ICT and e-Business Impact in the Furniture Industry - empirica

ICT and e-business impact in the furniture industryThe importance of supply chain integrationIntegration along the supply chain is a key issue among furniture companies in order tospeed up and achieve instant visibility into orders, shipments, and inventory across thesupply chain, as well as improving the tracking of processes from design tomanufacturing. Reducing lead times is crucial to improving competitiveness of the EUindustry as not only this would enhance reputation but would be a service that manyextra-EU manufacturers would find difficult to match.While supply chain processes are increasingly complex and involve a diversity ofpartners, manufacturers need to address these issues without the need to use expensivesolutions or release sensitive information in external databases whenever activities areoutsourced. As SCM systems are used to manage numerous and different tasks, thisrequires inputs from various applications, and to share data with external partners’information systems. As a result, firms clearly need to address a broad range oforganisational and technical challenges when introducing SCM.Inter-enterprise integration, represented by SCM, is strongly related with and dependentupon the effective implementation of intra-enterprise integration (mainly represented byERP). They represent complementary approaches for addressing the same strategicchallenges. SCM, however, provides the opportunity to expand the advantages ofoptimisation and integration to the entire supply chain through the creation of acollaborative, networked environment.Desk research for this study indicates that the full digital integration of data exchange withcustomers and suppliers is still limited to larger firms. The CATI Manufacturing Survey2007 illustrates to which degree these systems are actually diffused in this industry,which are the main barriers to adoption – especially for smaller players – and which arethe recorded impacts.There are indications that the limited degree of computerisation and related knowhow,cultural differences, and the diversity of technological equipment are stillrelevant barriers to integration.In contrast with the relatively low penetration of "internal management" ICT-enabled toolssuch as ERP, SCM and DMS, European furniture companies appear to be quite active onthe Web side: Exhibit 3.3-4 highlights how 64% of furniture manufacturers use theInternet or other computer-mediated systems to order goods and services, a percentagerising to 76% in the case of large companies but quite high (50%) also for SMEs. Itshould be noted, though, that the survey question did not specify whether e-mailexchange was to be included – and probably many of these exchanges are simply"conventional orders" transmitted via e-mail, mainly in SMEs.59