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IJPDLM
30,7/8
598
International Journal of Physical
Distribution & Logistics
Management, Vol. 30 No. 7/8, 2000,
pp. 598-610. # MCB University
Press, 0960-0035
On a responsive supply chain
information system
H.C.W. Lau and W.B. Lee
Department of Manufacturing Engineering, The Hong Kong
Polytechnic University, Hong Kong
Keywords Supply chain, Information systems, Information exchange, Supplies
Abstract Attempts to propose an infrastructure of a supply chain information system, focusing
on the component modules necessary for the building up of such a system with a description of the
creation of these modules. The proposed supply chain information system embraces the concept of
distributed object technology to enable efficient data exchange among various data objects which
may reside in distributed platforms over geographically isolated regions, thereby leveraging the
responsiveness of the supply chain network. The significance of contribution of this research is the
provision of a cross-platform data exchange system which is able to facilitate the formulation of a
customer-driven supply chain network, thereby enhancing the competitive edge of companies on a
local and global basis.
Introduction
In today's competitive business environment, it is difficult for a company to
survive in isolation of its suppliers and other business partners in the network
of value chain which encompasses the entire production activities of a product
lifecycle. Companies are always looking for ways to cut costs while at the same
time striving to improve qualities of their own products (Buzacott, 1995).
Interest in the concept of supply chain management, which is concerned with
the strategic approach of dealing with logistic planning and operation on an
integrated basis, has steadily increased since the 1980s. This interest increased
significantly when companies saw the benefits of business partnerships within
and beyond their own organization. The supply chain concept is based on the
formation of a value chain network consisting of individual functional entities
committed to provide resources and information to achieve the objectives of
efficient management of suppliers as well as the flow of parts. In general, a
supply chain network comprises the physical element (physical supply chain)
and the information element (information supply chain). In a physical supply
chain, the resource flow and value of the entities are added by the successive
elements of designers, suppliers, carriers, fabrication sites, and distribution
centers. Companies are seeking to become more responsive to changing market
conditions by streamlining and restructuring their organizations, making use
of knowledge work teams. To achieve this, a market-focused production
system is required to manage the complex information communication within
various functional entities of the modern extended enterprise.
The authors would like to acknowledge the support of the Research Committee of The Hong
Kong Polytechnic University in completion of this project.
 To remain competitive, companies must create an environment in which Responsive
there is a controlled sharing of business data and processes, thereby enhancing supply chain
the effectiveness of information interchange among business partners and
suppliers. As companies nowadays focus on their core activities and outsource
the remaining value chain operations to other business partners and parts
suppliers, it is important that the company is able to monitor effectively the
activities outside its boundary. To survive in this environment, companies need 599
better information flow together with easier and quicker access to required
information. In brief, whether or not a company is able to compete depends
heavily on the implementation and the actual running of an efficient and
effective information flow system, not only within the company itself but also
encompassing its business partners and suppliers.
Apart from the issue on the responsiveness to customer demands, the role of
information flow is equally important in order to construct a responsive supply
chain network. Over the past years, there have been unprecedented advances in
information and Internet technologies. Despite the rapid advances of
information technology, the quest for effective solutions to deal with corporate
issues in terms of organizational structure, human resources, strategy and
business processes, has still been regarded as a daunting task.
A responsive enterprise information system should accordingly require
compatibility and interactivity which can cope with the increasingly complex
settings of organizations and markets. With information being considered as
an integral part of a supply chain network, such information systems should
also be regarded as an essential ingredient to provide the customer and supply
chain partners with the ability to see, know, anticipate, model, link, and trade
off available resources (Davis, 1993). While there are ample research activities
related to the strategy, concepts and modeling of supply chain networks (ADC
News, 1998; Desbarats, 1999; Ellam and Cooper, 1990; Harland, 1996; Oliver
and Webber, 1992), studies concerned with the detailed infrastructure of a
supply chain information system which plays the role of monitoring and
coordinating the data interchange among various suppliers, business partners
with the head company in a distributed platform, have not received the
attention they deserve. To address the problem of the lack of research
references in terms of the architectural framework for formulating a data
interchange system, a supply chain information system (SCIS), which is
characterized by its ability to provide accurate and relevant information to
enhance the performance of the supply chain network, is proposed in this
paper. In addition, the proposed SCIS will support the information interchange
between the customer and the entire supply chain, so that companies can use
the information that already exists to support diverse strategies for design,
manufacturing and distribution, resulting in the enhancement of
responsiveness and flexibility of these companies.
The proposed SCIS focuses on the modules necessary for the building up of
such an information flow system. Moreover, the proposed SCIS incorporates
the characteristics of object technology, such as encapsulation, inheritance and
IJPDLM polymorphism (Harmon and Morrissey, 1996), in order to enable efficient data
30,7/8 exchange among business objects (referred to as the organized data about
certain production processes encapsulated in the form of an entity called
objects) located in distributed platforms over geographically isolated regions,
thereby leveraging the responsiveness of the supply chain to cope with the fast-
changing market demands. Furthermore, companies can benefit from the
600 implementation of the proposed SCIS through the integration of their business
objects, both vertically integrated (from tactical to strategic levels) and
horizontally integrated (across multiple business data objects). The proposed
system, if implemented, can be regarded as a fully integrated and distribution-
based information system.

