Mobile supply chain management: Challenges for implementation

Teck-Yong Eng*

King’s College London, University of London, School of Social Science & Public Policy, Management Department, 150 Stamford Street, London SE1 9NH, UK

Abstract

Mobile supply chain management (mSCM) is fast gaining recognition as a major source of cost reduction and supply chain performance.

However, there is little published academic literature on the application and implementation of mobile and/or wireless technology in SCM.

This article attempts to explore the challenges of mobile technology for successful implementation of mSCM. The implications of mobile or

wireless technology for successful implementation of mSCM are examined with reference to three critical areas of SCM: (1) competitive

advantage based on the notion of value chain analysis in SCM; (2) relationship management for successful collaboration along the supply

chain and strategic partnerships; and (3) coordination and integration of disparate functions and activities to enhance overall supply chain

performance. The article identifies the implications of mobile technology for SCM and develops propositions that have important

consequences on the likelihood of a successful implementation of mSCM.

q 2005 Elsevier Ltd. All rights reserved.

Keywords: Mobile SCM; Wireless technology; Implementation; Coordination; Integration

1. Introduction

A supply chain consists of networks of participants and

channels of different functions from inside as well as outside

an organization that affect the desired outcomes of the supply

chain. Supply chain management (SCM) involves coordinat-

ing and integrating activities and processes among different

business functions for the benefit of the entire supply chain.

The integration of multiple functions and enterprises

particularly in a global supply chain context is complex.

Information technology (IT) systems have long been

recognized to facilitate the process of SCM through integrated

information sharing, process automation, and relationship

management programs. The increasing use of the Internet in a

business-to-business context has further improved SCM

through real time collaboration, 24/7 availability, online

procurement, and access to worldwide markets (e.g. Lancioni

et al., 2003). Furthermore, improvements in IT, Internet

security and bandwidth have spurred the growth of wireless

technology or mobile applications for SCM in industries. A

wireless computing environment is presenting both opportu-

nities and challenges for creating mobile SCM.

0166-4972/$ - see front matter q 2005 Elsevier Ltd. All rights reserved.

doi:10.1016/j.technovation.2005.07.003

* Tel./fax: C44 207 848 4211.

E-mail address: teck.eng@kcl.ac.uk.

Mobile SCM (mSCM) refers to the use of mobile

applications and devices to aid the conduct of supply chain

activities, and ultimately help firms to gain cost reductions,

supply chain responsiveness and competitive advantage.

Mobile SCM is relatively new, and it complements, combines

and/or replaces existing IT systems. It can be developed by

integrating mobile technology to existing IT systems and/or

replacing dependence on wired systems. This provides firms

and users the flexibility to apply wireless technology to any

IT-enabled supply chain functions, and extends existing SCM

capabilities. The most obvious advantage of using wireless or

mobile technology in SCM is that it enables firms to provide

services to customers wherever they are located at the time

they need them. This is known as location-based services

(LBS), where wireless technology and infrastructure, namely

Global Positioning System (GPS) and Geographical Infor-

mation System (GIS) are combined to locate and target

customers in specific locations. In addition, mobile SCM

applications can be used to streamline business processes of

different business functions to ensure efficient flow and

exchange of supply chain activities from the inception of a

product, design, production, sales, customer service to the

end of its useful life.

However, there is scant literature on mSCM particularly

about the challenges of the characteristics of wireless

technology for implementation. Academic research on

mSCM is lagging behind industry practice and wireless

Technovation 26 (2006) 682–686

www.elsevier.com/locate/technovation

T.-Y. Eng / Technovation 26 (2006) 682–686 683

technology developments. Despite the potential of wireless

technology combined with both existing IT systems and the

Internet in changing the way firms conduct their business, no

theoretical and empirical work has yet examined the

application and implementation of mSCM. An under-

standing of the challenges of application and implementation

of mSCM is crucial as mobile technology provides real time

and on-demand response. For example, without knowledge

of application and implementation ofmSCM,mistakes could

be very costly as real time decision-making is irreversible

and affect multiple functions through ‘knock-on’ supply

chain effects, and cause customer dissatisfaction. Thus, it is

worth to develop an understanding of the characteristics of

mobile technology for SCM, and to explore the challenges

for successful mSCM implementation.

