16
International Journal of Management, IT & Engineering (ISSN: 2249-0558) CONTENTS Sr. No. TITLE & NAME OF THE AUTHOR (S) Page No. 1 Empirical and Qualitative Studies by Analyzing Requirement Issues In Global Software Development (GSD). Rabia Sultana, Fahad Jan, Ahmad Mateen and Ahmad Adnan 1-18 2 Challenges and Opportunities of Technology Transfer Management. Armin Mahmoudi 19-34 3 SMEs Competitive Advantage through Supply Chain Management Practices. Prof. Gyaneshwar Singh Kushwaha 35-50 4 Different Issue for Handling Different Cache Strategies on Usenet. Harish Rohil and Jitender Yadav 51-71 5 Power Quality enhancement in MICROGRID (Islanding Mode) by Using ND - MLI DSTATCOM. M. Manigandan, MIEEE and Dr. B. Basavaraja, SMIEEE 72-90 6 Analysis of Optical Soliton Propagation in Birefringent Fibers. R. Samba Siva Nayak, Suman. J and Naveen 91-102 7 Human Resource Accounting in IT industry (A study with reference to Infosys Technologies Limited). Dr. P. Natarajan and Bashar Nawaz 103-123 8 Solving profit based unit commitment problem using single unit dynamic programming. P.V. Rama Krishna and Dr. Sukhdeo sao 124-146 9 Achieving Optimal DoS Resistant P2P Topologies for Live Multimedia Streaming using Cost function Algorithm. A. L.Srinivasulu, S. Jaya Bhaskar, Ms. K. Deepthi and Dr. Sudarson Jena 147-162 10 Quality of Web Sites A Study On Some Standard Indian Universities. K. V. N. Prasad and Dr. A. A. Chari 163-182 11 Simulating Complex Environmental Phenomena Using Cubemap Mapping Technique. Movva. N.V. Kiran Babu, Ch. Siva Rama Krishna, M. Hanumantha Rao and V. Venu Gopal 183-203 12 Data Sharing and Querying in Peer-to-Peer Data management System. Jyoti Duhan 204-223 13 Secure File Transmission Scheme Based on Hybrid Encryption Technique. Gaurav Shrivastava 224-238 14 Investigating Flip-Flop Gates Using Interactive Technology. Mr. Amish Patel, Ms. Neha P. Chinagi and Mr. Hiren R.Raotole 239-255 15 B2B Versus B2C Direct Selling. Ankit Chadha and Er. Banita Chadha 256-270 16 Application And Implementation of Crm In Hotels of Developing Cities - A Case Study of Ranchi. Praveen Srivastava, Abhinav Kumar Shandilya and Shelly Srivastava 271-294 17 An Automatic Bacterial Colony Counter. Ms. Hemlata, Mr. Ashish Oberoi and Mr. Sumit Kaushik 295-309

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Page 1: International Journal of Management, IT & Engineering … doc/IJMIE_JAN2012/IJMRA-MIE498.pdf · International Journal of Management, IT & Engineering (ISSN: 2249-0558) CONTENTS Sr

International Journal of Management, IT & Engineering

(ISSN: 2249-0558)

CONTENTS Sr.

No. TITLE & NAME OF THE AUTHOR (S) Page

No.

1 Empirical and Qualitative Studies by Analyzing Requirement Issues In Global Software Development (GSD).

Rabia Sultana, Fahad Jan, Ahmad Mateen and Ahmad Adnan 1-18

2 Challenges and Opportunities of Technology Transfer Management.

Armin Mahmoudi 19-34

3 SMEs Competitive Advantage through Supply Chain Management Practices.

Prof. Gyaneshwar Singh Kushwaha 35-50

4 Different Issue for Handling Different Cache Strategies on Usenet.

Harish Rohil and Jitender Yadav 51-71

5 Power Quality enhancement in MICROGRID (Islanding Mode) by Using ND - MLI DSTATCOM.

M. Manigandan, MIEEE and Dr. B. Basavaraja, SMIEEE 72-90

6 Analysis of Optical Soliton Propagation in Birefringent Fibers.

R. Samba Siva Nayak, Suman. J and Naveen 91-102

7 Human Resource Accounting in IT industry (A study with reference to Infosys Technologies Limited).

Dr. P. Natarajan and Bashar Nawaz 103-123

8 Solving profit based unit commitment problem using single unit dynamic programming.

P.V. Rama Krishna and Dr. Sukhdeo sao 124-146

9 Achieving Optimal DoS Resistant P2P Topologies for Live Multimedia Streaming using Cost function

Algorithm.