The need for distributed information interchange

As the industry in a wide range of sectors transits into the twenty-first century,
there are radical changes taking place that will reshape the industrial
landscape of world economics. The marketplace has become truly global. There
is increasing fragmentation of almost all markets and customers are requiring
smaller quantities of more customized products. Most companies have much
wider product ranges and they are introducing more new products more
quickly with a focus on the markets (Hayes and Pisano, 1994). These changes
impose challenges and new logistics problems for all manufacturers. A new
paradigm based on the dissecting of the value chain is evolving (Buzacott,
1995).
In the 1970s and 1980s, companies strived to bring their manufacturing
operations under control through the use of formal production and materials
planning, shop floor scheduling and control, and systems like manufacturing
resource planning or MRPII and enterprise resource planning or ERP (Davis,
1993; Ho, 1993; 1996; Simpson and Erenguc, 1996). In the 1990s, people tried
hard to bring their companies to world class status. Companies implemented
total quality management (TQM) methods to bring their processes under
control and create continuous improvement (Grant et al., 1994; Maani et al.,
1994; Terziovski et al., 1997). Also just-in-time (JIT) manufacturing techniques,
such as kanban and zero inventories, have been introduced as companies were
looking for ways to cut costs while at the same time maintaining the quality
standards of products (Flynn et al., 1995; Ho, 1996).
According to the history on the evolution of the manufacturing industry,
some forward thinking companies recognize that if they depend exclusively on
traditional supply chain management approaches, the turnover is not going to
be as profitable as expected (Moody, 1990; Hayes and Pisano, 1994; Buzacott,
1995; Upton, 1995). Companies are now putting more emphasis on information
technology for assistance to enhance the performance of the supply chain
network. However, despite the fact that the development of information
technology has assisted companies to search the technique for competitive
enhancement, it is very often that numerous limitations have been found in
those existing solutions.
 A number of existing (information technology) tools can handle some of the Responsive
requirements though they may not be too cost-effective for SMEs. New supply chain
requirements which are not addressed by current tools are being handled by
external technologies, such as third-party software packages or spreadsheets.
However, these tools are not organized to provide a ``cohesive'' solution for an
information-integrated company. The company ends up with several ``islands''
of software solutions to implement what should ideally be contained within one 601
package. Moreover, Markus and Keil (1994) state that unused information
systems are due to software usability (lack of user-friendliness), poor
implementation, and bad business system design. This notion was echoed by
Garrity and Sanders (1998) as well as by Liebowitz and Khosrowpour (1997); all
of them express their view that failed information system projects have usually
resulted from the poor management of information technology.
Generally speaking, as organizations begin to demand more out of the
computer system to manage their everyday operations, they begin to suffer
from restrictive connectivity and integration constraints. The most likely cause
of failure on the information distributing issue is lack of scalability. Indeed, the
cause of failure of virtually any type of information system is typically an
inability to handle increasing volumes of data and users. Even a small portion
of a large customer base chooses to get information over the Internet (which
could include millions of inquiries per month) would stretch the capability of
the server to the limit. Consequently, any robust Internet server will have to
offer the kind of linear scalability that can only be achieved by using
distributed technologies, such as the Common Object Request Broker
Architecture (CORBA) standard (Object Management Group, 1995), and the
Distributed Component Object Model or DCOM (Brown and Kindel, 1996). The
direct relationship between supply chain management and distributed object
model can be demonstrated by the object-based modeling of value chain
activities from product development to logistics distribution, featuring the
``dynamic and interactive linkage'' of people, parts and machinery within an
organization.
CORBA and DCOM technologies make it possible to distribute information
across virtually any number of physical servers located on a local and/or wide
area network which form the infrastructure of the supply chain. By providing a
seamless architecture for distributed services, CORBA, and DCOM-based
systems avoid the single server bottlenecks that can plague traditional client-
server systems (Flynn, 1998). To achieve efficient data flow over the supply
chain network, an information flow system which leverages the latest
technological development is of the utmost importance. More importantly, this
system should be designed based on its long-term viability. Companies must
examine how the new technology will integrate with their legacy systems,
lower their total cost of ownership, and increase their functionality.
Reviewing the research articles related to supply chain design indicates that,
while there are active research activities conducted in areas concerned with the
theoretical concepts and benefits of information systems of supply chain
IJPDLM management, the study related to the infrastructure in terms of distributed
30,7/8 information interchange necessary for the design and implementation of a
supply chain system has barely been mentioned in contemporary publications.
This paper outlines the component modules which are required in the
formation of the infrastructure of a responsive supply chain information
system (SCIS) that, in turn, is characterized by its ability to provide accurate
602 and relevant information to enhance the performance of the supply chain
network. In addition, the proposed SCIS will support the distributed
information interchange between the customer and the entire supply chain, so
that companies can use the information that already exists to support diverse
strategies for design, manufacturing and distribution.

