Collaborative supply chain management has been studied widely in recent
years due to its ability to improve the performance of supply chain such
as reduced inventories, increase inventory turns, reduce cost and improvement
in customer services (Chong and Ooi, 2008). Collaboration is defined as working together. Collaboration is described
by Soosay et al. (2008) as an inter-organisational relationship
type in which the supply chain partners agree to invest resources, mutually
achieve goals and share information. As stated by Barratt (2004), many
researches when talking about collaboration cite mutuality of benefit,
rewards and risk sharing together with the exchange of information as
the foundation of the collaboration (Barratt, 2004). Simatupang et
al. (2004) defined supply chain collaboration as two or more independent
firms jointly working to align their supply chain processes so as to create
value to end customers and stakeholders with greater success than acting
alone (Simatupang et al., 2004).
Examples of collaboration in the supply chain has started as early as
the 1980s. Large organizations such as Wal Mart and Proctor and Gamble
were able to replace the early arm`s length relations with durable arm`s
length relations and strategic partnerships (Skjoet-Larsen et al.,
2003; Hoyt and Huq, 2000; Holmstrom et al., 2002). In today`s business,
many companies have worked closely with their suppliers include Dell,
IBM and Hewlett Packard.
The successful deployment of IT technologies may help organizations to
achieve logistics success (Lai et al., 2004). Past IT technologies
that were applied to supply chain include Electronic Data Interchange
(EDI) and Enterprise Resource Planning (ERP) (Van Donk, 2008), With the
advancement in IT technologies, in particular internet technologies, many
companies are employing IT technologies in the implementation of collaborative
supply chain management. The potential of IT applications for a collaborative
supply chain is summarized by Handfield and Nichols (1999) as cited in
“With the emergence of the personal computer, optical fiber networks,
the explosion of the Internet and the World wide web, the cost and availability
of information resources allow easy linkages and eliminates information
related time delays in any supply chain network (Handfield and
Nichols, 1999, p.6).
IT technologies such as EDI and E-Commerce have been applied in a collaborative
supply chain environment. However, with the emergence of web technologies
such as Extensible Markup Language (XML) and Web Services, increasingly
organizations are moving from implementing E-Commerce towards terms such
as e-collaboration or Collaborative Commerce (C-Commerce) to the collaborative
supply chain management.
Gartner group in 1999 defined C-Commerce as the set of electronically-enabled
collaborative interactions between an enterprise, its suppliers, trading
partners, customers and employees and also leverages the Web to create
and maintain an interactive business community of employees, trading partners,
suppliers and customers. All of these definitions essentially address
the similar attributes of e-collaboration and C-Commerce. In this research,
in order to avoid the confusion of using inconsistent terms, the term
C-Commerce will be used to represent e-Collaboration.
The Malaysian Electrical and Electronic (E and E) industry is the number
one contributor to Malaysian`s industrial development in terms of output,
foreign exchange earnings, employment and support activities, (Hobday,
1996). However, the Malaysian E and E industry is increasingly facing
competition from countries with lower cost and huge domestic potential
such as China (Chong and Ooi, 2008). Companies thus are realizing that
globalization has made the world much more competitive. As Lai et al.
(2006) indicated, a good logistics system will be able to increase
a country`s competitiveness. The question is however, to what extent are
Malaysian E and E using C-Commerce? There has been no research in the
past to address this question. The Malaysian managers who are gathering
information before making a decision about what C-Commerce tools to adopt
and how to use these tools to their fullest degree, need to know what
others in the industry are doing. Besides needing to know what are the
organization`s competition is doing, it is also important to know what
its partners and potential partners are doing. Therefore, this research
attempts to provide the current adoption status of C-Commerce in the Malaysian
E and E industry.
The research question of this study is thus to investigate the current
status of C-Commerce adoption among Malaysian E and E organizations. The
study will then provide information concerning the data used in the study,
including descriptive information on the sample drawn out of Malaysian
E and E companies as population. Finally, the results in terms of the
current adoption status of C-Commerce are discussed followed by limitations
of the study, conclusions and implications and recommendations for future
Theoretical base review: E-Commerce covers the buying and selling
of products and services online. However, unlike E-Commerce, C-Commerce
covers exchanges of information and ideas between trading partners and
within the organizations and enable them to collaboratively design, develop,
build and manage products through their life cycle. It also allows companies
to automate information flows within a multi-channel distribution network.
