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Richard Lancionia,*, Hope Jensen Schaub, Michael F. Smithc

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1. Introduction

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participants, and, ultimately, the demand for increased value by end users. As firms struggle to gain sustainable advantages in increasingly competitive and global environments, the focus of boardroom discussion is on strengthening supply chain relationships to create network efficiencies. Presently, it has become clear that an individual firm can no longer prosper in business, but rather, it is the entire network that moves raw materials through production and, ultimately, to end users, which are the nexus of marketplace success. In essence, new rules of competition dictate that single firms are no longer the generators of economic worth, but rather, it is the entire network of firms involved in the delivery of goods and services to end users that create market value. In response, a trend toward partnership sourcing has emerged, which is characterized by a long-term commitment to supply chain relationships and a cooperative, integrated approach to business processes [2]. The Internet as an enabling force for improved supply chain management offers efficiency and cost reduction to business processes across industries and nations. By allowing real-time communication among supply chain participants, networks can practice integrated forecasting, where it is possible to modify raw material orders to meet demand in real time, thus reducing the costs of stock outs or conversely costs associated with holding often perishable inventory. Similarly, interfirm information transfer via the Internet can reduce the costs of order tracking and logistics as shipments

Keywords: Internet; Supply chain management; Primary management tools

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The traditional way of managing supply chains has changed dramatically over the last 5 years. Face-to-face management, manual tracking systems, paper-dominated order processing systems, and wired communication links were the primary management tools available to logistics managers. Today, they are obsolete. The article provides an overview of some of the new tools and trends discussed in this issue, including website structure, e-purchasing, electronic marketplaces, building vendor relationships, and the use of the Internet in managing supply chains in China. D 2002 Elsevier Science Inc. All rights reserved.

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Department of Marketing, Fox School of Business, Temple University, Speakman Hall, Philadelphia, PA 19122, USA b Fox School of Business and Management, Temple University, Philadelphia, PA, USA c E-Business Program, Fox School of Business, Temple University, Philaddelphia, PA, USA

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Internet impacts on supply chain management

Dramatic economic and strategic changes brought about by recent advances in technology, including the Internet, the World Wide Web (WWW), broadband, and wireless technologies, have expanded the scope of commerce. Nowhere have these changes been more evident than in the industrial markets where the technologies have been applied to enterprise resource planning (ERP) and supply chain functions (procurement, inventory control, logistics), resulting in startling cost reductions, enhanced efficiencies, and remarkable increases in profit across industries [6]. In the last decade, supply chain management has moved from a low-profile, ancillary concern to a recognized strategic component with tangible, positive impact on the firms bottom line. Once relegated to the background of business activities, supply chain management is currently taking center stage in business planning [1]. Capturing the attention of senior managers, shareholders, and academics, supply chain management is, today, a respected management science with a strong and growing body of theory, testable models, and empirical research. At the heart of this shift in status are technologydriven changes in marketplace conditions, the evolution of business practices, new expectations among supply chain
* Corresponding author. Tel.: +1-215-204-8885; fax: +1-215-2046237. E-mail address: lancioni@aol.com (R. Lancioni).

