Sysco Corporation’s E-Supply Chain

Executive Summary

There has been the evolution of Supply Chain Management, which is a tool of management that is employed to realize the optimization of the internal costs and productivities, as an application of e-commerce technologies. This tool of management is a powerful strategic function that is able to drastically improve the customer value plans by the engineering again of the collaborative channel partnerships that have been enabled by the internet as well as the intranet. The modern developments in IT have boosted the e-SCM (e-supply chain management) concept to fresh levels.

In the times that passed, there was not much change in either markets or products. For those companies who were market leaders and were to maintain market leadership, they had to take the initiative to leverage on, carry out an advertisement, adopt the newest technologies, and employ considerable resources and process knowledge.

In the current times, there is enough evidence that indicates that such a thing as sustainable competitive advantage does not exist and the indication that all the advantages are for a short while. The root cause of the highly increasing erosion of the competitive advantage in most of the businesses can be identified in the highly increasing development of new technologies. Still of great danger is the rapid growth of the business models that are newer which have challenged the current leaders with speed by leveraging on the competencies that are special which allow them to enter into the market with force and win the market segments that are targeted in a better way.

This paper looks at Sysco which is a company that is a global leader in carrying out the selling, marketing, and distribution of food products to healthcare facilities as well as educational facilities, restaurants, and lodging establishments among others. Its products as well encompass supplies and equipment for the hospitality industries and also the foodservice industries (Sysco Corporation, 2010).

The more developed technology has helped business organizations to reduce costs and improve efficiency, and among these business organizations is the Sysco Company. The company has provided the e-Sysco internet interface to connect suppliers to customers. This research paper sought to discover how Sysco benefits from e-Sysco.

It is after contacting several people from the organization that it has been established that the company is deriving several benefits from the electronic supply chain. The company has been able to bring down the level of its costs and increased the level of efficiency through adopting the electronic supply chain. This has been a very effective tool that has enabled this business organization to achieve a competitive advantage in the market. The research was basically targeting to establish the various benefits that the company obtains from the electronic supply chain as being the main objective.

Objectives

The main objective of this research is to find out the way Sysco benefit from the electronic supply chain.

Other objectives include:

1. To find out whether there are any changes in the costs from the time electronic supply management was adopted by the business organization (Sysco).
2. To establish whether there are any risks associated with the implementation of the electronic supply chain.
3. To find out whether there are any hardships associated with the meeting of the demands of the customers.
4. To find out whether there is any likelihood for the buyer to achieve the efficiency that is higher at the time of buying goods and services as compared to the past.

Scope and Assumptions

The intelligence in the modern day has direct involvement to business, where more and more developed technologies have assisted business to reduce cost and improve efficiency, so does Sysco. Sysco had provided the e-Sysco internet interface to connect suppliers and customers. In this research paper, it has been discovered the way Sysco benefits from e-Sysco. Reviewing the literature assisted to a great extent in understanding and discovering the general advantage of the e-supply chain. The interview method was used as a primary research method. The interview people were the merchandise buyers and the employees in Sysco, suppliers, and customers of Sysco. The interview questions were generated based on what was found in the literature review.

The assumption here was that the people who were to be interviewed had perfect knowledge about the electronic supply chain and thus the information that they gave out was reliable information.

Method of Study

This study started by reviewing the available literature from other authors who have carried out research in the same field, that is, in regard to the electronic supply chain. Then this was followed by collecting more data using the interview method as a way of collecting the data in which the number of people that were interviewed was 12. These interviewees consisted of the merchandise buyers and the employees at Sysco. After collecting the data, there was the analysis of the data and afterward, there was the presentation of the results.

The questions that were used in the interview included:

1. Why was electronic supply chain management introduced in the organization (Sysco)?
2. Is there any likelihood for the buyer to achieve the efficiency that is higher at the time of buying goods and services as compared to the past?
3. Are there any hardships in meeting the demands of the customers?
4. Are there any risks associated with the use of the e-supply chain in the company?
5. How has the level of costs changed since the implementation of electronic supply chain management in the organization?