Infrastructure of a supply chain information system

The performance of a supply chain relies very much on the infrastructure of the
information system which provides the necessary functional support to the
information supply chain. It can be seen that the information supply chain
complements and supplements the physical supply chain in order to achieve
the efficient performance of the whole supply chain network (see Figure 1).
The supply chain information system extends the scope and efficiency of the
supply chain network for the enterprise by providing an infrastructure to
facilitate the efficient exchange of data among various value chain components.
With the inherent features of the information system, the leading
manufacturers do not only respond to the customers' requirement but also
anticipate their demands, thereby enhancing the responsiveness to the
changing markets. The supply chain information system is aimed at making
use of an efficient information flow mechanism for coordinating and
monitoring of the operations within the supply chain. With an integrated
information flow system in place, companies can begin to perform
value-adding activities more efficiently and effectively. In other words,

Figure 1.
Internet-based global
supply chian
information-based activities reflect the operations within the physical value Responsive
chain. Suppliers and business partners can adopt value-adding information supply chain
processes to acquire an ability to ``visualise'' physical operations more
effectively.

Distributed network of supply chain

The network of supply chain information system requests a distributed 603
computing and controlling infrastructure to connect with the computer systems
of the distributed suppliers and business partners. To meet this objective, the
distributed object-oriented technology (Harmon and Morrissey, 1996), which
has achieved remarkable advances in recent years, can play an important role
in terms of easy access and sharing of information across a distributed
network.
Generally speaking, distributed systems go beyond the client/server models
in the sense that networks of platforms can alternatively function as clients or
servers when necessary. Moreover, these systems allow applications to send
messages to other data objects that may reside in databases or on other client
machines in other applications anywhere in an organization. At the moment,
the best approach to developing distributed systems relies on object technology
(Harmon and Morrissey, 1996). The example here is the development of
CORBA specification which defines a software bus ± the Object Request Broker
(ORB) ± that provides the infrastructure necessary to enable cross-platform
communication among distributed objects and client programs (Vogel and
Duddy, 1997). CORBA supports different computing languages and runs on
different machines in heterogeneous distributed environments, and it is a well-
accepted standard. There are a number of specifications and standards
associated with CORBA. The core ones are as following:
. ORB is a middleware with which the developers are able to access data
from objects over remote systems.
. Internet Inter-ORB Protocol (IIOP) is the protocol that ORBs use to
communicate over TCP/IP networks.
. Interface Description Language (IDL) is used to specify the interface
between the client ORB and the server ORB.
. Business objects are what the applications developers create to
encompass data related to business operations such as inventory and
sales information. OMG defines business objects as high-level
representations of things that exist in a business domain.
In the other object technology development arena, Microsoft has released its
DCOM (Distributed Component Object Model) architecture, based on which
services to build distributed applications can be developed within the Windows
environment. In brief, DCOM is an architecture that enables components
(processes) to communicate across a network in a distributed way. This
architecture includes two types of services, one is to be provided at runtime and
IJPDLM the other is to be used to develop distributed applications. DCOM provides
30,7/8 distributed messaging services, object request broker services, distributed
transaction services, and data connectivity services all layered over its own
remote processing control (RPC) mechanism (Rock-Evans, 1998).
The main advantages of the DCOM are:
. DCOM is able to facilitate a robust transaction processing which can be
604
accomplished through Microsoft's transaction server which runs on
Windows NT platform.
. DCOM is claimed by Microsoft ``free'' with Windows NT to be, though
the cost of DCOM is ``implicitly'' included in the Windows NT.
Nevertheless, it is comparatively cheaper than other similar products.
. Some of the built-in capabilities of DCOM are well thought out and able
to work favorably with other middleware products such as Microsoft
Message Queue Server (MSMQ).
. The wide customer base of Microsoft products is favorable for the
growing acceptance of DCOM in the object technology market, which
may be further accelerated by the potential support of third-party
developers.
DCOM services are tightly associated with the Windows NT platform. Though
Microsoft has extended the support of DCOM to other operating system, such
as Unix, by cooperating with third-party companies, it is impossible to
implement all the DCOM functions on other platforms because of their inherent
differences. For heavy users of Unix and the mainframe or other non-Windows
platforms, the Distributed Computer Environment (DCE) protocol may be the
better alternative. Figure 2 shows the DCOM services and infrastructure.
The purpose of using distributed object technology (CORBA and DCOM) is
to ensure interoperability between applications on different machines in a
heterogeneous distributed environment. This technology can simplify the
communication between the heterogeneous objects and each business object of
the supply chain and can remain unique with shared data and logic elements.
This approach is able to improve the manageability of the company (more
effective information handling on business activities and relationships) and
enhance the speed on application development via better communication
between functional departments. In brief, distributed object technology is
characterized by its provision of a transparent information communication
platform. This feature allows a wide range of organizations within the supply
chain to have transparent access to information and data. In effect, the
boundaries between applications disappear and each object in an enterprise-
wide environment can locate any other object without having to know where
the object is located. Once this distributed platform is established, a company
can change any one application without having to worry that any other
application will be affected (Harmon and Morrissey, 1996).
 Responsive
supply chain

