Supply chain management project

1 Introduction

Many organizations implement supply chain management (SCM) projects to enhance inter-
organizational coordination, increase efficiency, add value, and ultimately improve the bottom
line. SCM project is a special class of enterprise level project that can potentially generate high
returns, but also has high risks arising from unpredictability and technical complexity. The
technologies that enable SCM business solutions typically span vertical architectural levels
(business, application, and technology architectures), and integrate horizontal inter-
organizational processes and enterprise applications. The inherent technological complexities
and intricacies of convoluted business processes associated with SCM projects can result in
highly visible and expensivefailures.Charette(2005) documented SCM-related project failures at
Avis Europe, Ford, Hershey Foods, Hewett-Packard, Hudson Bay, Kmart, Nike and Sainsbury
PLC with losses ranging from $33.3 million to $527 million. Thus, over time successfully
selecting the right SCM projects has become a critical management issue. Like any major capital
investment, SCM initiatives must show significant benefits to warrant their continuation and
expansion throughout the enterprise. While project evaluation and selection methodologies have
been abundantly available to business decision makers, information on utilizing them in the
context of SCM projects is limited inthe academic literature. Three notable exceptions are the
works by (1) Sarkis and Talluri (2004) who use the analytical hierarchy process and goal
programming to evaluate and select software for e-commerce software and communication
systems for a supply chain, (2) Alvarado et al. (2008) who describe a value mapping framework
to identify stakeholder value in SCM IT projects, and (3) Brun and Caridi (2008) who use a
value and risk assessment methodology to evaluate SCM projects. There are a number of
practitioner articles that discuss the need for appropriate evaluation and selection of SCM and
enterprise-wide IT projects (Rodin 2001; Shaw 2006; Vaskelis 2001; Hartman 2002; Elkins
2003). The complexity of SCM projects makes it necessary to evaluate them as inter-
organizational systems with multiple decision makers (Sarkis and Talluri 2004), apply lessons
learned from prior implementations (de Burca et al. 2005), and develop strategic framework for
appraisal and audit of the associated systems (Sarkis and Sundarraj 2000). Hence, we dig deeper
into the issue and make attempts to have a better understanding of the complex decision-making
process of selecting SCM projects using exploratory case study. Three projects involving various
aspects of supply chain management at three multi-national organizations are investigated. By
examining the experiences obtained from these projects and analyzing opinions of the personnel
involved, we identify nine useful practices in selection of such projects. While eight of them had
been acknowledged previously, they were scattered throughout the prior literature on ERP
(enterprise resource planning), IT (information technology), and R&D (research & development)
project management. We put forth these practices together and establish their relevance in the
context of SCM project selection. In addition, we identify a new management practice of
including return on investment (ROI) consideration beyond organizational boundaries or
assessment of potential impact on supply chain partners in the SCM project selection process,
The rest of the paper is organized as follows. First, we provide a broad review of the extant
literature on evaluation criteria and justification procedures of different types of projects. Next,
the research methodology is presented. Subsequently, three cases are presented and analyzed.
This leads to identification of good practices in selection of SCM projects. Finally, we conclude
the paper with comparative analysis with other good practices and discussions on the
contribution of the study, managerial implications, and future research.
 Chapter 02

Review of literature

2 Literature review

We review well-established evaluation approaches used in selection of projects in

different areas including R&D, IT,

and SCM, and refer to project management best practices. We cover both academic
and practitioner journals. The review directs us to a thorough understanding of the
current practices and to develop a basis of comparison with the information
obtained from the case study. In the following
sectionsweprovidedetaileddiscussionsonexistingliterature.