In order to decide the types of C-Commerce tools that can be used in
this research, it is important to determine what types of collaborations
can exist in the supply chain. Some common ways of collaboration include
Information Exchanges (Lee et al., 2004) and collaborative planning
(Kulp et al., 2004). Information exchanges postulates that information
sharing on inventory level will reduce upstream demand distortion. Kulp
et al. (2004) mentioned collaborative planning between manufacturers
and retailers such as coordinating the design, development and introduction
of new products and services can affect manufacturer performance in various
ways. Firstly, as retailers are closer to product end users, their knowledge
on consumer preferences, existing products problems and desired features
or services complement the manufacturers` knowledge. This will in return
result in products and service that are greater value to customers and
will be consequently be associated with higher wholesale prices. Secondly,
by actively involving retailers in the design and development phase, there
is a higher commitment by the retailers for the success of the new products
and services (Kulp et al., 2004).
Matopoulos et al. (2007) stated that some supply chain activities
where collaboration can take place include:
||Product design and new product development
One of the most well known forms of collaboration in the supply chain
is known as collaborative resource planning, forecasting and replenishment
(CPFR). CPFR as cited in Danese (2007) is concern with the collaboration
where two or more supply chain partners jointly plan a number of promotional
activities and work out synchronised forecasts, on the basis of which
the production and replenishment processes are determined. A well developed
CPFR according to Skjoett-Larsen et al. (2003) is where the collaboration
has been expanded to coordinate processes within forecasting, replenishment
and planning. The planning processes can be additionally decomposed to
involve collaboration on production planning, product development, transport
planning and marketing activities.
During frequent meetings, all the relevant business processes are also
coordinated on based on joint objectives. The joint objectives focused
on developing a certain group of products, even though the respective
supply chain members may have different but complementary goals (Skjoett-Larsen
et al., 2003).
According to Skjoett-Larsen et al. (2003), a well developed and
advanced CPFR is capable of dealing with information concerning:
||New product introduction information
||POS data and forecast
||Production and capacity plan
Therefore, it is possible to conclude from Skjoett-Larsen et al.
(2003) that collaboration in the supply chain can include the sharing
of information related to the information listed earlier.
Classifying C-Commerce tools: Mclaren el al. (2002) clarified
c-commerce systems into three major groups:
||Message-based systems that transmit information to partner
applications using technologies such as XML messages.
||Electronic procurement hubs, portals, or marketplaces that facilitate
purchasing of goods or services from electronic catalogues, tenders,
||Shared collaborative systems that include collaborative planning,
forecasting and replenishment (CPFR) capabilities in addition to electronic
Cassivi (2004) discuss about the types of C-commerce tools there are
available for collaborative supply chain. The study was conducted using
the telecommunication industry. Using 7 main companies to form a case
study and through a survey of 130 firms which are the supply chain partners
of the 7 companies, Cassivi managed to classify the types of C-Commerce
tools which are used for collaboration in the supply chain. The tools
classified are direct procurement tool, replenish tool, projected shortage
tools, delivery and tracking tool, business strategy tool, capacity planning tool and forecasting tool.
||Definitions of C-Commerce tools (Source: Cassivi, 2004)
Although the study is conducted in the telecommunications industry, the tools identified can be generalized
and applied to other industries as well (Cassivi, 2004). The C-Commerce
tools will be adapted based on Cassivi`s definition of supply chain e-collaboration
tools as shown in the Table 1.
The tools used by Cassivi represent C-commerce tools used in both supply
chain execution as well as supply chain planning. As Cassivi`s study provided
a comprehensive lists of C-Commerce tools in the supply chain, C-Commerce
technologies in this study will be adapted and categorized based on the
tools and technologies used. The C-Commerce tools listed by Cassivi are
also consistent with the types of collaborations that can exist in the
supply chain based on CPFR model (Skjoett-Larsen et al., 2003).
Two C-Commerce tools that are added to Cassivi`s lists of C-Commerce tools
are RosettaNet standards and E-Hub.
MATERIALS AND METHODS
Background: A survey instrument was developed to collect the data.
Means, frequency, standard deviation and percentage were used to investigate
the current status of C-Commerce adoption in the Malaysian E and E industry.
Sampling and data collection: The target populations of this study
are E and E companies in Malaysia. A stratified sample was drawn from
the database of Federation of Malaysian Manufacturer (FMM) 2007 listed
members of E and E manufacturing companies in Malaysia. The Federation
of Malaysian Manufacturers (FMM) is established in 1968 and represents
over 2,000 manufacturing and industrial service companies of varying sizes
in Malaysia. As the FMM directory consists of manufacturing companies
of various sizes based on their revenue and employee size as well as having
companies which are local, joint venture and MNCs, it is viewed as a valid
representation of the entire Malaysian E and E organizations in Malaysia.