605

Figure 2.
DCOM services and
infrastructure

In this research, the proposed infrastructure of the supply chain information

system embraces the DCOM architecture primarily based on two reasons ± the
third-party support for this architecture is growing due to the wide Windows
customer base and the cost of investment for companies is relatively low
(bundled with Windows NT). With the support of the object technology
features of DCOM including inheritance, encapsulation and polymorphism, the
proposed system becomes more responsive due to easier access and reuse of
information over the network. The proposed infrastructure of the responsive
supply chain information system is shown in Figure 3. The supply chain
partners exchange information with the main company based on three

Figure 3.
Infrastructure of the
proposed supply chain
information system
IJPDLM approaches. The first is through the DCOM directly; the second is through
30,7/8 Internet browser with HTTP protocol; and the third is through the MS Smart
Card Operating System (MS SCOS) that we will discuss later.

The business objects of the supply chain

As the customers' demands shift quickly and the business complexity
606 increases, there is an adverse impact on requirements interpretation, delivery
cycle time, flexibility, and cost. The challenge is to provide rapid
implementation of accurately specified business requirements which can be
achieved through the utilization of the concept of ``componentization'' which
may be achieved through business objects as self-contained and independently
developed application components that can be used in different combinations.
The business objects include any group of related data used in business
processes such as workflow, document processing, task scheduling, etc.
Different enterprises may run various sectors of business and subsequently the
physical supply chains are also dissimilar. In this respect, various business
objects should be built in accordance with the dissimilar work natures. With
the help of object technology, all kinds of supply chain activities can be
represented as objects and incorporated into the supply chain information
system.