2.1 General approaches for project evaluation

In order to economically justify implementation of a project, basic concepts like

net present value, hurdle rate, internal rate of return, and cash flow are used widely
(Foley 2002). Rogow (2004) interviewed a number of executives involved with IT
project decisions. His findings suggest that companies should look beyond return
on investment and total cost of ownership. Some organizations have formalized
process measurement and process improvement as part of project justification
(Segars et al. 2001). Other considerations such as multi-year financial commitment
analysis and budget provisioning should also be made before taking the final
project selection decision. Lefley (2004) also argued that financial approach for
appraising strategic benefits of projects is inappropriate. The research looked into
procedure for developing strategic indices (SI) that can be used to identify and
evaluate projects’ strategic benefits. Stanleigh (2006) mentioned that projects
should be aligned with organizations’ core strategies. Organizations should have
well structured process of prioritizing projects. The academic literature is filled
with sophisticated techniques (such as analytic hierarchy approach, conditional
stochastic dominance, goal programming, etc. to name just a few) to evaluate
projects. However, evidence suggests that these sophisticated evaluation
techniques have not found wide acceptance among practitioners. According to the
Mainstay Partners ’ study originated in 1999, only 21% of the companies have
processes for prioritizing and managing technology investments. Most choose their
IT investments on an ad-hoc basis, favoring pet projects of powerful managers
(Hartman 2002). Many use ROI metrics that are inconsistent from one project to
another making it nearly impossible to correctly choose which projects should be
funded and which ones should not be selected (Lewis and Koller 2001).

2.2 R&D project evaluation

Many R&D portfolio managers use a hybrid approach that combines different
traditional approaches; they rely far less on financial methods for portfolio
management and put stress on management buy-in and support (Cooper et al.
1998). R&D project evaluation models historically fall into three categories:
financial, risk, and scoring (Lawson et al. 2006). While financial methods have
been found to be used

The selection of supply chain management projects 165

most widely amongst large organizations, companies that use hybrid approaches
incorporating risk analysis and scoring scheme with financial analysis generally do
a better job in selecting projects (Cooper et al. 2001). Despite potential advantages
of structured hybrid approaches, they may becost prohibitive. Also, sometimes
management thinks that high quality decisions can be made primarily by the
experienced executives even without a structured approach. Some of the complex
methods for R&D project evaluation are mentioned here. Meade and Presley
(2002) discussed how analytic network process (ANP), a more general form of
analytic hierarchy process (AHP) and capable of assessing dynamic multi-
directional relationship among the decision attributes, could be used for selecting
R&D projects. Sun and Ma (2005) proposed multi-box packing model heuristic
based on integer programming for simultaneously selecting and scheduling R&D
projects. The total value of the selected projects was maximized and schedules
were so made that annual costs were kept close to the estimated annual budgets as
much as possible. Ringuest et al. (2000) used a methodology for adding or
removing a project from an existing R&D portfolio using the criterion of
conditional stochastic dominance which analyzed the effect of a given project on
the risk and return of the existing portfolio. Using a multiple case study approach
Verma and Sinha (2002) showed how interdependencies between R&D projects in
technology firms influence project performance. Hence, a portfolio approach may
be particularly useful for selecting R&D projects when resources are available to
implement the methodology.

2.3 IT project evaluation

The methodologies used for evaluation and selection of IT projects can be

classified into four major categories: economic, strategic, analytical, and integrated
approaches (Irani et al. 1997). Economic approaches generally use financial
measurements such as return on investment (ROI), internal rate of return (IRR), net
present value (NPV), and payback approaches. They largely ignore intangible
factors. Strategic approaches are less structured, and deal with projects’ strategic
alliances with corporate goals by considering both tangible and intangible factors.
Analytical approaches such as scoring models (Nelson 1986), risk analysis
(Remenyi and Heafield 1995), and analytic hierarchy process (Saaty 1990) are
highly structured but subjective with the use of tangible and intangible factors.
Integrated approaches such as balanced scorecard (Kaplan and Norton 1996) and
multi-attribute utility theory (Sloggy 1984) combine subjectivity with formal
structure, and incorporate both financial and non-financial dimensions of decision
making. It is argued that traditional economic appraisal techniques are not
appropriate for justifying

investment in IT projects because of intangible benefits, and direct and indirect

costs associated with these projects. On the other hand, while analytical and
integrated approaches are capable of considering intangible factors they are
complicated to use (Irani et al. 1997). Milis and Mercken (2004) argued while
traditional appraisal techniques such as payback period and net present value
methods are not quite suitable for IT project evaluation, the newer appraisal
methods are difficult to interpret and use. They suggested that reliance on a single
technique may yield suboptimal results and proposed multi-layer evaluation
process based on balanced scorecard. Kulak et al. (2005) proposed axiomatic
design (AD) approach, which is suitable for multi-attribute evaluation of IT
projects.