The survey was administered to 400 managers and executives from the purchasing
or IT departments of the FMM listed organizations. The mail survey was
the main form of data collection. There were 120 responses received, indicating
an estimated response rate of 30%. However, only 109 of the questionnaires
Measurement of adoption level: The adoption level was measured
using 5 items modified from the use of assimilation level from Fichman
and Kemerer`s work with software process innovations (Fichman and Kemerer,
1997) The adoption level here is measured using the items from whether
the organization has actually 1 = deployed, 2 = committed, 3 = shown an
interest, 4 = aware and 5 = unaware of the C-Commerce tools given.
Besides using Cassivi`s literature to develop the C-Commerce tools used
in this study, this research also added new tools based on the recommendations
of senior executives from two major E and E companies in Malaysia. The
10 C-Commerce tools used in this study are direct procurement tools, replenishment
tools, projected shortages tools, delivery and tracking tools, design
tools, Supply chain Planning and Forecasting tool, Capacity planning tool,
Rosetta Net standards, E-Hub and Business Strategy tool as shown in Table
1. All the adoption level questions on the C-Commerce tools added
together bring the total points to 50. The mean is calculated giving a
maximum mean score of 5 which signify a high adoption level of C-Commerce
tools while a minimum mean score of 1 signify a low adoption level of
Profile of organizations: This research collected responses from
109 E and E firms in Malaysia. Twenty seven of these companies have annual
turnover of less than RM 10 million, 45 between RM 10 million and RM 25
million and 36 more than RM 35 million.
||Annual turnovers of organizations
||No. of years organizations have been operating
||Types of organization
According to Small and Medium
Industries Development Corporation (SMIDEC) of Malaysia in 2007, small organizations are organizations that
have less than Rm 10 million annual turnover or have 50 or less employees,
middle size organizations have between RM 10 million to 25 annual turnover
or have employees of between 51 and 150, while large organization are
organization which have annual turnover of more than Rm 25 million or
more than 150 employees.
As shown in Table 2, most of these organizations are
medium size to large organization based on their annual turnovers as 75.2%
of the organizations have more than RM 10 million annual turnovers.
Table 3 shows that 84 organizations who took part in
the survey have more than 10 years of operation while 25 have less than
10 years. As shown in Table 4, 53 of the responding organizations
are local E and E company, while 38 of them are multinational E and E
organization in Malaysia, while 18 of them are joint venture between local
Malaysian E and E company and overseas organization.
Current status of C-Commerce adoption among Malaysian E and E companies:
The research question is to find out the current status of C-Commerce
implementation among Malaysia E and E companies. Therefore, it is important
to see the adoption level for each of the C-Commerce tool. Table
5 show the adoption level for each of the ten C-Commerce tools used
in this study as well as the adoption level based on organization size.
Direct procurement tool: As shown in Table 5,
most E and E organizations have deployed (n = 30) the direct procurement
tool which is a tool used for supply chain execution (Cassivi, 2004).
The results show that Malaysian E and E organizations are do know about
this tool and many of them have deployed and are interested (n = 23) in
implementing the tool. 18 companies which have taken part in the survey
have also stated that they have committed to implement the technology
in the near future.
||Summary of C-Commerce tools status
Projected shortages tool: Based on Table 5, most
organizations are aware of the projected shortage tool (n = 32). However,
in terms of actual deployment, there were only 25 organizations which
have actually deployed the tool. Only 6 organizations from the survey
stated that they are unaware of such tool.
Replenishment tool: Most of the E and E organizations in Malaysia
are aware (n = 39) of the replenishment tool as shown in Table
5. From the survey, replenishment tool is the second most deployed
tool among Malaysian E and E behind the direct procurement tool. Although
the awareness of the tool is high, it also means that these organizations
are not interested in deploying the tool. The organizations that are interested
(n = 16) in the replenishment tool and committed (n = 21) to deploy the
tool in the near future are relatively lower when compared to organizations
who are aware of the tool but not going to deploy it in the near future.
From the survey, most organizations have heard of replenishment tools
with only 7 organizations claiming not to know about the tool.
Delivery and tracking tool: Table 5 shows that
the awareness of the delivery and tracking tool is the highest with 36
organizations being aware of the technology, but are not interested or
committed in deploying the technology. However, many organizations have
committed to deploy the tool (n = 29) in the near future with 20 organizations
having already deployed delivery and tracking tool. Relatively low number
of organizations are unaware with the existence of delivery and tracking
tool (n = 4).