The interviewees were asked these questions, one question at a time, allowing them to elaborate on their views. This was recorded down by the interviewer in the questionnaires. Later, this data was collected and cleaned up for any errors in readiness for analysis.

Literature Review

According to Hayes (2004), among the many opportunities provided by the internet, possibly the one holding much long-term promise and giving out prompt benefit is the carrying out of the optimization of the chain of supply. Hayes puts it that the ability of the internet to do away with the remove the hardships of communication, reach the relevant audience as well as the capability to support collaboration with no error fits in the management and optimization of the widespread participants in all supply chain dimensions.

Hayes goes ahead to give examples of the business organizations that have made use of the e-supply chain. For instance, he puts it that the Dell computer Corporation has acquired identification as well as achievement in terms of finances for the reason of putting in place streamlining of the supply chain and the processes in business and at the same time offering to the clients the product choices that are custom-made.

According to Hussain and Subramoniam (N.d), while the cost of energy goes on going up, the companies in both the manufacturing and service industries have considered their supply chains as quite significant areas for strategically bringing down the level of the costs. As business organizations look for ways to achieve efficiencies, among the best opportunities is to streamline their supply chain management. The internet is playing a great part on an increasing level in the process of looking at the supply chain management that is efficient (William, 2004).

Hussain and Subramoniam (N.d), goes further to point out that the internet has several impacts on the chain of supply. Among the topics covered in the literature on a high level is the impact of e-business. E-business refers to the capability of a firm to link electronically in several ways with many organizations; internally as well as externally, for various reasons. In order to acquire joint optimization of main supply chain management decisions, it is better than the flow of the information that is there be free and smooth across the whole chain so as to have an analysis that is all-inclusive.

Another impact of the internet is information sharing. This refers to the way the internet can be utilized in order to have access to information as well as carry out the transmission of the information among the partners in the supply chain. Among the most modern computer applications involve the internet in the field of sharing information and SCM. Just like other changes realized in other business fields, the setting up of the computer technology came in with record changes in the manner the organizations carry out the management of the processes of the sharing of information; from the use of this technology in the development of the products to the use of the technology in carrying out surveys of the customer satisfaction after carrying out the sales. The use of computers has played a fundamental role in information flow and not just in the organizations as single entities but among organizations that are separate entities (Hussain and Subramoniam, N.d).

Alongside the sharing and accessing of information by the partners in the supply chain, it also enables these partners to create, store, disseminate, and apply organizational knowledge. This is known as knowledge management or simply as KM. In order to acquire success at supply chain management, a business organization must have the knowledge and share this knowledge about several components of this process. The knowledge originates from both inside the organization and outside of the organization. Internal knowledge may be in regard to such issues as the sources of the manufacturing delays, whereabouts of subassemblies, among others. The external sources of knowledge include the final consumers’ expectations, where e-route components are, among other sources (Davenport and Prusak, 1998).

In the absence of sharing of the knowledge between those members of the supply chain, it has been established that in such a situation the overall performance can be greatly affected. As such, it is argued that knowledge management can greatly boost the level of success of the supply chain management efforts that are already there and even bring up the level of the possibility of success of the fresh supply chain management involvements (Hussain and Subramoniam, N.d).

According to Coe (2004), the manufacturers are considering electronic supply chain collaboration as a way that can enable them to improve on their competitive advantages. The advantages that may accrue from electronic supply chain collaboration (ESCC) have for quite some time been explained in the literature. However, it was only after considerable advances being carried out in recent times in regard to the ability of the IT or information technology have there has been verification of these advantages/ benefits on the basis of the empirical studies.