2.4 SCM project evaluation

SCM projects are often closely linked to ERP that have emerged as the backbone
of the modern information technology infrastructure. Many organizations have
adopted ERP systems with the goal of integrating key business processes so that
information can flow freely between various parts of the firm (Laframboise and
Reyes 2005). The inter-organizational nature of supply chain makes the evaluation
more complex (Clemons and Kleindorfer 1992; Levinson 1994). Overall
acceptance by supply chain partners associated with such projects is critical for
success. Sarkis and Talluri (2004) mentioned about lack of methodologies in the
literature on justification of interorganizational systems. Brun and Caridi (2008)
evaluated SCM projects by identifying key performance indicators and ultimately
performing a performance gap analysis. Alvarado et al. (2008) developed a value-
mapping framework which examined the contributions of multiple stakeholders in
SCM projects taking into consideration of the fact that a dominant partner in a
supply chain might try to move decisions in their favor. Since SCM projects
influence relationships with upstream/downstream suppliers/customers, supply-
chain-wide performance measures are needed to measure effectiveness (Chin et al.
2004). However, many companies ignore this and tend to stick to organization
based measures only.

2.5 Best practices in project management

The Project Management Institute has “provided project management insight, best
practices and enterprise support for the project management profession” since 1969
(Project Management Institute 2006). Loo (2003) described best practices as the
“optimum ways of performing work to achieve high performance” and mentioned
that much of the literature on best practices are related to benchmarking against
external organizations. Loo (2002) included inte

166 R.G. Mathieu, R. Pal

grated project management systems, effective scope management, planning,

scheduling and controlling of project, high-caliber project teams, stake-holder
participation, effective communication within teams and externally, and customer
satisfaction among critical success factors in project management. One approach to
best practices in the supply chain community has been the Supply-Chain
Operations Reference-model (SCOR). SCOR has been developed and endorsed by
the Supply-Chain Council as the cross-industry standard diagnostic tool for supply
chain management (Supply Chain Council 2011). SCM groups often use SCOR to
establish performance metrics and compare supply chain performance with
industry counterparts. It has been used successfully in a number of SCM projects
despite the model’s limitations as reported in the literature (Power 2005). One
major limitation is that SCOR does not explicitly assist in project evaluation
process.

2.6 Summary

A small number of research studies have noted distinctive aspects in evaluating

SCM projects. Pinto and Mantel (1990) found that client satisfaction and perceived
quality accounted for approximately 57% of the total variation in success of the
projects they studied. Bryde (2003) also stressed on the importance of customer
satisfaction in implementing projects successfully. In case of SCM projects the
customers can be internal as well as external (such as upstream and/or downstream
supply chain partners) to the organization. Hence, implication of a SCM project for
such partners may need to be considered in the project evaluation process.
However, reported existing methodologies rarely mention about it. Flaig (2005)
argued that classical net present value (NPV) approach falls short of capturing
some of the project’s major effects in process improvement including quality and
yield rate. Also, probability of completion is not considered in classical NPV.
According to Knill (2000) it is imperative to consider the impact on adjacent and
downstream processes when evaluating a SCM project. It is clear that SCM
projects often pose additional challenges and may require further considerations in
the process of evaluation and selection. Although the literature discusses a wide
range of project evaluation methodologies at length, understanding of evaluation
processes for selecting SCM projects is rather limited. Detailed information on
how organizations that successfully completed SCM projects had actually
evaluated and selected the projects is not available. Also, it is not known if there
are commonalities among the decision making processes used to evaluate and
select successful SCM projects. In subsequent sections we present how answers to
these questions are explored.
 Chapter 03

