Extranet in Development of Supply Chain

Abstract: Extranets as they have come to be termed are revolutionizing supply chains and their management. Companies and organizations with quite different internal information systems can now access data from other supply chain members. Information can be shared easily and at relatively low cost. A major benefit that flows from this greater transparency is that internal operation of the business can become more efficient as a result. This thesis studies extranet in development of supply chain from case company’s perspective. Finnsementti Oy was chosen as a case company because they had a desire to improve the operation of their supply chain by developing an extranet. Finnsementti Oy is a Finnish cement manufacturer since 1914. At the moment Finnsementti produces 85% of the cement needed in Finland. Most of company’s business is B-to-B.Finnsementti actively develops its operation and this thesis also supports that goal by aiming to improve the efficiency of Finnsementti’s supply chain which again is assumed to have a positive impact on competitive advantage and profitability. Based on a CRM study conducted in spring 2005 Finnsementti Oy decided to develop its existing rarely used customer forum into an efficient customer-oriented extranet. Finnsementti aims to improve its customer service, improve supply chain performance and make its order and delivery process more efficient. In advance extranet was assumed to enable all this. Extranet project was initiated in early fall 2005 and this study was initiated simultaneously. The starting-point of this thesis was Finnsementti’s desire to implement a supply chain improving extranet, and in order to do that, the implementation had to be successful. Due to the fact that supply chains are currently evolving towards networked e-supply chains there is quite lot of existing literature about how a supply chain performance can be improved by using electronic tools. This study concentrates on these facts, related assumption and expectations. It was also evaluated from case company’s perspective how likely these expected improvements are going to realized; is there something unexpected and additional that Finnsementti has not been able to predict? In order to find this out extranet was studied at first from literature and then from case company’s and their employee’s perspective. One of the goals of this study was to determine what is the actual condition for completing this extranet project successfully because only that can enable the realization of supply chain improvements. How to make employees and customers adopt this new extranet and so that they will start to use it actively in their daily activities? The foundation for this part of the study was the comprehensive literature review conducted on supply chain improvements. Based on that, observations and interviews, an expectations theory was built. According to this theory user’s realistic and accurate expectations make a good foundation for accepting a new information system. If the user’s expectations are fulfilled, user will perceive the new system easy to use and useful which on the other hand leads to acceptance of the system. This expectations theory can be used as a starting point for almost any information system implementation where user acceptance is considered critical.