The high cost associated with the ESCC has brought in a limitation in regard to its application to the business organizations that are larger. Even if the level of interest in ESCC is on the high level in the circles of information systems and business, the big faction formed by the small manufacturers has obtained scanty attention. There is a suggestion shown by a theory that ESCC benefits are brought to a higher level as more and more participants in the supply chain put together the information systems they have to a supply chain network (Coe, 2004).

Hayes (2004) puts it that the benefits of the e-supply chain management are so many and the prospective synergies are so convincing that the business organizations have been so much overwhelmed by its promise. For instance, the Ford Company is making efforts to prop up a greater partnership with those companies that make supplies by carrying out the simplification and computerization of the process of product sharing. According to him, business organizations all over the world have recognition of the vitality of automating and making tight their chains of supply through mediums that are electronic. These organizations don’t have any other choice since the competitors are doing this one by one. The buyers that are large are employing the leverage that they have to make a demand for supply chain management that is much better. Just as in the similar manner as one business organization puts force on the supply chain it has to raise the level of effectiveness and cut down the costs, the organization is as well forced by its partners in trade to carry out its own operations in a manner that is more efficient and make its prices to be more competitive. Hayes emphasizes that in the absence of the internet, the efforts in regard to the electronic supply chain management would be on a slow-moving track and not on a track that is fast-moving. The perfect platform for launching the electronic supply chain management proves to be the internet since the internet has common characteristics with the supply chain.

According to Hayes (2004), the benefits of the electronic supply chain to the supplier can be traced in two different categories. This is dependent on the kind of program of electronic supply chain management the supplier takes part in. There are those programs that concentrate or focus on collaboration and those that focus on business opportunities. For those programs that put much focus on collaboration in terms of sharing product data, product designs among other things, there is a prospect by the suppliers to make stronger the way they engage in forecasting. They will also be able to meet the demands of their clients and even exceed by providing to these clients the product combination that is right as well as services on a timely basis. They can also be able to bring in line the schedules for production as well as the manufacturing capacity with the buying trends to bring improvement in the management, inventory, and others.

For those programs that put much focus on the business opportunities, the biggest benefit to the supplier emanates from taking part in marketplaces that are big and are online. If such marketplaces are mostly visited by a large number of critical buyers, they stretch the market reach of the supplier and prospectively bring up the level of sales in general. Since this stretched market reach is acquired at a very lower cost as compared to the rest of the channels of sales, this turns out to give an indication that it is a cost-effective way to carry out the marketing of goods as well as services (Hayes, 2004).

Generally, the benefits to the buyer that come from electronic supply chain management fall into three categories. The first one is that the buyer will be in a position to buy the materials at a cost that is lower basically for the reason of price transparency and competition. Those who buy goods through an e-marketplace full of several suppliers have a hope of taking advantage of competition among these suppliers and also take advantage of vibrant pricing opportunities to secure the minimum price possible for the goods as well as the services.

The second benefit to the buyers is that there is the likelihood for the buyer to acquire efficiency that is higher at the time of buying the goods and services, eventually bringing down the level of the overall cost of conducting business. More so, there can be setting up of links that are stronger by the buyer with the suppliers, having a more close partnership in the goods and services growth and design, and in carrying out forecasting, setting up, and arrangement the activities for production.

Data Collection

Data was collected through the use of the questionnaires, that is, the primary data. Twelve people were interviewed using a questionnaire that had five questions in relation to the objectives of the study. The main objective of the study was to find out how Sysco benefits from the electronic supply chain.

The interviews were asked these questions, one question at a time, allowing them to elaborate on their views. This was recorded down by the interviewer in the questionnaires. Later, this data was collected and cleaned up for any errors in readiness for analysis

Data Analysis

All the people contacted were keen to put it that the electronic supply chain (e-Sysco) was the most effective tool that could be employed in order to bring down the level of costs making their operations cost-effective. They emphasized that this played a major role in enabling the Sysco Company to stand a better chance in a competition that is quite tough in the current times. They indicated that the costs have been substantially cut down as compared to the past when the company had not adopted the electronic supply chain.

