Executive Briefings

Supply Chain Integration Drawbacks and Strengths

Project Noah is a 10-year research project set up to examine the benefits to companies of supply chain integration. These are its findings.

Project Noah has been conducted by the Department of Management and Marketing in the Faculty of Business and Economics at the University of Melbourne, funded jointly by the Australian Research Council and GS1 Australia, the Australian arm of the global body that administers the GS1 system of supply chain standards.

The study looked at the extent to which businesses implement supply chain integration or "inter-organizational systems" (IOS) using standards-based technologies and at how their use has changed over the 10-year study period. It found businesses that indicate higher levels of growth and business benefits both at the operational and financial levels implement IOS more extensively than their worse performing counterparts.

Inter-organizational systems are defined as "automated information systems shared by two or more companies, such as electronic data interchange and collaborative planning, forecasting and replenishment."

The study found that, despite the clear benefits of supply chain integration, its adoption was not widespread, and had even decreased in some companies. "Results show that businesses increase and decrease usage of the technologies over time, with increases being only marginal for the full sample," it said. Thus the study sought to answer the question "Why, if there is evidence supporting the benefits of IOS, do companies usually fail to implement it more extensively?"

Its conclusion was that adoption usually takes place in response to short-term pressures rather than being the outcome of strategic planning and long-term goal setting. "When it comes to IOS, it is not a simple case of "˜one size fits all'. Implementations of IOS often lack cohesion, strategy and forward thinking. Instead, managers focus on local, short-term business benefits for their own organization, rather than on strategic supply chain integration."

Read Full Article

Project Noah has been conducted by the Department of Management and Marketing in the Faculty of Business and Economics at the University of Melbourne, funded jointly by the Australian Research Council and GS1 Australia, the Australian arm of the global body that administers the GS1 system of supply chain standards.

The study looked at the extent to which businesses implement supply chain integration or "inter-organizational systems" (IOS) using standards-based technologies and at how their use has changed over the 10-year study period. It found businesses that indicate higher levels of growth and business benefits both at the operational and financial levels implement IOS more extensively than their worse performing counterparts.

Inter-organizational systems are defined as "automated information systems shared by two or more companies, such as electronic data interchange and collaborative planning, forecasting and replenishment."

The study found that, despite the clear benefits of supply chain integration, its adoption was not widespread, and had even decreased in some companies. "Results show that businesses increase and decrease usage of the technologies over time, with increases being only marginal for the full sample," it said. Thus the study sought to answer the question "Why, if there is evidence supporting the benefits of IOS, do companies usually fail to implement it more extensively?"

Its conclusion was that adoption usually takes place in response to short-term pressures rather than being the outcome of strategic planning and long-term goal setting. "When it comes to IOS, it is not a simple case of "˜one size fits all'. Implementations of IOS often lack cohesion, strategy and forward thinking. Instead, managers focus on local, short-term business benefits for their own organization, rather than on strategic supply chain integration."

Read Full Article