Recalibrating Demand-supply Chains for the Digital Economy

Firms are integrating segmented supply chains to improve global resource coordination and reduce buffers, such as lead times and inventory levels. Yet, supply chain integration, if inappropriately conceptualized, can have a detrimental impact on market responsiveness and value generation capability. Transformational innovations in Internet technologies, e-business models, such as consortia-sponsored e-markets, and industry process standards, such as RosettaNet, are challenging assumptions of value creation and appropriation. As a consequence, firms and supply chain sets need to reevaluate supply chain processes and enabling digital capabilities. Five supply chain configurations, i.e., integrated firm, fragmented chains, end-to-end integration, modular chains, and solution webs, are profiled. Assumptions and capabilities associated with each configuration are discussed. Key transformation issues in moving from one configuration to another are evaluated. Some directions for future research are offered.