This article attempts to provide some insights into the

nature of mSCM and their implications for successful

implementation. Consistent with SCM literature, the primary

focus is on analyzing the implications of the characteristics of

wireless technology for three critical aspects of SCM:

competitive advantage, relationship management, and

coordination and integration of supply chain functions.

This article aims to lay some of the groundwork for

understanding the contribution of wireless technology to

these critical aspects of SCM rather than develop a fully

specified framework for mSCM implementation challenges.

The objectives of the article are to: (1) examine the

characteristics of wireless technology and their implications

for SCM; (2) conceptualize research and practical challenges

as regards successful implementation of mSCM; and (3)

develop propositions that have important consequences on

the likelihoods of successful implementation of mSCM.

Specifically, the characteristics of wireless technology

related to real time events, ubiquity and personalization are

examined in terms of the implementation challenges for

developing competitive advantage through value chain

analysis, managing collaboration in supply chain relation-

ships and partnerships, and for enhancing SCM performance

through coordination and integration. The likelihoods for

successful implementation of mSCM are discussed by

developing propositions framed in key concepts related to

the characteristics of wireless technology.

2. Mobile supply chain application

Mobile SCM integrates software applications with

mobile devices (e.g. cell phones, personal digital assistants,

pocket personal computers) to give users the flexibility to

operate in a wireless computing environment at any

location. Mobile devices are connected to a company’s

computer server via wireless technology infrastructure such

as via GPS, GIS and wireless fidelity (Wi-Fi) which enables

users to share data across functions and along the supply

chain without the need for fixed wires and/or connections

for exchange of information. For example, radio frequency

identification (RFID) and short message service (SMS)

software applications combined with tags and cell phones

respectively provide wireless or mobile access to a

company’s database. This enables users to take advantage

of information systems linking business processes among

different functions within the company and between

companies at remote locations. As such, mobile supply

chain software application extends both intrabusiness and

interfirm business systems by enabling supply chain

participants to carry out business activities such as perform

online transactions, share and exchange up-to-date infor-

mation, provide customer service on demand, manage

logistics, transportation and inventory levels.

However, mobile supply chain applications introduce new

challenges particularly for implementation. Mobile technol-

ogy extends SCM capabilities through new virtual and

remote ways of conducting supply chain activities. While

software companies claim that mSCM delivers an increased

in return-on-investment, productivity, sales turnover and

customer satisfaction, no published academic literature has

yet examined the implications for successful implementation

of mobile technology in SCM. Some industry analysts also

note that many companies are struggling to implement

mobile software application to their business and end users.

Mobile technology and software implementation challenges

the current coordination of different functions and activities

for SCM in terms of providing supply chain services on

demand at any location. Of particular concerns are the

implementation challenges of leveraging wireless technology

for developing competitive advantage, relationship manage-

ment, and for improving coordination and integration of

disparate supply chain activities. It is therefore important to

understand the characteristics of wireless technology

application and their challenges for the likelihoods of

successful implementation of mSCM.

3. Characteristics of wireless technology and challenges

for mSCM

Mobile technology application together with the Internet

are changing the landscape of business and introducing new

concepts for SCM. The main concerns of mobile technology

in the context of SCM are: place for efficient distribution of

goods and services, timing for meeting customer demand and

managing logistics, and service quality for responsiveness

and customer satisfaction. These are examined and discussed

in terms of real-time events, ubiquity and personalization as

an extension of wired technology to mSCM.

Real time events in the supply chain refer to live or

instantaneous broadcasts of occurrence using wireless

technology and mobile devices. There is no waiting time,

and transactions carried out along the supply chain are

efficient. The benefits of real time communications have

been recognized in wired systems through electronic data

interchange and enterprise resource planning within an

T.-Y. Eng / Technovation 26 (2006) 682–686684

organization (e.g. Eng, 2004). In mSCM, integration of real

time events using wireless technology provides a constant

flow of up-to-date information from both inside and outside

the organization. Since SCM is concerned with information

exchange and market response, real time events enhance

supply chain performance. Real time information eliminates

response lag time, delays in transaction processing and

customer service, and missed market opportunities such as

order-to-demand. It also helps companies to cope with

changes of uncontrollable external factors affecting demand

(e.g. prices, customers’ general confidence) through

measurement of demand in real time. In particular, prices

of products and services can be changed using real time

events (dynamic pricing) rather than being based on rules of

thumb.

