Industry 4.0 Research: Information and Communication Technology Capability Index for Supply Chain Management

ABSTRACT

Purpose—The objective of this paper is to suggest methods to compute an effective Information and Communication Technology (ICT), Capability Index for Supply Chain Management (SCM) as part of assessment framework on ICT impact on SCM. The other part of this assessment framework is an empirical model based on SCOR level I performance indicators. This framework can be seamlessly dovetailed into the universally accepted and popular APICS Supply Chain Operations Reference (SCOR) model as its constructs are based on SCOR. The assessment framework will be a welcome addition to the Industry 4.0 research underway. Design/methodology/approach—Survey questionnaire was administered and collected from 200 + SCM professionals in sectors such as manufacturing, services, MSMEs, international companies as well as SCM/ERP professionals working as domain experts in IT and service companies. Snowball sampling was primarily used with the support of various industrial associations and professional body chapters. This questionnaire combines quantitative and qualitative inputs with adequate provision for open-ended questions with user input as a means of eliciting case interviews. After Confirmatory Factor Analysis (CFA) using SEM was employed to validate the empirical model, its performance indicators are ranked using AHP and the weights are ascertained. Computing the ICT Capability Index for SCM from the metrics of the assessment model is done using tools such as Balanced Scorecard (BSC) and Snorm De Boer standardized normalization (SNORM) method. Findings—An ICT capability index for SCM is computed based on user input with respect to the impact of ICT on the supply chain performance indicator as part of this framework using the methods of BSC & SNORM. 2 industry case studies are used for the computation and analysis of this index. Research limitations/implications—Discussion with an enterprise is needed to take input on the impact of ICT on each supply chain performance indicator in our calculation for the index. This investigation considers ICT deployment as the variable which encompasses the entire gamut of ICT tools and technologies. There could be different granular approaches to ICT as a variable. A scoring system, scale, and rubric are proposed to be evolved based on multiple case studies of various enterprises as an extension to this research work. There is tremendous scope to extend the investigation into SCOR level II metrics which are diagnostics of strategic metrics and level III metrics which are context or sector-specific and also considering various geographies. Originality/value–The managerial implications of this ICT Capability Index for SCM assumes greater significance as a result of the present situation due to Covid-19 pandemic, which has accelerated the need for Industry 4.0, digitalization and embracing of ICT not only for supply chain but also all aspects of the enterprise. There is also an identified lacuna in terms of performance scoring and assessment framework with respect to impact of ICT in SCM. The advantages of this index are that it is universal and can be used by any enterprise irrespective of the geography or country, vertical or domain, manufacturing or services. This index will provide insights to enterprises on their ICT capabilities and help them to further leverage ICT so as to adapt their organizations, digitize their operations and also benchmark with their peers and competitors. A scoring system and rubric is proposed to be evolved based on multiple case studies of various enterprises as an extension to this research work. © 2022, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.