Martin Smits

Performance Metrics in Supply Chain Management

This survey paper starts with a critical analysis of various performance metrics for supply chain management (SCM), used by a specific manufacturing company. Then it summarizes how economic theory treats multiple performance metrics. Actually, the paper proposes to deal with multiple metrics in SCM via the balanced scorecard — which measures customers, internal processes, innovations, and finance. To forecast how the values of these metrics will change — once a supply chain is redesigned — simulation may be used. This paper distinguishes four simulation types for SCM: (i) spreadsheet simulation, (ii) system dynamics, (iii) discrete-event simulation, and (iv) business games. These simulation types may explain the bullwhip effect, predict fill rate values, and educate and train users. Validation of simulation models requires sensitivity analysis; a statistical methodology is proposed. The paper concludes with suggestions for a possible research agenda in SCM. A list with 50 references for further study is included.

Measuring knowledge management effectiveness in communities of practice

This paper outlines an approach to determine key performance indicators and metrics for knowledge management (KM) in communities of practice. The approach is based on analysis of the KM literature on (i) types of knowledge, (ii) processes of knowledge development and social learning, and (iii) metrics for KM, such as from the intellectual capital method. To embed communities of practice and KM processes in an organizational context, we introduce our knowledge governance framework, which combines knowledge resources, KM, and organizational objectives. Our first hypothesis is that successful KM in organizations requires the linking of knowledge resources to organizational objectives. Our second hypothesis is that a precondition for successful KM is that explicit, quantitative indicators are used. We tested the framework in a small organization in the financial industry. According to our first case experience, the model can be applied in a business setting and our first hypothesis is supported: successful KM links knowledge resources to company objectives. Our second hypothesis is not supported: KM in the case is not based on explicit and quantitative indicators.

Assessment of information strategies in insurance companies in the Netherlands

Abstract This paper describes the information strategies of three major insurance companies in the Netherlands. A research model was developed as an aid to describe how managers nowadays deal with information strategy. We report on the linkages between information strategies and business strategies, the roles of the stakeholders involved, and how the results are perceived. We found that in all three companies the executive board, IT management and line management are heavily involved in the information strategy process. The main focus in the three companies is on adjusting IT to business goals and processes, with only some attention directed towards creating a competitive advantage with IT. With respect to the effects of information strategy, we found that none of the three companies systematically evaluate the effects of information strategies on an organizational or a business process level. More case study research is required to look into the evolutionary changes of information strategies within organizations, and the effects of information strategies on the business processes and the use of IT over time.

SME-based collaborative supply chain management: the impact of information technologies

The study aims to provide insight on how Small-and-Medium sized Enterprises (SMEs) adjust Supply Chain Management (SCM) in response to the introduction of Information Systems (ISs). An analysis of a three-tier, SME-based Supply Chain (SC) in the Taiwanese nylon fibre market is conducted. Based on this case study, a schema of IT-enabled collaborative SCM of SMEs is built. From the findings, ISs, information sharing, and performance metrics do facilitate implementation of business strategies, leading to synchronised SC operations and improved performance. In contrast, shared SC performance measures and SC-wide IT planning and strategy are not critical successful factors for SME-based collaborative SCM. As well, although it is argued, that advanced Inter-Organisational Systems (IOSs) are essential for SCM, they are found to be unnecessary for performance improvement in this studied SC. Finally, we find no support for the e-market hypothesis in this textile industry market structure.

The practice of information strategy in six information intensive organizations in the Netherlands

The aim of this research is to understand how and why business organizations in the past few years shaped their information strategies and to generalize these observations. To support the data collection in organizations, a research model was used, dividing information strategy into four aspects: environment, process, content and effects. The experiences of three insurance companies and three document processors are described with the help of the model, resulting in six case descriptions of the information strategy practices in these companies over the past five years. We found changes in the information strategies over the period studied, as well as differences between the organizations. Based on the case studies, we propose a phase model of information strategies: during each phase, a period of one to several years, a company shows a specific approach towards information strategy. All six organisations that we studied showed a change of phase in the past five years. We distinguish five phases: turbulence, orientation, consolidation, exploitation, tension. The phases are characterized by means of the aspects of the information strategy model and the six cases are fitted onto the typology. The typology can be used to determine the current position of an organization with respect to information systems planning, and the possibilities to improve or change it.