Real time events also pose many challenges to SCM in

terms of managing functions along the supply chain for

successful implementation of wireless technology. In a

fast changing business environment, wireless technology

presents conventional supply chains new challenges of:

(1) transient value creation points of a value chain that have

implications for competitive advantage. In other words, there

is constant adaptation of critical points in real time for value

creation of value chain analysis. (2) A dynamic supply chain,

where interactions can occur at any point along the supply

chain. This demands real time integration of combining

numerous business processes with little margin for errors. (3)

Transparent activities and processes that cannot rely on

organizational structures and hierarchies to absorb uncer-

tainties and environmental shocks. This questions the

sources of competitive advantage based on inefficient

markets, which lack both real time data and flexibility to

respond to changes regardless of physical locations.

Ubiquity. In the context of mSCM, ubiquity means that

supply chain activities and goods can be provided everywhere

regardless of time and location. Mobile supply chain

applications allow users to request information and conduct

whatever they want, whenever they want and how they want.

Ubiquitous existence is mainly supported by the Internet,

where a company’s website is available 24/7, and accessible

from any location around the world (e.g. using cell phones

with satellite connection). Wireless technology further

enhances the notion of ubiquity by enabling users to be

connected to each other, to a computer server and database,

and to the Internet regardless of geographical location.Mobile

SCM is endowed with both the benefits of using the Internet

for SCM (e.g. e-marketplaces), and functioning in virtual

space wherever and whenever needed. Thus, disparate global

supply chain functions can benefit from the increased

visibility and ubiquity of business processes to help reduce

uncertainties of demand forecasting and planning.

A ubiquitous supply chain based on wireless technology is

changing conventional understanding of SCM in at least three

important ways. First, mSCM is offering geographical reach

on an unparalleled scale by deconstructing the process of

SCM and logistics. For example, supply chain services

(product information in transit) can be requested at any

location without reaching a certain stage of logistics. Also,

location-based services automatically match services accord-

ing to customer profile in specific locations without relying on

initiation of demand from the customer. Second, ubiquity is

changing the collective nature of SCM by dispersing and

unbundling supply chain functions and activities in a virtual

environment without fixed coordination and integration

points. Mobile SCM creates the need to manage dispersed

resources in order to coordinate and integrate them for the

benefit of the entire supply chain. Third, ubiquity is

challenging reliance on structural coordinating mechanisms

(e.g. organizational designs and hierarchies), when supply

chain activities can take place anywhere and whenever

needed in real time. These highlight the importance of change

management for the implementation of mSCM in adapting

and changing existing business systems particularly

functional roles of conventional SCM.

Personalization can be described as an act of customizing

and targeting specific supply chain information based on

individual needs and circumstances. In mSCM, wireless

technology coupled with software applications (e.g. elec-

tronic customer relationship management) can be used to

deliver personalized services to users in the supply chain and

to customers. The concept of personalization has been applied

in electronic customer relationship marketing (e.g. Ryals and

Payne, 2001). Themain purpose is to develop long lasting and

profitable customer relationships. Some notable benefits of

personalization in SCM include effective use of resources

such as filtering information to relevant users, personalizing

services to increase customer satisfaction, automating sales

force in the field, and exploiting opportunity to cross-sell

related services based on customer purchase history.Wireless

technology extends the benefits of personalization by not only

offering instant services and user interfaces but also enabling

execution of multiple tasks at remote locations.