Research Methodology

3 Research methodology

We conduct an exploratory case study with the primary objective of identifying a

set of generalizable good practices in selection of SCM projects. A case study
approach was adopted as it allowed us to investigate what exactly happened in the
evaluation and selection of supply chain projects in an organization and enabled us
to understand inter-relationships of various factors involved in the process. We
purposefully sought to go beyond different analytical techniques to examine the
processes and methodologies that organizations employ in the decision making
process. Here, good project selection practices are defined as the recommendations
based on prior outstanding results that can be adapted in the evaluation and
selection of a project. Information obtained through case studies provided us with
necessary depth to understand and analyze the process. A cohesive set of good
practices were determined after a series of interviews with managers and
executives involved in the project evaluation and selection process at three
different Fortune 1000 companies. These practices are then summarized and
compared to similar findings and theoretical formulations reported in the extant
literature. Case-based research allows investigators to understand the nature and
complexity of the processes taking place and serves as a basis for theory building.
We adopted the general principles of theory building through case study research
(Eisenhardt 1989; McCutcheon and Meredith 1993; Yin2003). This is particularly
useful when there is no specifically defined construct. There is a need for close
look at within-case and cross-case analysis along with existing literature. Such
approach has been used successfully to identify critical success factors in
managing projects (Fricke and Shenhar 2000; Verma and Sinha 2002). A multiple-
case study approach was chosen as a mechanism for determining the good
practices in SCM project selection because multiple case studies are sometimes
more compelling (Herriott and Firestone 1983) and are analogous to conducting
multiple experiments to replicate the findings (Yin 2003). Since resource
requirement for going beyond single case study was not an issue the opportunity to
analyze findings from multiple experiments was attractive. Hence, we adopted an
exploratory multiple-case research strategy as elaborated in Yin (2003). The salient
steps included in the methodology are research design, preparation for data
collection, collecting the evidence, and analyzing the evidence.

3.1 Research design

An important starting point was a review of the literature on the evaluation and
selection of SCM projects. The scope of

The selection of supply chain management projects 167

the review included research papers and trade magazine articles that discussed
economic justification of supply chain projects as well as related projects such as
ERP, material handling, manufacturing, and information technology. This helped
us justify the need for identifying the good practices in SCM project selection and
institute the research questions. Subsequently, we discussed the suitability of
exploratory multiple case study as appropriate research method. The purpose of the
case study is to explore how organizations evaluate and select supply chain
projects successfully to reap benefits. Certain steps and procedures are followed in
evaluation and selection of those successful projects. Based on prior outstanding
results and general adaptability potential, some of these steps and procedures are
recognized as good practices. Here, we use thorough study of project experience
including project evaluation, execution, and outcome as embedded unit of analysis
(Yin 2003). We also analyze if the identified practices have any element of
uniqueness by comparing them with the practices in other areas.

3.2 Preparation for data collection

One of the authors was a principal investigator in all three cases. We approached
with an open mind and maintained an unbiased view without preconceived notions
so that any contradictory evidence would not be missed.

3.2.1 Protocol development

Structured client interviews were the primary source of data in this study.
Following the principles of case study research, a protocol was developed that
included not only the interview questions but also the procedures to be used by the
interviewers and overview of the case study project (Yin 2003). Each interview
session started with a statement about the purpose of the research and an assurance
that the respondent would receive a transcript of the interview with a chance to
change and/or edit any statements in the transcript. Interview script began with the
interviewee’s description of the project. This description was followed by
questions in five areas of inquiry: formal methods, cost assessment, benefits
assessment, risk assessment, and ROI in the project evaluation process. It was
followed by questions designed to solicit experiences related to the economic
valuation of projects. These questions were developed in discussion with few
executives from the participating organizations. After sending the initial draft of
the questionnaire, one of the authors met with the executives individually to
understand their interpretations of the questions and also to include their
suggestions. The process continued iteratively and the questionnaire was tested
over a course of three months

prior to the actual interviews to increase the reliability of the case research.

