A Framework For Understanding The Benefits Of Supply Chain Management Systems

Organizations invest heavily in Supply Chain Management (SCM) systems expecting benefits stated by software vendors and implementation partners. However, both academic and industry reports suggest that there are growing challenges in realizing the benefits of SCM applications, preventing the success of SCM projects. Although there exist well-publicized research on Enterprise Resource Planning systems benefits and Customer Relationship Management systems benefits, there is a dearth of research on studies evaluating SCM systems benefits from a holistic perspective. In order to better understand the benefits of SCM systems, this study proposes a SCM system benefit framework. The preliminary framework is derived from content analysis through 21 academic studies and 20 vendor success stories. This preliminary framework consists of 3 dimensions-Strategic, Managerial and Operational and 21 indicators. Subsequently, the benefits in the preliminary framework were validated in a large fast moving consumer goods (FMCG) manufacturer. The results reveal that around ninety percent of the claimed benefits from literature and vendor success stories have been confirmed. It is also noted that the unconfirmed benefits cannot be realized in a short time due to certain constrains. This validated SCM system benefit framework has substantial implications for research and practice.