Personalization using mobile supply chain applications is

creating new types of challenges for SCM by enabling a

closer integration between operations and marketing

activities than efforts based on ad hoc cross-functional

teams in the supply chain. Managers or sales people in the

field connected to their companies’ database and supply

chain systems by mobile devices are confronted with the

autonomy to make personalized decisions and/or carry out

supply chain activities on the spot (on demand). While such

autonomy provides flexibility and empowers staff members,

personalization in a wireless environment demands new

ways of looking at control and accountability. For example,

personalized services provided by an individual function

may be disintermediated or reintermediated with other

functions along the supply chain depending on operational

and/or customer needs. This has implications for the

interplay of power and dependence among relationships

in the supply chain. Therefore, personalization in mSCM

changes the dynamics of relationship management in

T.-Y. Eng / Technovation 26 (2006) 682–686 685

terms of content and relational aspects such as trust and

commitment.

4. Successful implementation likelihoods of mSCM

The above characteristics of wireless technology and

their challenges for SCM have implications for the

likelihood of successful implementation of mSCM, particu-

larly for competitive advantage, relationship management,

and coordination and integration. In other words, mobile

supply chain relationships and activities across functions

need to be managed, coordinated and integrated for the

development of competitive advantage.

4.1. Competitive advantage

The competitive advantage of a supply chain can be

examined in terms of responsiveness, cost reductions, speed

to market (lead times), profitability, and performance of

supply chain functions (e.g. distribution, inventory, trans-

portation). As indicated in the preceding sections, mobile

supply chain applications are creating new sources of

competitive advantage as well as challenges for SCM. An

important implication of mSCM for implementation is the

shift of critical points of a value chain analysis for value

creation. This makes it difficult for firms to identify, create

and manage the sources of value creation along the supply

chain. Real time events have two implications for

competitive advantage: (1) creation of real time capabilities

based on specific interactions and/or combinations of

business processes, and (2) socialization among supply

chain participants to acquire dispersed knowledge of

collective supply chain activities. Therefore, the task of

developing competitive advantage based on mSCM is likely

to be influenced by knowledge of activities and processes in

the supply chain through both interaction (Nonaka and

Takeuchi, 1995) and socialization (Van Maanen and Schein,

1979), which have a real time effect on capabilities.

The development of competitive advantage based on real

time and dynamic capabilities is better suited to a process

approach to supply chain analysis than to structural analysis

of supply chain advantages. The process approach based on

a detailed analysis of activities, steps and channels is likely

to capture the sources of value creation in mSCM. The

visibility of transparent processes in a wireless environment

also necessitates an understanding of how supply chain

processes operate together to produce final outputs in an

efficient market (real time business exchange). For example,

the technique of successive decomposition can be used to

diagnose workflow and virtual systems in order to identify

and create value in the supply chain. Successive decompo-

sition requires the firm’s interaction with supply chain

participants in the process of dividing and subdividing

components of the supply chain in order to understand its

interaction with individual and different processes that

contribute to competitive advantage. This provides knowl-

edge for the integration and implementation of wireless

technology in dispersed context-specific real time capabili-

ties for mSCM. In general:

Proposition 1. The likelihood of successful implementation

of mSCM may be enhanced where the firm adopts a process

approach to interacting with its supply chain participants

due to an increase in knowledge through socialization.

4.2. Relationship management

The numerous types of relationships inside and outside an

organization’s supply chain have to be managed as each

relationship affects, brings, and contributes to the supply

chain differently. Mobile SCM can deconstruct and extend

the supply chain through flexible interfaces between users

and processes at different channels along the supply chain,

and/or through high reach and connectivity of wireless

technology. For example, customer and market information

from marketing research can be shared in real time

throughout the supply chain to help forecast inventory levels

and avoid the bullwhip effect. It is crucial that firms manage

disparate supply chain activities created when and where

needed using wireless technology for successful implemen-

tation of mSCM. In particular, trust and closeness in

relationships may be fickle as the benefits of transacting on

the Internet are transparent as they occur in real time. Also,

some business relationships may be set up to take advantage

of short-term opportunity, or need to be managed carefully

as companies compete and collaborate in the same industry.