Supply Chain planning and forecasting tool: The awareness, interest,
commitment and deployment of supply chain planning and forecasting tool
among Malaysian E and E are quite close as shown in Table
5, although, there are a number of organizations who are aware (n
= 28) of the technology, it also means that these organizations have no
interest nor committed to deploy the tool. Supply chain planning and forecasting
tool is also one of the highest deployed tool with 25 organizations having
already deployed the tool.
E-Hub, E-Marketplace and E-Exchange: Table 5
shows that E-Hub, E-Marketplace and E-Exchanges tools have relatively
low deployment among Malaysian E and E organizations when compared to
the previous tools described. As shown in Table 5, only
16 organizations have deployed E-Hub, E-Marketplace and E-Exchanges in
their supply chain. However, many organizations have expressed interest
(n = 34) and are committed (n = 27) to deploy the tool in the near future.
Only 7 organizations are not aware of the existence of such tool showing
that organizations are aware of such tool, but are unwilling to deploy
Capacity planning tool: Table 5 shows that similar
to E-Hub, E-Marketplace and E-Exchanges, the deployment of capacity planning
tool is relatively low given that only 14 organizations from the survey
have actually deployed the tool. There are however, a number of organizations
which have expressed an interest (n = 31) and committed (n = 20) to the
deployment of capacity planning tool. As such, in the long term, the deployment
of capacity planning tool can be improved. Similar to the previous tools
described, the unawareness of capacity planning tool is relatively low
given that only 7 organizations are unaware of the tool.
RosettaNet standards: Based on Table 5, the degree
of using RosettaNet standards is quite low. It is the 3rd lowest deployed
C-Commerce tool with 13 organizations having deployed it. Organizations
that are committed to deploy RosettaNet standards is also relatively new
as only 13 organizations have expressed that they have committed to the
deployment of RosettaNet standards in the future. Despite the fact that
Malaysian government have been promoting RosettaNet standards through
various government promotions and incentives, many Malaysian E and E are
still unaware of the tool (n = 22).
Design tool: As shown in Table 5, the deployment
for the design tool is the second lowest among the 10 C-Commerce tools
described. Only 7 organizations have actually deployed design tool. Seventeen
organizations are unaware of such C-Commerce tool, which is the 3rd highest
of unawareness among the C-Commerce tool. However, 34 organizations have
expressed an interest in deploying design tool in the future while 16
organizations have actually committed towards the deployment of design
tool in the near future.
Business strategy tool: The deployment of the business strategy
tool is the lowest (n = 3) among the Malaysian E and E organizations as
shown in Table 5. There are also 25 organizations which
are unaware of the business strategy tool. Forty one organizations are
aware of the tool but are not interested or committed to deploy the tool
in the near future. Overall, business strategy tool has the lowest deployment
and highest unawareness among E and E organizations in Malaysia.
Overall, based on the Table 5, direct procurement tool
has the highest number of deployment among Malaysian E and E organizations.
The organization with the lowest deployment include business strategy
tool. The tool that most organizations are unaware of includes business
strategy tool and RosettaNet standards, while delivery and tracking tool
have the lowest unawareness among Malaysian E and E organizations.
Based on the findings, Table 6 shows that the average
mean of all current C-Commerce adoption level to be at 3.01102. This show
that most organizations are still not adopting the C-Commerce tools listed,
but they are mostly interested (mean = 3.011) in the adoption of C-Commerce
tools. The tools that have the highest adoption mean is supply chain planning
and forecasting, followed by direct procurement tools, projected shortages
tool, delivery and tracking tools, replenishment tools, e-hub/e-marketplace,
capacity planning tools, RosettaNet standards, design tool and business
Overall, the deployment of C-Commerce tools among Malaysian E and E organizations
are relatively low. Based on Table 7, many organizations
are deploying C-Commerce tool in their supply chain. However, the extent
to which they were used was still limited. The C-Commerce tools with the
highest deployment in terms of percentage are 27.5%, which is quite low.
The tools that were deployed the most among Malaysian E and E companies
are direct procurement tool (27.5%). C-commerce tools that were lowly
adopted include business strategy tool (2.7%) and design tool (6.4%).
The results also show that many organizations are not aware about RosettaNet
standards (20.2%) and Business Strategy tool (22.9%). The result shows
that despite Malaysian government efforts in promoting the implementation
of Rosettanet standards, many organizations are still unaware of the tool.