Using Dempster-Shafer theory and real options theory to assess competing strategies for implementing IT infrastructures: A case study

This paper discusses the selection of a preferred strategy for implementing an IT infrastructure from a range of competing alternatives. The model presented here combines the use of an evidential reasoning approach based on the Dempster-Shafer theory of belief functions with real options analysis. We discuss the combined use of both theories and show that combining the Dempster-Shafer theory with real options analysis provides flexible support that takes account of the multi-dimensional nature of implementation decisions. We also go into the fundamental requirements that need to be met when selecting a strategy for implementing an IT infrastructure. We conclude by outlining a number of the models limitations.

Impact of Electronic Auctions on Health Care Markets

Electronic auctions can be applied in certain markets, but the effects on market structure, market behaviour and market performance are unclear. We analysed the effects of a reverse electronic auction initiative, implemented by a new intermediary (CareAuction.nl), on the market for maternity care in the Netherlands in 2005 and 2006. After an unsuccessful start in 2004 as cybermediary in the care market between patients and care providers, CareAuction successfully moved in March 2005 to the care contracting market between insurance companies and care providers. We report on the effects of CareAuction on market performance (price of maternity care minus 2-4%), market structure (more care providers involved in the bidding processes) and market behaviour (bidding behaviours and user preferences). We conclude that IT and cybermediation result in the evolution of electronic markets, influenced by complex interactions among market structure, market conduct and market performance.

Impact of policy and process design on the performance of intake and treatment processes in mental health care: a system dynamics case study

For most of its history, medical care has been a customized process. Because customized processes might not lead to optimal performance, health-care managers are considering business process redesign, implementation of standardized (brief) therapies, stepped care, and policy changes to solve supply chain management issues. We develop a system dynamics model to support the management of intake and treatment processes in mental health care. We first model the existing situation in the care unit (Base Scenario of customized care) and simulate the impact of policy changes (assigning scarce personnel resources to different care activities) and redesign of intake and treatment processes (implementing brief therapies and stepped care). We show that shifting personnel resources between intake and treatment activities does not substantially improve performance. We found better results of process redesign and stepped care (+42% client intake rate and +18% revenues per day).

Exploring ICT enabled networking in hospital organisations

The paper describes an exploratory study of new organisational forms in hospitals. The study focuses on ICT-enabled networking in hospital organisations. Two Dutch hospitals (one general and one categorical) and a German hospital (university) were analysed. Hospitals develop through different levels of networking and phases of organisational focus. Strategic drivers and incentives are improvement of efficiency and effectiveness of the primary care process. Enabling conditions are a clear hospital strategy and an open and flexible hospital information system that supports network transactions and processes. The design and functioning of the network is conditioned by: (a) the not-for-profit market, (b) the organisational focus, and (c) the involvement of internal and external stakeholders. The measurability of performance increases as the organisational focus evolves. More research is called for to understand the complexity and dynamics of hospital network organisations.

The Tacit Liaison between Networkability and Supply Chain Performance

Adjusting the level of supply chain integration is a key instrument for managers to improve supply chain performance. Tightly integrated supply chains, shortly integrated supply chains, are typified by intensified cooperation between organizations and by the existence of a so-called business bus, being the supply chain wide IT-backbone for business processes and transactions. It is generally believed that this type of supply chains can be highly efficient, leading to a relatively high performance. The level of integration is closely related to that of networkability, which refers to the ability of an organization to become and stay a partner in an existing supply chain. In literature, a higher level of networkability is implicitly regarded as desirable, to improve the performance of a supply chain. To clarify the relationship between networkability, supply chain integration and supply chain performance, we have assessed these notions in an SME based supply chain in the high tech manufacturing industry. We found some preliminary evidence that supply chain performance can be comparatively high, without high levels of networkability at the level of IT (e.g., a business bus), as long as it is compensated by networkability of process, products, people and/or organization.