The content of individual relationships in the supply

chain provides a source of resources (e.g. information,

knowledge, technology) that needs be examined, selected

and managed to fulfil both short and long-term supply chain

goals. As companies apply mSCM and relate to partners,

they adapt their physical systems architecture to comp-

lement and maximize the benefits of interaction along the

supply chain. Learning occurs in the interaction to explore

the content of different relationships, which involves

investment in scarce organizational resources particularly

investment in physical architecture. It is important to

examine the roles of different supply chain relationships

to distinguish between transaction based and strategic

benefits (Eng, 2004) that can derive from resource

investment in the implementation of mSCM. Scarce

organizational resources necessitate relationship selection

in the process of interaction and socialization, where

cooperative behavior and sharing between firms are critical

for the development of trust. For example, a high visibility

and transparency of processes in mSCM also exhibits the

presence of a high trust relationship with certain partners in

the supply chain. Successful implementation of mSCM

depends on interfirm investment in wireless systems and

therefore, commitment in the form of sharing and

investment in relationships affect mSCM. This leads to:

T.-Y. Eng / Technovation 26 (2006) 682–686686

Proposition 2. The likelihood of successful implementation

of mSCM will be enhanced the more companies share

resources with members in the supply chain due to an

increase in trust and commitment.

4.3. Coordination and Integration

The importance of coordination and integration of

different functions for supply chain performance has been

widely documented in literature (e.g. Morash and Clinton,

1998; Johnson, 1999; Stank et al., 2001). In mSCM,

wireless technology not only facilitates coordination and

integration across functions and firms, but also challenges

conventional mechanisms of structures and hierarchies in

an organization through simultaneous and real time

coordination of multiple tasks. The collective inputs of a

supply chain are further dispersed in an organization and

between supply chain partners in mobile supply chain

applications. For example, supply chain activities of

mSCM can be conducted by different members located

beyond the traditional boundary of a wired physical

connection. Whilst mSCM creates new opportunities, the

dispersion of supply chain activities without fixed points of

integration and coordination presents new challenges for

implementation.

Successful implementation of mSCM requires knowl-

edge embedded in systems of interactions in the supply

chain. Mobile access to a computer server allows users to

carry out the tasks of coordination and integration with

possible elimination of response lag time. For example, a

dynamic alteration of supplies to match market demands

(e.g. prices and stock levels) can lower transaction costs

and lead times. Although mSCM increases flexibility and

responsiveness through real time transmission of infor-

mation in the supply chain, the success of implementation of

mSCM is likely to derive from knowledge of the supply

chain across different activities and functions. For example,

customer order processes can be completed remotely using

wireless technology and knowledge of such processes

cannot be achieved by concentrating on an individual

function. The influence of cross-functional coordination and

cross-functional teams on performance has also been

examined in the SCM literature. The main implications

for successful implementation of mSCM are: embedded

knowledge of systems for the coordination and integration

of real time processes, and application of such knowledge

across different functions in the supply chain. This suggests

that:

Proposition 3. The likelihood of successful implementation

of mSCM will be enhanced where supply chain participants

possess cross-functional knowledge of disparate supply

chain functions and activities, because higher coordination

and integration success in mSCM depends on embedded

knowledge of systems.

5. Conclusion

The article explores the characteristics of wireless

technology and their challenges for mSCM. The impli-

cations of wireless technology for SCM are examined

against three critical areas of SCM: competitive advantage,

customer relationship management, and coordination and

integration. The challenges for successful implementation

are discussed in terms of mobile technology concepts of real

time events, ubiquity and personalization. The article

develops three propositions concerning the challenges of

wireless technology for the likelihoods of successful

implementation of mSCM particularly some key impedi-

ments or issues to consider if mSCM is desired. They should

help SCM scholars to develop research framework for

investigating the implementation of mobile supply chain

applications or further conceptual development of mSCM.

Importantly, this article has attempted to lay some

foundations of what issues scholars and supply chain

managers should consider for successful implementation

of wireless technology in SCM.

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Teck-Yong Eng is a Senior Lecturer in

Marketing at The Management Depart-

ment, King’s College London, University

of London, UK. He gained a PhD in

Business-to-Business Marketing from The

University of Manchester, UK. His teach-

ing and research interests include indus-

trial marketing and supply chain

management. He has consulted for various

retail and food service firms and high-tech

firms on issues in supply chain

management.