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CONTEXT OF MALAYSIA
Abstract. Supply chain technology is being important for the company to manage the flow of
information between suppliers, and end customers. The use of information technology (IT) is
considered a prerequisite for the effective control of today’s complex supply chains. And it is
further justified with the trend of globalization as business spans beyond borders and the need to
manage it centrally. In spite of researchers explaining the importance of supply chain, the
investigation on the use of IT in the supply chain context is yet to be researched to prove it’s
significant, particularly in the Malaysian context. Based on empirical data from 200 companies,
this paper presents the determinants for companies to use IT in SCM. According to the findings
of this research, the use of IT for SCM purposes can be categories into four classifications which
are: - material forecast, transaction processing, supply chain planning and collaboration, and
order tracking and delivery coordination. The findings further suggest that the level of IT
adoption in these classifications is differing. It is expected that through this study, such
classifications could be researched as capabilities of supply chain technology that affect supply
chain performance the most.
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APIEMS 2008 Proceedings of the 9th Asia Pasific Industrial Engineering & Management Systems Conference
literature that SCM is important for material followed by the presentation of the findings
and information flows relating to the of the study. Finally, in the last two sections,
transformation of the materials into value the main findings are summarized and
added products, and the delivery of the discussed and the concluding remarks are
finished products through appropriate drawn.
channels to customers and markets so as to
maximize customer value and satisfaction. 2. Information Technology in Supply
Chain.
Many researchers have recognized IT in
supply chain as a new organization form, Increasingly competition is forcing
using terms such as Electronic Data organizations to be creative in their strategic
Interchange (EDI), Electronic Marketplace efforts as businesses are learning to improve
or Enterprise Resource Planning (ERP) and the way customers are served. Many
Materials Requirement Planning (MRP). A organizations, therefore, seek competitive
variety of technologies has been designed capabilities that would enable firms to
and implemented for different supply chain exceed customers’ perceptions, so that they
activities and strategic purposes. Some of can enhance market and financial
the most commonly implemented performance (Hayes & Pisaro, 1994).
technologies are used to support the Effective IT in supply chain allows rich
operations of planning, scheduling and information exchange, quick and reliable
distributing the materials. Regardless of data availability, and easy access to business
their intended function, it is generally partners (Mukhopadhyay et al, 1995).
believed that these technologies aid However, realizing the potential benefits of
significantly in decision making related to systems requires the capabilities by
the planning, assessment, and control of organizations (da Silveira et al, 2006).
supply chain activities (Bowersox et al, Choudary (1997) also emphasizes that
1989). In general, such technologies can be although IT in supply chain provide the
defined as "a group of enterprise or inter- communication benefits, they may differ in
organizational systems, each with their their capabilities to provide superior
capabilities, which collaborate in ever- integration and brokerage ability.
changing constellations to serve one or more
partners in order to achieve some business 3. Determinants of Supply Chain
goal specific to that collaboration" Technology
(Akkermans, 2001).
Below are the discussions on the four
Although the importance of IT for efficient application areas identified from the
SCM is widely acknowledged, empirical literature review for the adoption of IT in
research assessing the actual uses of IT in SCM.
SCM as well as the reasons for using IT in a
specific way still remain unclear. Due to Material Forecast
these identified limitations in the previous The first is on demand forecasts within a
literature we address the following research SCM is based on a constrained supply chain
problem: “What purposes do companies use model, in light of material and resource
IT in SCM?” The paper is structured as constraints (Mukhopadhyay et al., 1995).
follows. First, the previous literature For example, a computer implemented
discussing the use of IT in SCM is reviewed. method according to one embodiment of the
Second, the research design is presented, invention comprises: calculating a demand
Table 2
Reliability, mean and standard deviation of independent variables
Label of variable Cronbach’s alpha Mean Std. Deviation
Transaction processing .7168 3.62 .58
Supply chain planning and collaboration .9584 3.14 1.05
Material forecast .8444 3.58 .81
Order tracking and delivery coordination .9281 3.45 .89
Table 3
Correlation between Variables
Variables 1 2 3 4 5 6
Transaction processing .90
Supply chain planning and collaboration .72** .95
Order tracking and delivery coordination .56** .39** .89
Material forecast .42** .45** .39** .81
Resources sharing .60** .54** .52** .43** .78
IT in SCM .68** .68** .48** .52** .63** .91
** Correlation is significant at the 0.01 level (1-tailed).