3.2.2 Participant selection

Participating organizations were selected based on their long-term involvement and

expertise in the supply chain projects. This was important to establish the good
practices. We had to limit the number of organizations to three because of logistical
reasons. Each of the three organizations selected was global publicly traded
company that had at least one organizational group devoted to the management and
execution of SCM projects. At the same time they were selected from different
industry segments as maximally different cases might be helpful to ensure rich
pool of diversity (McCutcheon and Meredith 1993). While selecting the
organizations, we made sure that we would be given access to the key personnel
who completed successful SCM project(s). Brief information of the participants is
presented in Table 1.

3.3 Collecting the evidence

Data were collected through face-to-face interview sessions that lasted between
sixty and ninety minutes. A scripted interview approach was used. The questions
were developed based on a review of literature and background discussions with
knowledgeable project managers. At the end of the interviews each participant
received a draft manuscript of the interview, and was asked to review it for
accuracy and add comments where appropriate. Minor modifications were made to
the final draft of the manuscript based on feedback from the participants.
Following Eisenhardt’s(1989) recommendations, data were collected from each of
the cases as independent entity. Although we were interested to see if there were
any commonalities among the cases we made deliberate attempt not to lead
discussions with any preconceived notions. We believe this reduced reflexivity
(Yin 2003), i.e. leading interviewee to tell what interviewer wants to hear. We also
examined the project documents that were provided by the participating
organizations. It helped us cross-examine and triangulate the data to a good extent.
In order to ensure reliability of the information gathered we kept detailed records
of interviews and reviewed documents, and cited these evidences in the discussion
leading to identification of good practices in SCM project selection process.

3.4 Analyzing the evidence

Following Eisenhardt’s(1989) recommendations to improve validity of the results,

the same interviewing team was sent to all three participating organizations and
one of the authorsstayed out of the interview process to play devil’s advocate and
critique the initial findings of the interviewing team. The goal was to treat all the
evidences fairly with adequate considerations for alternative interpretations and to
produce analytic conclusions consistent with an exploratory research project.
Hence, we used the analytical techniques suggested by Miles and Huberman
(1994) whereby a matrix of categories was created and evidences were placed
within such categories. We used this cross-case synthesis by comparing the
findings from three case studies to establish the good practices. We also used
patternmatching logic, as elaborated in Yin (2003), to compare the anticipated
project evaluation and selection considerations with empirical evidence. The
details are presented in the subsequent sections.
CONCLUSION

We compare the useful practices in selecting SCM projects, which we identified

earlier, with the well known practices in other related areas. Subsequently, we
discuss the contributions and managerial implications of the findings followed by
limitations and future research implications.

7.1 Comparison with practices in other areas

We discuss the rationale of the good practices in SCM project selection and
examine if they can be linked with the recommendations made in other related
areas. The discussion is summarized in Table 10. We find that selection of SCM
project is greatly influenced by its alignment with organizational strategy. ERP
(Nah et al. 2003; Huang et al. 2004), IT (Irani et al. 1997; Jiang and Klein 1999),
general project management (Pinto and Slevin 1988; Kaplan and Norton 1996;
Stanleigh 2006) best practice literature also echo similar viewpoints. Vereecke et
al. (2003) mentioned about importance of program management that involves
coordinated management of projects with a common strategic objective. It is
natural that organization’s overall strategies will govern the SCM project
evaluation process. Jiang and Klein (1999) found project evaluation criteria to vary
with strategic orientation of organizations’ information system in time dimension.
While organizations with current strategic system place more emphasis on internal
factors, organizations with future strategic system stress on both internal and
external factors. Huang et al. (2004) identified management support as a critical
success factor in ERP implementation. Cooper et al. (1998) stressed the importance
of management buy-in and support in R&D project selection. It is expected that
any major project should meet the strategic corporate objectives in order to get
approved by the management. Evaluation of SCM projects by a formal review
panel is justified for its potential to provide objective review. ITand general project
management literature favors this practice for all major projects competing for
limited resources (Segars et al. 2001; Stanleigh 2006). Scope management is a
critical part of any project. In addition, effect of process change is overwhelming
for any projects that involve significant information exchange