Smart card application in the supply chain information system

Businessmen can do their global transactions at any place just with a smart
card, which is a piece of card with the capability of reading and writing data
through a card reader connected to a computer. An innovative supply chain
management enables the global production of a commodity by customizing the
value chain and optimizing each step to meet the customer's needs best. In
supply chain management, the focus is related to the managing of suppliers as
well as the flow of parts. Smart card technology provides the optimum
coordination among the partners and monitoring of the parts flow.
Smart card contains one or more electronic chips and looks like a regular
credit card but can store information and perform functions, such as matching
digital signatures for security purposes or storing value that can be used for
purchases. MS Smart Card Operating System (a built-in feature for Windows
2000) is especially designed to work with the processing power of smart cards.
Users will be able to configure their own smart card operating system and
create applications using the power and familiarity of Visual C++ 6.0 and
Visual Basic 6.0.
The smart card will link with the MS SCOS to ensure that data interchange
between the card and the computer can be achieved in an effective way. The
advantages include:
. Ensuring that the supply chain is running in compliance with the plan.
. Accessing the required information in an easy and fast way and suitable
for those who may be computer illiterate.
 . Ensuring the smooth flow of parts from one place to the other. Responsive
. Financial transaction can also be done by means of the card once a task supply chain
is finished.
As shown in Figure 4, the MS SCOS is used to assist the supply chain partners
to have a more secure and effective way to access the global supply chain. The
card can read and write data by the smart card reader/writer. In brief, the smart 607
card can be considered as a portable card with a ``brain'' inside, offers the ability
to store accurate and confidential information, such as personnel identity,
project status and product requirements, which can be retrieved on a global
basis. In general, one of the concerns of a distributed information platform in
supply chain management is the security of data access. This issue can be
tackled by the deployment of smart card technology in the production network.
As some information to be accessed by supply chain partners can be restricted,
smart card can provide security checks to ensure that the right information is
being accessed by the right person. This proposed system is developed on the
Windows platform using ActiveX which is written in Visual Basic to build the
system logic and front-end. The back-end is supported by the Windows NT
server and all the related data are stored and managed by the server running on
the Windows NT server.
Using Microsoft Studio's Visual Basic 6.0, components of the supply chain
can be created, and with Visual InterDev 6.0, Web-based application can also
be created, taking these components as middle-tier business objects (Van
Hoozer, 1998).

Figure 4.
Creation of DCOM
objects
IJPDLM Discussion
30,7/8 At the present stage, a prototype based on the proposed infrastructure is under
development with the support of software developers and a smart card
company. Three phases for implementation have been identified including:
(1) formulation of an infrastructural framework of the supply chain
608 network;
(2) development and testing of the prototype in an emulated industrial
environment; and
(3) refinement of prototype and trial run in an actual production situation.
More funding grants to support this project are being pursued from various
sources.
In summary, there are two technologies appropriate for the design and
implementation of the proposed responsive infrastructure for supply chain
information system including DCOM and CORBA. Though the prototype
under development is based on the Microsoft technology (DCOM), practitioners
in this area are recommended to consider other options carefully such as the
CORBA technology. Decisions have to be made in line with the distinct
business nature and environments of individual enterprises.
In reality, both architectures (DCOM and CORBA) offer the developer
similar features and benefits. They both provide a distinct data distribution
mechanism, employing network and location transparency, marshalling
mechanisms, etc., and both expose functionality through language-independent
interfaces. They are reliable distributed platforms on which large-scale
distributed applications can be built. Such distributed information systems are
increasingly being incorporated into the Web and turning the Web into a true
distributed system. Through the Web, corporate information is able to be
displayed in a well-presented, easily understandable and easily updateable
way. In other words the Web provides a less expensive medium for
organizations, especially for the SMEs, to communicate, to gather information
and to spread awareness about the work they do. In general, the choice relies
entirely on the distinct requirements and considerations of the companies.
Finally, the emergence of smart card technology and the support of large
software firms such as Microsoft may further enhance the responsiveness of a
supply chain network as suppliers and business partners can interchange
information in a more diverse way. Due to the smart card's ability to store
memory within the card itself, a number of automation processes, such as
credit and security check, may be embedded, thus shortening communication
time between supply chain partners. This area deserves to have more attention
for research and, perhaps, this will be the final jigsaw that is required towards
the development of an ideal communication between customers and
organizations.
Conclusion Responsive
This paper proposes an infrastructure of a supply chain information system supply chain
which capitalizes on the latest advances in object technology related to
distributed digital environment, thereby enhancing the responsiveness of the
supply chain network. The proposed system enables efficient data exchange
among various data objects which may reside in distributed platforms over
geographically isolated regions. 609
For the implementation of the proposed infrastructure, companies should
take a look at the entire chain and identify areas for revolutionary or
evolutionary change. The distributed object technology developed by
Microsoft's DCOM and OMG's CORBA are discussed with dissimilar features
highlighted so that readers can consider the merits and demerits of these two
architectures prior to making a decision. The significance of contribution of
this research is concerned with the provision of insights in the design of the
infrastructure for building a supply chain network which allows easy sharing
of data in distributed platforms. This proposed infrastructure is favorable to
the enrichment of responsiveness and flexibility into the supply chain network
using the latest distributed object technology and is expected to influence the
design of the future supply chain information system to be deployed
particularly in the manufacturing areas.

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