Based on Table 8, most small organization have low deployment
of the C-Commerce tool. As shown in Table 8, less than
4% of the small organizations have deployed each of the C-Commerce tool
listed. Many organizations are also unaware of some of the C-Commerce
tool listed, in particular RosettaNet standards, Design tool and Business
strategy tools which have more than 40% of the small organizations being
unaware of them.
||Mean of adoption level of each C-Commerce tool
||Percentage of the utilization of C-Commerce tools among
Malaysian E and E organizations
||Percentage of the utilization of C-Commerce tools for
organizations with annual turnover of less than RM 10 million (small
||Percentage of the utilization of C-Commerce tools for
organizations with annual turnover of between RM 10 million to RM25
million (medium organizations)
Percentage of the utilization of C-Commerce tools for
organizations with annual turnover of more than RM 25 million (large
Small organizations are also less committed to deploy the C-Commerce
tools in the near future with tools such are direct procurement, replenishment,
projected shortages and design tools have 0% commitment from the small
Table 9 shows that the deployment of C-Commerce tools
among medium size organization is much higher compared to the smaller
organization. Although tools such as RosettaNet standards, Design tool
and Business Strategy tool are have low percentage of deployment and commitment
among the medium sized organization, they are still higher than the small
organization. Overall, the percentage of unawareness among the medium
sized organization is much lower in general when compared to small organizations.
However, direct procurement (10.9%), replenishment (10.9%) and E-Hub,
E-Marketplace, E-Exchanges (8.6%) do have a higher percentage of unawareness
among the medium sized organization when compared to the small organization
although overall, the deployment and commitment of these tools are still
much higher than small organization.
Table 10 shows the percentage of the utilization of
C-Commerce tools for organizations with annual turnover of more than RM
25 million. Large organizations have the highest percentage of deployment
when compared to medium sized and small sized organization. The percentage
of unawareness of the C-Commerce tools among the large organization is
low when compared to the medium and small organizations. RosettaNet standards
have the highest percentage of unawareness among the large organization
although the deployment of RosettaNet standards is high when compared
to the medium and small sized organization.
In general, the adoption level of C-Commerce tools in the Malaysian E
and E industry is still considered low with an average mean of 3.011.
Based on the tools adopted, most organizations are utilizing C-Commerce
for their supply chain execution. For example, tools such as direct procurement,
replenishments, shortages and delivery and tracking are some of the tools
which have the highest number of adoption when compared to other tools.
Among tools with lower adoption, they are mainly supply chain planning
tools such as capacity planning tool and business strategy tool.
One observation that be made from this is that most organizations are
still not willing share information that are more sensitive to their supply
chain partners such as the design of their products and well as business
strategy tools. However, in order for a collaborative SCM to be implemented
in the supply chain, it will be important that organizations start sharing
this information with their supply chain partners.
In terms of the adoption status of C-Commerce based on organization size,
the lowest number of adoption of C-Commerce tools come from smaller organizations
compared to large organizations. Although this is understandable due to
the limited resources in financial and technical resources that smaller
organizations have when compared to larger organizations, it is still
vital for these organizations to start adopting c-commerce tools. This
is because the success of c-commerce adoption requires the co-adoption
from more than one supply chain partners. Therefore, organizations with
larger resources can consider helping their smaller partners to adopt
C-commerce. This can be in the form of financial assistance as well as
This research also enables organizations to have a better understanding of
the current status of C-Commerce adoption level for SCM in the Malaysian E and
E industry. This research have addressed previous lack of study in the adoption
status of C-Commerce in the Malaysian E and E industry. This research allows
management of organizations to know what is the adoption level of E and E industry
in Malaysia. This information about other organizations` adoption level of C-Commerce
for SCM is important as SCM evolves from the integration level of firm-centric
towards the integration level of industry-centric whereby the industry standard
C-Commerce environment needs to be established and industry level SCM standards
need to be developed.
LIMITATIONS AND FUTURE WORK
This study has several limitations. One of the limitations is that this
research has been conducted in Malaysia and whether the results from this
research would be consistent with other countries` E and E industry would
need to be verified through further research. As such, there is a need
to compare the adoption level of C-commerce in Malaysian`s E and E industry
with other countries` to allow us to have a better understanding the overall
C-commerce adoption level in the E and E industry.
Given that this research showed that the C-Commerce adoption level in
the Malaysian E and E industry is not relatively high, there is a need
to further investigate what are the factors that might influence the improvement
in the adoption of C-Commerce in the Malaysian E and E industry.