The selection of supply chain management projects 177

between different business units. Hence, business process reengineering plays a
crucial role in ERP projects (Nah et al. 2003; Huang et al. 2004). Like ERP
projects, SCM projects involve both intra and inter organizational information
exchange and process flows. Hence, effect of process changes should be
considered in SCM project evaluation decision. Similar viewpoints are expressed
in IT project management (Segars et al. 2001) and general project management
best practices (Loo 2002; Stanleigh 2006). Detailed benefit and cost estimation is
important for any kind of project as it is a primary basis for project justification.
However, additional layers of complexity are added based on significance of a
project. Thus, it is quite expected that benefit and cost estimation for major
projects like ERP and SCM projects are complicated. Risk assessment in project
evaluation is a common practice. A number of articles related to evaluation of
projects in various areas such as IT (Remenyi and Heafield 1995; Badri et al. 2001;
Kulak et al. 2005), ERP (Schulz 2000; Nah et al. 2003), R&D (Ringuest et al.
2000; Lawson et al.2006), and project management (Stanleigh 2006; Maytorena et
al. 2007) mention about necessity of risk analysis. SCM projects are no exceptions
and importance of the issue may be influenced by project size. Lack of future
planning (Schulz 2000) and late completion (Nah et al. 2003) have been reported
as major obstacles in ERP projects and are attributed to large size of ERP projects.
Although typical SCM projects are smaller than ERP projects, the size of SCM
projects is still significant. Hence, smooth execution and on-time completion of
SCM project is an important issue and associated risk must be closely analyzed.
Also, varying risk attitude of different firms taking part in a SCM project adds an
interesting twist to the analysis. Separation of duties of the project manager and the
IT lead is important in major IT projects (Solomon 2002). Since SCM projects
usually involve significant IT implementation, the issue should be considered.
Minarro-Viseras et al. (2005) found appropriate staffing and project manager’s
personal quality and skill to lead the project to be key success factors in strategic
manufacturing initiatives (SMI). Supply chain projects have many similarities with
SMI and these considerations are also important while evaluating and selecting a
SCM project. Requirements for streamlining complicated business processes
and/or eliminating potential conflicts between business units may drive
organizational redesign. The ERP best practice article by Nah et al. (2003)
recommends overcoming the issue of unnecessary complexity by undertaking
organizational change as necessary. The article cited Rogers’ (1995) diffusion of
innovation theory that suggests that the rate of adoption of an innovation is
negatively related to its complexity. Many of the SCM

projects may be viewed as adoption of innovation by the implementing

organizations. Hence, it is justified that complexity of SCM projects should also be
reduced or eliminated whenever necessary, and organizational redesign can be a
vehicle to reach the goal. The importance of periodic monitoring and reviews to
ensure success is discussed in Loo (2003). Since the initial ROI calculation of
SCM projects during the approval process are usually quite involved, it makes
sense to reuse the work in subsequent evaluations. The supply chain literature
emphasizes the importance of upstream/downstream supply partners in ensuring
streamlined business operations. Hence, it is justified that their perspectives,
including gains and losses (if any), should be considered before a SCM project is
selected. While this consideration is specific to SCM projects, similar
consideration may be applicable for the projects in other areas where collaboration
among organizations is required.

