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

ICT and e-business impact in the furniture industryall the business requirements. On top of this,are the demands by customers for reduceddelivery times.The EU furniture industry has made largeinvestments in production and modernmanufacturing techniques. Insights fromliterature and interviews for this report indicatethat flexibility of operations and manufacturingprocess efficiency has been achieved not somuch from investment in high-tech robotics andintegrated automation, but more relying onskilled workforce and general purposemanufacturing equipment. The furnitureindustry handcrafting background emerges inthe model of ICT and e-business adoption inthis sector: mainly system automation forproduction, but little business management orsystem integration in the company or withbusiness partners.In order to sustain competitiveness at aninternational level, however, the Europeanindustry needs to further advance in efficiencyand integration of business processes, such asprocurement, production planning,warehousing, inventory control. The realisationof extensive cost reductions and time savings,by integrating all aspects of the supply chain,can be supported by the implementation ofproper ICT and e-business solutions, such asSCM. This process is strictly dependant uponthe effective implementation of internalbusiness processes management systems,such as ERP. However, adoption and usage ofSCM and ERP are still limited to larger firmswhile smaller players face relevant constraintsand barriers, such as cost and complexity oftechnologies. It also appears from the analysisthat the identification of priority areas forfocused investments is possibly the suggestedpath for companies embracing e-business.e-Marketing and salesA main feature of the furniture industry is thenumber and diversity of business players alongthe value chain, including handicraft companiesand professionals. The diversity of ICT systemsin place and of competences is a major hurdleto integration.In particular, e-business integration is stilllacking between manufacturers and independentdistributors, due to the characteristics offurniture distribution networks and the complexityof industrial categorisation and coding.e-Marketing and e-sales activities towards finalcustomers are still limited in this sector, and areaimed at providing technical and commercialinformation rather than actual e-commercefunctions.Furniture manufacturers and retailers maybenefit from improved interoperability andstandardisation both for integration of businessprocesses and for the development of B2B andB2C commerce activities. The report highlightsinteresting examples of web-based e-communication and e-cataloguing initiativessupporting selling activities.Case studies and the CATI ManufacturingSurvey 2007 confirm Web catalogues as themost used web-based application. Webcatalogues are seen as a kind of customerservice and are hardly ever integrated withordering and production/distribution systems.ICT as an enabler of processinnovationIt was a consistent finding in e-Business Watchsector studies that ICT play a crucial role inparticular to support process innovation, inmanufacturing as well as in service industries.This can be confirmed for the furniture sector:enterprises representing about 47% of sectoremployment said that they had launched new(or improved) products in 2006/07. About 44%of those said that their product innovations hadbeen directly related to or enabled by ICT. ICTplay a crucial role to support process innovationacross all size classes.Impacts of ICT adoptionAn econometric analysis was conducted, basedon the e-Business Survey 2007 for the furnitureindustry. It allows identifying ICT impacts onselected business dimensions in the furnitureindustry. It stems from the survey data that ICTdriveninnovation process in this industry islinked to the share of employees with universitydegree and of ICT practitioners and is favouredby the existence of long-standing andelectronically-organised relations with businesspartners. Conversely, the overall impact of ICTon the furniture industry structure is limited.7