They further agreed unanimously that the likelihood of achieving efficiency at a higher level at the time of buying their products since there was reliable coordination of activities in the organization following the company’s adoption of the electronic supply chain management.

The study established that there are very minimal risks associated with the electronic chain supply with more than 90 percent of the respondents having a belief that there were even no risks. The respondents contended that the initial cost of setting up such technology was high. However, they emphasized that the costs incurred in the supply chain would considerably go down as the implementation of the electronic supply chain took root. Though the cost of the establishment may be relatively higher, in not a very long term, these costs would have to be recovered and in overall terms, costs will be lower than in the absence of the electronic supply chain.

It was established that since the setting up of the e-supply chain, the costs have gone down considerably as compared to the time when other channels such as telemarketing and mass mailing were set up. They put it that this was a result of having an extensive market reach which is acquired at a lower cost that comes with the electronic supply chain implying that this is a cost-effective way to carry out the marketing of goods and services.

In regard to the issue of meeting the customers’ demands, all those who were contacted suggested that there were no hardships in meeting these demands. They agreed that, with the use of the electronic supply management, there was easiness in meeting the demands of the customers for there was a possibility of trying to establish those demands in advance and therefore this removed any inconveniences or hardships. There was a provision by the company to the customers of the product combination that was right and the services that were right on good time without any unnecessary delays.

Summary of the Analysis

In the analysis, several things have been established. In general terms, the electronic supply chain is of great benefit. It has been seen that the adoption of the electronic supply chain and the use of the internet has enabled the company to be able to bring down the level of its costs and bring up the level of its efficiency.

The company has been able to meet the demands of the customers without any unnecessary delays or inconveniences. Furthermore; there is an indication that there is a high likelihood of achieving efficiency at a higher level at the time of buying their products since there was reliable coordination of activities in the organization following the company’s adoption of the electronic supply chain management.

It has also been indicated that the level of risks in the organization associated with the electronic supply chain is quite at a very minimal level. The initial costs for setting up an electronic supply chain might have been relatively higher but this business organization has been able to bring down the general level of the costs and thus enabling it to remain competitive on the market.

Conclusion

The internet offers a tool that enables the supply chain activities to be undertaken in a way that is synchronized, instantaneous and enhancing the supply chain performance that is optimal. The advantages or rather the positive benefits that come up as a result of incorporating the use of the internet in the management are far much more than the risks and the costs that are associated, the business organizations who have been successful in doing this have a competitive advantage over other organizations within the respective industries over those organizations that haven’t. The internet is an effective tool that can be used in supply chain management in order to bring about improvement in the level of customer satisfaction, bring down the costs, have a smooth flow in production, and make the cycle times less long.

As it has been seen, the Sysco Company is not an exception in terms of deriving benefits from these emerging technologies. The company has embarked on the use of the e-supply chain which has actually played a major role in enabling the company to realize efficiency in its operations at very minimal costs. Therefore, this is a clear indication that, for any business organization that aims to achieve a competitive advantage, it needs to seriously consider adopting the use of the internet in its operations and especially trying to establish the electronic supply chain if it has not put this in place.

Reference

Coe, TM. (2004), Electronic Supply Chain collaboration for small job shop manufacturers: An explanatory triangulation study.Web.

Davenport, T. and L. Prusak, (1998). Working Knowledge: How Organizations Manage What They Know, Boston: HBS Press.

Hayes, IS. (2004). Optimizing the e-supply chain: The final frontier? Web.

Hussain, NM and Subramoniam, S. (N.d). Electronic supply chain management: Some latest issues and practices. 2010. Web.

Sysco Corporation, (2010). Welcome to Sysco. Web.

William, ML (2004). Supply chain management and the internet, Online Information Review, Emerald, Vol 28, Number 4.