Achieving information integration in supply chain management through B2B e-hubs: concepts and analyses

While supply chain integration is measured at three levels: information, resources and organization, the emphasis of the paper is placed on how information integration can be achieved through B2B e-hubs. After reviewing the concept of supply chain integration and the evolution of e-hubs, we examine two groups of e-hubs classified by supply chain processes, namely procurement and transportation, along with two case studies of each. A value-gap analysis is performed from the perspectives of facilitating supply chain activities and connecting chain partners, revealing that gaps and limitations do exist in existing e-hubs. Finally, we present a framework for integrating existing e-hubs into other advanced information technologies, such as ERP and CRM, to bridge the gaps and to expand their functionality to provide better solutions to supply chain integration. perspectives to identify the limitations of e-hubs. The findings will lead to an integrated model of e-hubs and supply chain management, which provides an efficient information integration framework. Concluding remarks are given in Section 5. 2. Literature review 2.1 Supply chain integration: a functional perspective The term supply chain management (SCM) first emerged in the literature in 1982 and has gained prominence in the past ten years (Cooper et al., 1997). Although its widespread popularity leads to numerous kinds of definitions by different industries and academics, there seems to be a convergence towards the central theme of SCM. The theme suggests that SCM is an integrative philosophy of managing flows of material, information, and finance from the earliest supplier of raw materials to the ultimate customer. Specifically, SCM is a process-oriented, integrated approach to procuring, producing, and delivering products and services to customers and has a broad scope that includes sub-suppliers, suppliers, internal operations, trade customers, retail customers, and end users (Metz, 1998). As described by Metz (1998), SCM evolves from its origin to current status through a four-phase development process, which is depicted in Figure 1. Figure 1 indicates that the supply chain develops by progressively integrating a number of functions (in bold) into the total process and that this steady advance is propelled and driven by the rapid development of information technology (IT). IT makes it possible to enable more information to travel more accurately and more frequently along the chains and to synchronize the activities of the chains. As a result, the trading partners can efficiently coordinate their business decisions and activities, thereby becoming integrated. Numerous success stories imply that a tightly integrated supply chain can lead to superior chain performance and improved competitiveness for each of the involved channels. Accordingly, many executives of innovative companies have adopted SCM as a top priority in their strategy. As discussed before, the core of SCM is integration. Lee (2000) points out that supply chain integration constitutes the following three dimensions: information integration, coordination, and organizational linkage, which are described in Table I. It is easily seen that information sharing is the foundation of supply chain integration. Therefore, an important question arises: how information integration can be achieved in supply chain management? This is one of the questions we attempt to answer in this paper. 2.2 The evolution of B2B e-hubs E-hubs are defined as neutral Internet-based intermediaries that focus on specific industry verticals or specific business processes, host electronic marketplaces, and use various market-making mechanisms to mediate anyto-any transactions among businesses. These hubs create value by aggregating buyers and sellers, creating marketplace liquidity, and reducing transaction costs (Kaplan and Figure 1 Evolution of supply chain: a functional perspective [ 658] Amy Z. Zeng and Bhavik K. Pathak Achieving information integration in supply chain management through B2B e-hubs: concepts and analyses Industrial Management & Data Systems 103/9 [2003] 657-665