The impact of a real-time IT-Logistics solution : Implementation effects and consequences

Abstract: Today’s business market is highly competitive, therefore companies need to be constantly updated and change the way they operate their business, in order to survive and remain competitive. The situation on today’s market requires that companies have the ability to quickly respond to market changes and new customer demands within short product lifecycles. In order to deal with this new market situation, companies need to improve the integration with other companies within their business. This integration facilitates the companies’ ability to quickly adapt to new market situations and survive on a fast changing market. One of the main underlying concepts of this collaborative commerce is Supply Chain Management (SCM) which integrates and coordinates a company’s processes both internally and externally. Information Technology (IT) could improve the effectiveness of SCM. IT-solutions make the business processes more effective and improves the integration with other actors within the supply chain. The purpose with this thesis is to describe and explain the effects for businesses and the consequences for its processes when implementing a real-time IT-Logistics solution together with identifying the critical success factors. The thesis has been conducted by studying theory regarding supply chain management, business renewal and implementation effects. Further, a case study has been conducted where three actors have been interviewed; a manufacturer (Volvo Powertrain), a subcontractor (Metallfabriken Ljunghäll AB) and a system developer (PipeChain). The analysis of the theoretical framework and the empirical research has contributed with an identification of major effects and consequences when implementing a real-time IT-Logistics solution. Some of the effects are: inventory reduction, higher delivery accuracy, improved relations and increased flexibility. Examples of consequences these effects have caused are: more accurate planning and production, effective production processes as well as an improved delivery process. Additionally, success factors for an implementation have been identified such as mutual trust, understanding of change and evaluation.