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can be located en route and labor and physical plant requirements can be more accurately anticipated to achieve resource synergy [5]. While the Internet provides a low-cost network for business-to-business commerce transactions, the benefits of the Internet and electronic commerce go far beyond cost reduction [3]. Participants in the supply chain can use collaborative commerce to enhance value at all stages by allowing increased customization in materials and processes to meet the overall needs of the supply chain network, including end users. For example, in the plastics industry, it has been found that the Internet has given both downstream and upstream members of the supply chain the ability to offer technical support and alter raw material inputs and virtual specifications (websites) in real time to enhance the performance of network products and services. In essence, the Internet allows supply chains to decrease friction within their chains, improve output, and enhance overall satisfaction at every node of the network [4]. The rise of the Internet as a business resource, and, more importantly, the integration of technology at all levels of business practice, is the focus of this special issue of Industrial Marketing Management. Supply chain management has been literally reinvented by the new networked technologies and the practices they facilitate, i.e., e-procurement, e-logistics, collaborative commerce, real-time demand forecasting, inventory management, true just-in-time (JIT) production, customer interface, and web-based package tracking. This special issue examines the ways in which the application of the Internet has impacted business practices generally and provides specific examples of best practices. Supply chain managers face interesting challenges as they decide which ways to integrate the Internet into their operations to enhance value. The authors offer some normative advice on the integration of technology into supply chain relationships, some conceptual models of optimal utilization of technology, highlight some overlooked opportunities, and demonstrate some best practices in supply chain management. The remainder of this special issue is structured as follows: two empirical articles relating the strategic adoption of Internet technologies and types of website content to organizational characteristics, a conceptual paper applying a transaction cost perspective to electronic marketplaces, two articles (one empirical and one conceptual) highlighting the current strategic uses of Internet technologies in supply chain networks, an empirical paper profiling adopters and nonadopters of e-purchasing and demonstrating information intensity as a critical variable in Internet adoption, and a case study of e-logistics in the context of an emerging market, China.

3. Electronic Internet marketplaces Goldsby and Eckert, in their article Electronic Markeplaces: A Transaction Cost Perspective, investigate the value of electronic transportation marketplaces (ETMs) on supply chain networks, using a transaction cost perspective (TCP). The authors frame the decision to utilize ETMs as a make (maintain in-house control over transportation procurement) or buy (outsource the transportation procurement) decision and attempt to predict which scenarios are ripe for using ETMs and the most appropriate form of ETM to choose. Those firms that value supply chain relationships are suggested to avoid impersonal ETMs. The success of ETMs is shown to rest on proving that they not only lower administrative costs but also create efficiencies and ease for customers. Similarly, Skjott-Larsen et al., in Electronic Marketplaces and Supply Chain Relationships, present an evaluation of the experience firms have had with on-line exchanges in supply chain management and present new ideas on designing exchanges to fit the types of buyer supplier relationships.

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size, website content, and financial performance within the transportation industry. By performing a content analysis on the informational (general company information) and interactive (quote requests, order tracking, real-time supply chain data) content found on the Top 100 US motor carrier firms websites, the authors find that firm size is related to the firms utilization of interactive website content. In the transportation industry, large firms leverage interactive content to enhance customer value and gain strategic advantages over firms that do not deploy Internet technologies in their supply chain relationships. The authors show that in the context of the transportation industry, interactive website content fosters stronger supply chains, but that only the largest firms (the top 10) are able to devote the resources necessary to integrate the Internet into their supply chains, gaining substantial competitive advantages over smaller firms.

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4. Internet trends in supply chain systems Lancioni et al. surveyed 1000 US firms that were members of the Council of Logistics Management regarding their application of Internet technologies within their supply chains. They find that Internet adoption has increased from 1999 to 2001, moving away from indiscriminate use of Internet-related processes toward more focused, strategic applications and the development of precise and measurable goals. Their study, Strategic Internet Trends in Supply Chain Management, shows that beyond cost reductions, the use of the Internet within the supply network increases productivity and profits for participating firms. The Internet allows firms to customize service solutions for their cus-

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116 2. Transportation and financial performance 117 In the first article, Firm Size, Web Site Content, and 118 Financial Performance in the Transportation Industry, Ellin119 ger et al. explore the relationship between and among firm

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170 tomers, which enhances the overall value and competitive 171 position throughout the supply chain network.

172 5. Supply management and e-procurement 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192

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On an international level, Daly and Xiaolin, in their article E-Logistics in China: Basic Problems, Manageable Concerns and Intractable Solutions, demonstrate the particular e-logistics problems, concerns, and solutions in China. Through interviews with government, business, and academic leaders in China, the authors examine the regional context of China as a microcosm for global e-logistics, or case study of the tribulations and successes in one specific geographic locale. The authors have developed a typology of problems delineating three distinct types: basic, manageable, and intractable. Basic problems are defined as those that are low in scale and scope, minor, and can most often be solved through outsourcing. Manageable issues are those that are high on either scale or scope and require considerable, but not overwhelming resource investments. The intractable category are those problems that are high in scale (require significant investment) and scope (occur everywhere). Daly and Xiaolin find that positive movement in e-logistics occurs in each category, but the speed and investment vary substantially.