7.2 Contribution and managerial implications

The good practices identified in this paper provide sound evaluation and selection
guidelines during the planning stage of a supply chain project. Our findings
confirm the importance of talented managers who understand the importance of
thorough project planning. Management’s understanding of the useful practices
presented in this paper can have a significant impact on an organization’s ability to
select and implement SCM projects with a high payoff. One of the main
contributions of our study is the enhancement of the knowledge base in supply
chain project selection decisions. The literature suggests that selection of
appropriate SCM project and its implementation may pose additional challenges.
Although the literature discusses various project evaluation methodologies and
project management best practice, information on SCM project selection process is
rather limited. Detailed information on how organizations should evaluate and
select the SCM projects successfully is not widely available. To the best of our
knowledge, we take the first comprehensive step towards exploring this issue. Nine
useful practices for SCM project selection were identified in this study. While eight
of them had been previously identified, those practices were scattered throughout
the prior literature on ERP, IT, and R&D project management. Unlike prior studies,
by focusing our research on SCM projects we were able to identify the practices
that are critical to the success of SCM projects. In addition, we identified a new
management practice of including return on investment (ROI) consideration
beyond organizational boundaries or assessment of potential impact on supply
chain partners in the SCM project selection process. For each practice, we establish
its relevance to project selection

178 R.G. Mathieu, R. Pal

rationale and the link with good practices in related areas. Also, the project
selection practices identified here are backed up by evidences gathered from
successful real-life SCM projects. Thus, practitioners can instill themselves with
certain degree of confidence in following these practices for selecting SCM
projects. Although the extant literature documents many of the useful practices
identified here in the context of non-SCM projects, there is a need for investigating
if those practices are useful in selecting SCM projects appropriately. This study
provides the much needed confirmation to the least.

7.3 Limitations and future research implications

All three organizations, which we studied, implemented SCM projects

successfully. The case of unsuccessful projects was out of scope of this study.
Nonetheless, lessons may be learnt from the unsuccessful projects. It may be
worthwhile to investigate if any organizations that fail to implement a SCM project
successfully follow the practices identified in this study and what implications it
may have on potential outcomes. Our study focused on the US based organizations
only. While we expect the findings to be applicable for firms outside the US, there
may be additional considerations in selection of SCM projects which are unique to
their situations. We had to keep the number of firms studied to three for logistical
reasons and hence did not have control factors such as firm size, maturity, etc.
While some of the researchers may prefer to include higher number of firms, some
others have conducted case research with similar or less number of firms. We
chose the firms from different industry segments to make them diverse as much as
possible, but arguments can be made to enhance it further with additional cases.
We hope that this research will lead to more empirical research on the economic
justification of supply chain projects beyond the exploratory stage and towards
theorybased models of SCM project evaluation and selection. Here, we discuss
some of the research ideas that may be taken up going forward. We have
mentioned earlier that risk exposure may not be the same for all stakeholders in a
SCM project. A number of organizations may be willing to take part in a SCM
project and they may have varying degrees of risk aversion. While the cases we
studied did not have any similar situations, it remains to be studied in future how
organizations share risks and if any contract mechanism can be devised to ensure
fair share of risks among participating organizations. We discussed the significance
of considering the perspectives of supply chain partners in SCM project selection.
Walker et al. (2002) discussed the importance of

project partnering and alliance within scope of an assumption that “all parties can
achieve a win-win situation provided they work together to help each other gain
not only a realistic reward for their input but to gain a competitive edge in the
market as a result of their experience on this milestone approach”. However, not
always such win-win situation may persist. It will be interesting to study how the
project selection decisions are made when conflicts between an organization and
its partner(s) may arise out of a proposed SCM project. Also, it will be worthwhile
to compare the decision making process when a dominant organization is driving
the project with the situation when a relatively weak organization is taking the
SCM initiative. Also, large SCM projects may pose unique challenge. Sometimes
these projects are divided into smaller subprojects in multiple phases called
business releases (Moller 2000). This practice reduces risk, promotes learning from
previous experience, keeps the momentum going, and reduces time to receive
returns. Many world-class firms recommend this practice for very large projects.
However, in any of the three cases we studied, business releases were not used.
Although we do not expect any change in the good practices identified here,
further exploration on SCM project with multiple business releases may provide
additional insights.