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Technology: Slave or Master?

By Francis J. Quinn, Editor -- Supply Chain Management Review, 3/1/2001

It's a question that's been percolating for some time now: Are supply chain professionals masters of the technology they employ or are they mastered by it? We all know what the answer should be. Yet as a number of the feature articles in this issue suggest, the answer we want is not always the one we get.

The problem has not been a lack of technology—quite the contrary. It seems as if new supply chain solutions are being introduced every week. Rather, it's that the promise of the technology often is not realized in the implementation, creating what Stephen M. Rutner and his co-authors call an information gap. Ever mindful of this gap, companies then are forced to operate in a less-than-optimum manner until the gap can be closed.

e-Procurement offers just one example of technology dictating strategy and operations—and not the other way around. Why are so many companies unhappy with the results of the e-procurement options they have selected? A big reason, say Larry R. Smeltzer and Joseph R. Carter in their article, is that they fail to properly align e-procurement initiatives with overall supply strategy.

The ideal of companies using e-procurement and other Web-based tools to master their supply chains might be something called a "digital loyalty network (DLN)." As Robert E. Sabath and Himanshu Kumar of Deloitte Consulting explain, DLNs are networks of a company's most valuable customers—all interconnected and serviced via the Internet in a manner that enhances loyalty.

The digital loyalty network is a concept of the future (though perhaps not all that far off). In the here and now are some happy examples of companies that are mastering the technology at their disposal to build customer loyalty. Hau Lee and Seungjin Whang report on two such examples in their exposition on demand chain excellence. The Stanford Business School authors profile Longs Drug Store and Seven-Eleven Japan, two highly successful yet very different retailers. These innovators are using technology to capture actual demand data in a way that has led to record levels of operating efficiency and profitability.

These two retailers have established a position as innovators who are aggressively using technology to achieve their corporate objectives. And as Larry Lapide of AMR Research points out in his Technology column, it is the innovators that already have a head start in the competitive race of the future. They are the technology masters.

New e-Supply Chain Section: This issue introduces the "e-Supply Chain." This new section of the magazine is an executive summary of developments in Web-enabled supply chain management.

Frank Quinn, 617-558-4468, fquinn@cahners.com

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