Evaluation of supply chain management systems in automotive industry of north India

Abstract

The competition no longer exists between the companies, but it is between supply chains, this summarises the importance of supply chain in today’s global competitive environment. Companies are using information and communication technology in the supply chain to gain competitive advantage. Supply Chain Management Information System (SCMIS) has gained a lot of importance due to its ability to reduce costs and increase responsiveness in the supply chain. It provides high quality, relevant and timely information flow that effectively supports decision making. The implementation of SCMIS is a complicated process with significant risk since disparate systems spanning across companies are being integrated. There is a strong evidence in the literature that implementation of SCMIS projects were either not completed on time or didn’t bring about the planned effects and even exceeded their estimated costs. Against this backdrop, the research was undertaken in automotive sector covering two major OEMs: Maruti Suzuki India Ltd. and Honda cars India Ltd., their suppliers and distributors since the benefits from the SCMIS can only be realised if there is an effective implementation of the system. Therefore the primary purpose of the study was to identify and analyse both product and process dimension so as to provide a guideline which helps practitioners for the successful implementation of SCMIS. To fulfill the purpose questionnaires based survey method was used. The questionnaires were focused on the identification of critical and hindrance factors as well as product factors of the system. For evaluation of the product success dimension, six factors considered were: system quality, information quality, perceived importance of the system, user satisfaction, individual benefits and organizational benefits. Analysis shows system quality, information quality and perceived importance of the system as the antecedents of user satisfaction, further user satisfaction augments individual benefits measured in the form of improvement in job performance, productivity, saving time in doing a job, and helping in decision making which in turn lead to enhancement in organisational benefits. For evaluation of the process dimension the review focuses on the processes, which are followed in implementing SCMIS. The various critical success factors were reviewed and to prioritize the factors weighted mean was calculated and the factor of Project champion had the highest weighted mean of 4.14. Other factors among the top five included user involvement (mean 4.13 and SD 0.46); top management support (mean 4.12 and SD 0.348), pre-implementation analysis (mean 4.12 and SD 0.471) and change management (mean 4.10 SD 0.429). The regression analysis showed top management ix support, change Management, user involvement, effective communication, trust among the business partners; data accuracy, training and education had a positive impact on SCMIS implementation success. Next human barriers formed the major hindrance to the successful implementation of SCMIS. The human barriers included lack of users participation, resistance to change, lack of sufficient training to end users, lack of employees motivation, ineffective communication with the users and reluctance on the part of users to employ the system due to lack of understanding of the benefits that could be derived from the system. Among the human barriers, the most important was users’ resistance to change. Therefore the technical problems howsoever large they may be were not perceived as the main cause for unsuccessful implementation of SCMIS projects. Thus understanding these factors will enable managers to be more proactive and better prepared for future implementations. Being aware of the factors that can help or hinder the successful implementation of SCMIS may prove to be useful to practitioners as guidance enabling system success and avoiding IS failure. The study can help them gain an understanding of the complexities intrinsic in implementing these systems, improve decision making for successful implementation of the system right from inception and subsequent realization of the enormous benefits like reduction of inventories, minimization of bull whip effect, cost reduction, etc., that will accrue with right implementation.