alternative definitions of the relationship between EB and EC.........59
Table 2.12 Components of e-commerce with sample economic activities....................60
Table 2.13 Impact of E-Business on Supply Chain Performance.................................67
Table 2.14 Traditional EDI vs. Internet commerce......................................................72
Table 2.15 A comparison between EDI and the Internet..............................................72
Table 3.1 Research questions......................................................................................98
Table 3.2 Relevant Situations for Different Research Strategies................................101
Table 3.3 The research process Options....................................................................105
Table 3.4 Comparison of adopted approach to grounded theory ………………….....106
Table 3.5 Research in other quadrants.......................................................................108
Table 3.6 Questions of reliability, validity and generalisability.................................113
Table 4.1 Framework before data analysis.................................................................134
Table 4.2 Framework after data analysis...................................................................135
Table 4.3 Identifying emerging patterns during data analysis....................................137
Table 4.4 Answering the research questions..............................................................141
Table 5.1 Comparing current ICT with previous ICT................................................147
Table 5.2 Comparing current ICT with previous ICT................................................169
Table 5.3 Barriers to implement ICT.........................................................................172
Table 7.1 ICT evaluation criteria...............................................................................212
Table 8.1 Research questions according to category combinations............................224
Table 8.2 TAC framework with abbreviations...........................................................225
Table 8.3 Impact of e-Business on SCM from an apparel manufacturer’s perspective227
Table 8.4 Contribution from TAC framework main findings……………………......241
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List of Appendix
Appendix A the supply chain management process...................................................246
Appendix B Summarised SWOT Analysis of the Apparel Industry...........................247
Appendix C Export performance -............................................................................248
Appendix D SC definitions analysed according to entities, activities and purpose.....250
Appendix E Analysing SCM definitions analysed.....................................................251
Appendix F Purchasing versus Supply Chain Management.......................................252
Appendix G A definition of Supply Chain................................................................253
Appendix H A definition of Supply Chain Management...........................................254
Appendix I Measuring criterion of BSR....................................................................255
Appendix J Previous research on buyer-supplier relations.........................................257
Appendix K Management Styles...............................................................................258
Appendix L Analysing e-commerce (EC) and e-business (EB)..................................260
Appendix M A definition of E-Business....................................................................262
Appendix N Table 19 Views of Poirier and Bauer (2001)..........................................263
Appendix O Comparing the performance of communication methods (in SCM).......264
Appendix P previous research on electronic communications and its limitations.......265
Appendix Q. Push and Pull supply chain...................................................................266
Appendix R Lean retailing apparel supplier relations................................................267
Appendix S Swaminathan et al (1995) model details.................................................269
Appendix T the research process in this study...........................................................270
Appendix U Role of the facilitator............................................................................271
Appendix V Details of core respondents...................................................................272
Appendix W Details of Expert Respondents..............................................................273
Appendix X Participant request letter........................................................................274
Appendix Y Role of the facilitator............................................................................275
Appendix Z Data Matrix...........................................................................................276
Appendix Z1 Company D Merchandising manager interview transcript analysed
according to attributes from the TAC framework......................................................278
Appendix Z2 Company A, Production cycle according to operations manager..........287