Smart supply chain management: a review and implications for future research

• DOI: https://doi.org/10.1108/IJLM-02-2014-0035
• Published date: 08 August 2016
• Date: 08 August 2016
• Pages: 395-417
• Author: Lifang Wu,Xiaohang Yue,Alan Jin,David C. Yen
• Subject Matter: Management science & operations,Logistics

Smart supply chain management:

a review and implications

for future research

Lifang Wu

Williams College of Business, Xavier University, Cincinnati, Ohio, USA

Xiaohang Yue

Sheldon B. Lubar School of Business, University of Wisconsin-Milwaukee,

Milwaukee, Wisconsin, USA

Alan Jin

Department of Management, Williams College of Business, Xavier University,

Cincinnati, Ohio, USA, and

David C. Yen

SUNY College at Oneonta, Oneonta, New York, USA

Abstract

Purpose –As traditional supply chains are increasingly becoming intelligent with more objects

embedded with sensors and better communication, intelligent decision making and automation

capabilities, the new smart supply chain presents unprecedented opportunities for achieving cost

reduction and enhancing efficiency improvement. The purpose of this paper is to study and explore the

currents status and remaining issues of smart supply chain management.

Design/methodology/approach –A literature review is conducted to synthesize the earlier work in

this area, and to conceptualize and discuss the smart supply chain characteristics. Further, the authors

formulate and investigate five key re search topics including informat ion management, IT

infrastructure, process automation, advanced analytics, and supply chain integration.

Findings –Studies in those aforementioned subject fields are reviewed, categorized, and analyzed

based on the review questions defined in the study. It is notable that while the topics of converging

atoms with digits are increasingly attracting attention from researchers and practitioners alike, there

are many more interesting research questions needing to be addressed.

Originality/value –The paper provides original and relevant guidance for supply chain

management researchers and practitioners on developing smart supply chains.

Keywords RFID, Supply chain management

Paper type Literature review

1. Introduction

Supply chainmanagement (SCM) speaks of “having theright item in the right quantity at

the right time at the right place for the right price in the right condition to the right

customer”(Mallik, 2010). However, due to the complexity, uncertainty, and other factors

involved, most of the real supply chains are known for having many supply-demand

mismatch problemssuch as overstocking, stockout,and delivery delays which have long

been popular research topics in the business management literature (Wong et al.,2012).

As always, cheaper,faster, and better has beenthe mantra for supply chain managers.

Meanwhile, supplychains are becoming more complex, costly,uncertain, and vulnerable.

To deal effectively with the increasing challenges, supply chains must become a lot

smarter (Butner, 2010). Taking full advantage of improvements in such areas as

semiconductor,computer science, and other engineering technologies, the new version of

The International Journal of

Logistics Management

Vol. 27 No. 2, 2016

pp. 395-417

©Emerald Group Publis hing Limited

0957-4093

DOI 10.1108/IJLM-02-2014-0035

Received 9 September 2013

Revised27February2014

3 March 2015

18 May 2015

Accepted 5 June 2015

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

395

Smart supply

chain

management

supply chain seeks to establish a large-scale intelligent infrastructure for merging data,

information, physical objects, products, and business processes together (Schuster et al.,

2007). For example, the factories equipped with smart equipment and instruments can

fulfill orders with global teams, intelligentanalytics, and dynamic systems all across the

farthest stages of the value chain (Hessman, 2013). For sure, companies that take

advantage of theseaforementioned capabilitiesstand to gain against competitors thatdo

not. No wonder there are abundant examples of smart supply chain applications in

existence, for example, smart transportation management system, and smart factory.

In the literature, a number of distinctive terms were used to describe the new

communicated globalbusiness systems to fulfill customer orders, such as e-supply chain

(Akyuz and Rehan,2009), ambient intelligence (Klochet al., 2010), Internet of Things (IoT)

(Ma, 2011), industrial internet (Evans and Annunziata, 2012), physical internet

(Montreuil, 2011), smart factory (Hessman, 2013), smartenvironment (Weiser et al., 1999),

and smarter supply chain (Butner, 2010). While e-commerce promotes transactions

performed on the traditional internet, the concept of “e-supply chain”makes one further

step to integrateprocesses across supply chain stages(Akyuz and Rehan, 2009). Further,

IoT refers to the next generation internet where connecting physical things through a

network has the capability of exchanging information about themselves and their

surroundings (Gubbi et al., 2013). These things may include artifacts,machines, products,

and gizmos (unstable, modifiable things) (Sundmaeker et al., 2010). It is evident in the

literature thatthe current IoT research focusseson technologies (such as signal,network,

communication, security) and applications (Sundmaeker et al., 2010). GE’sindustrial

internet converges global industrial systems with the power of advanced computing,

analytics, low-cost sensing, and new levels of connectivity permitted by the internet

(Evans and Annunziata, 2012). In addition, a smart environment is defined as “the

physical world that is richly and invisibly interwoven with sensors, actuators, displays,

and computational elements, embedded seamlessly in the everyday objects of our lives,

and connected through a continuous network”(Weiser et al., 1999). IBM particularly

proposes three characteristics (e.g. instrumented, interconnected, and intelligent) for the

next generation smarter supply chains (Butner, 2010).

It is evident that these aforementioned concepts such as e-supply chain, IoT, smart

factory, and industrial internet, have been used to represent larger and more

complicated business systems: from isolated RFID application to local IoT

implementation, to smart factory, and then to part of the global supply chain

network within the same company. Following this trend, we intend to define a “smart

supply chain”as the new interconnected business system which extends from isolated,

local, and single-company applications to supply chain wide systematic smart

implementations. The smart supply chain would possess most of the features we

discussed above, including technologies such as IoT, smart machines, and intelligent

infrastructure, and capabilities such as interconnectivity, fully enabling data collection

and real-time communication across all supply chain stages, intelligent decision

making, and efficient and responsive processes to better serve customers.

As the physical world itself is becoming a type of information system where sensors

and tiny devices are linked through wired and/or wireless networks, business mode ls

based on today’s largely static-information architectures face many challenges as new

ways of creating customer value arise (Bughin et al., 2010). The deep integration of the

digital world with the physical world holds the potential to bring a profound

transformation to global supply chains. However, despite the consensus on the great

potential of the smart concept and the significant progress in a number of enabling

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