Version: August 27, 2003
Impacts of Standardization on
Barchi Peleg · Hau L. Lee
Over the past few years, a growing number of organizations have shifted the focus of
their supply chain management practices from internal operations to cross-enterprise
collaboration. Through advanced information sharing and knowledge exchange practices,
companies are able to build products that better meet customer expectations and deliver
them to the marketplace at the right time and place, while simultaneously improving the
efficiency of their internal operations.
Such collaborative activities require numerous
process steps involving business-to-business information technology (IT) applications.
Having standards for these underlying business-to-business applications can have
tremendous values, since standardization enables such initiatives be repeated with the
same partner or with a more extensive set of partners easier, faster, and less costly.
While the value of business-to-business collaboration, especially when based on
standards, is no doubt significant, the efforts required for such implementation processes
are usually quite high, involving investment in IT infrastructure as well as in human
Resources are required to potentially re-engineer the business processes, train
the employees, and select and install the required IT infrastructure.
This paper discusses
the costs and benefits of cross-enterprise collaboration, as well as the added value of
We present a case study of one company that went through a large-scale
collaboration effort with one of their major customers in a joint effort to streamline the
company’s planning and replenishment processes.
We describe the benefits realized by
both business partners, as well as the challenges they faced and the efforts needed to
make this project successful.
Today’s competitive environment drives a growing number of companies to the
realization that success cannot rely solely on improving the efficiency of their internal
Rather, to gain new levels of competitiveness they must extend their focus
beyond their own four walls, and collaborate with their business partners across the
extended value chain.
Taking advantage of e-business solutions within application areas
such as customer relationship management (CRM), supply chain management (SCM),
supplier relationship management (SRM), and enterprise resource planning (ERP) can be
of great values and help companies to better prepare for and respond to changing
Consider the example of TaylorMade, which became part of Adidas-
Salomon in 1998.
The company had continued losing revenue because of its difficulty in
gauging customer demand and in optimizing its supply chain and supplier relationship.
Implementing new SCM, SRM, and CRM solutions provided the company with a more