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193 6. International supply e-supply chains

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Like Lancioni et al., Presutti posits that the impact of Internet technologies will more than reduce costs, but rather decrease assets on hand and increase revenues. Presutti focuses on the creation of value within the supply chain utilizing e-procurement and supply management. Using the Economic Value Added (EVA) model, Presutti provides a conceptual framework or model for firms to use in strategic decisions regarding the deployment of Internet technologies within their supply chain. Assuming Internet technologies are integral to the firms strategic choices, Min and Galle profile adopters and nonadopters of e-purchasing in their paper E-Purchasing: Profiles of Adopters and Non-Adopters. The authors surveyed both adopters and nonadopters of Internet technologies to identify relevant contextual variables (organizational readiness, user characteristics, and information infrastructure) that influences firms adoption decisions. Broadly, this study reveals that firms in information intensive industries are more likely to adopt e-purchasing than firms in less information intensive industries.

8. Conclusions

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The Internet fosters the integration of business processes across the supply by facilitating the information flows that are necessary to coordinate business activities. However, the Internet also supports the use of market mechanisms, such as auctions, that foster price competition. Using market mechanisms is less likely to generate a sustainable competitive advantage, but they might offer the opportunity to purchase some items at a lower price.

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This special issue provides managers with ideas on how the Internet can be employed to improve the management of their supply chain systems. The authors look at all of the major components of supply chain management and demonstrate that the future holds tremendous opportunity for those firms that take advantage of all of its possibilities. References

214 7. Internet-enabled supply chains 215 Finally, Garcia-Dastuque and Lambert, in their article 216 Internet Enabled Supply Chains discuss how the Internet 217 can lead to more efficient supply management organizations.

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[1] Lancioni R. New developments in supply chain management for the new millennium. Ind Mark Manage 2000;29:1 6. [2] Roberts B, Mackay M. IT supporting supplier relationships: the role of electronic commerce. Eur J Purch Supply Manag 1998;4:175 84. [3] Deeter-Schmelz DR, Bizzari A, Graham R, Howdyshell C. Businessto-business online purchasing: suppliers impact on buyers adoption. J Supply Chain Manag 2001;37:4 10. [4] Boyle B, Alwitt LF. Internet use within the U.S. plastics industry. Ind Mark Manage 1999;28:327 41. [5] Briant J. Making sense of the E-supply chain. Mach Des 2000;72:62 70. [6] Soloner G, Spence AM. Creating and capturing value: perspectives and cases in electronic commerce. New York, NY: Wiley; 2002.

Richard A. Lancioni is Professor of Marketing and Logistics, and Chair, Marketing Department, Fox School of Business and Management, Temple University, Philadelphia, PA. He has authored more than 120 articles in the field of logistics and marketing and has conducted numerous seminars for many of the Fortune 500 companies including IBM, General Motors, Exxon-Mobil, Roche Pharmaceutical, DuPont, Coca Cola, and many others. He has lectured and given seminars around the world including Europe, Japan, Australia, and South America. He is recognized as one of the leading logisticians in the US. His research interests include customer service, pricing management, supply chain management, and marketing. He is a member of the American Marketing Association and the Council of Logistics Management. Hope Jensen Schau is currently an Assistant Professor of Marketing, Fox School of Business and Management, Temple University, Philadelphia, PA. She has authored several articles and proceeding papers in the fields of e-marketing, consumer behavior, advertising, and marketing. Professor Schaus research interests include Internet marketing, supply chain management, and marketing management. She is a member of the American Marketing Association and the Association for Consumer Research. Michael Smith is currently Associate Professor of Marketing and Director of the E-Business Program, Temple University, Philadelphia, PA. He has authored numerous articles in the fields of retailing, marketing, pricing, and channels of distribution. He has conducted numerous seminars for many of the leading US business firms. His research interests include channels management, retailing, supply chain management, and marketing management. He is a member of the American Marketing Association and the Council of Logistics Management.

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