A. L.Srinivasulu, S. Jaya Bhaskar, Ms. K. Deepthi and Dr. Sudarson Jena 147-162

10 Quality of Web Sites – A Study On Some Standard Indian Universities.

K. V. N. Prasad and Dr. A. A. Chari 163-182

11 Simulating Complex Environmental Phenomena Using Cubemap Mapping Technique.

Movva. N.V. Kiran Babu, Ch. Siva Rama Krishna, M. Hanumantha Rao and V. Venu Gopal 183-203

12 Data Sharing and Querying in Peer-to-Peer Data management System.

Jyoti Duhan 204-223

13 Secure File Transmission Scheme Based on Hybrid Encryption Technique.

Gaurav Shrivastava 224-238

14 Investigating Flip-Flop Gates Using Interactive Technology.

Mr. Amish Patel, Ms. Neha P. Chinagi and Mr. Hiren R.Raotole 239-255

15 B2B Versus B2C Direct Selling.

Ankit Chadha and Er. Banita Chadha 256-270

16 Application And Implementation of Crm In Hotels of Developing Cities - A Case Study of Ranchi.

Praveen Srivastava, Abhinav Kumar Shandilya and Shelly Srivastava 271-294

17 An Automatic Bacterial Colony Counter.

Ms. Hemlata, Mr. Ashish Oberoi and Mr. Sumit Kaushik 295-309

Page 2: International Journal of Management, IT & Engineering … doc/IJMIE_JAN2012/IJMRA-MIE498.pdf · International Journal of Management, IT & Engineering (ISSN: 2249-0558) CONTENTS Sr

IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

36

January 2012

Chief Patron Dr. JOSE G. VARGAS-HERNANDEZ

Member of the National System of Researchers, Mexico

Research professor at University Center of Economic and Managerial Sciences,

University of Guadalajara

Director of Mass Media at Ayuntamiento de Cd. Guzman

Ex. director of Centro de Capacitacion y Adiestramiento

Patron Dr. Mohammad Reza Noruzi

PhD: Public Administration, Public Sector Policy Making Management,

Tarbiat Modarres University, Tehran, Iran

Faculty of Economics and Management, Tarbiat Modarres University, Tehran, Iran

Young Researchers' Club Member, Islamic Azad University, Bonab, Iran

Chief Advisors Dr. NAGENDRA. S. Senior Asst. Professor,

Department of MBA, Mangalore Institute of Technology and Engineering, Moodabidri

Dr. SUNIL KUMAR MISHRA Associate Professor,

Dronacharya College of Engineering, Gurgaon, INDIA

Mr. GARRY TAN WEI HAN Lecturer and Chairperson (Centre for Business and Management),

Department of Marketing, University Tunku Abdul Rahman, MALAYSIA

MS. R. KAVITHA

Assistant Professor,

Aloysius Institute of Management and Information, Mangalore, INDIA

Dr. A. JUSTIN DIRAVIAM

Assistant Professor,

Dept. of Computer Science and Engineering, Sardar Raja College of Engineering,

Alangulam Tirunelveli, TAMIL NADU, INDIA

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

37

January 2012

Editorial Board

Dr. CRAIG E. REESE Professor, School of Business, St. Thomas University, Miami Gardens

Dr. S. N. TAKALIKAR Principal, St. Johns Institute of Engineering, PALGHAR (M.S.)

Dr. RAMPRATAP SINGH Professor, Bangalore Institute of International Management, KARNATAKA

Dr. P. MALYADRI Principal, Government Degree College, Osmania University, TANDUR

Dr. Y. LOKESWARA CHOUDARY Asst. Professor Cum, SRM B-School, SRM University, CHENNAI

Prof. Dr. TEKI SURAYYA Professor, Adikavi Nannaya University, ANDHRA PRADESH, INDIA

Dr. T. DULABABU Principal, The Oxford College of Business Management, BANGALORE

Dr. A. ARUL LAWRENCE SELVAKUMAR Professor, Adhiparasakthi Engineering College, MELMARAVATHUR, TN

Dr. S. D. SURYAWANSHI

Lecturer, College of Engineering Pune, SHIVAJINAGAR

Dr. S. KALIYAMOORTHY Professor & Director, Alagappa Institute of Management, KARAIKUDI

Prof S. R. BADRINARAYAN

Sinhgad Institute for Management & Computer Applications, PUNE

Mr. GURSEL ILIPINAR ESADE Business School, Department of Marketing, SPAIN

Mr. ZEESHAN AHMED Software Research Eng, Department of Bioinformatics, GERMANY

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

38

January 2012

Mr. SANJAY ASATI Dept of ME, M. Patel Institute of Engg. & Tech., GONDIA(M.S.)

Mr. G. Y. KUDALE N.M.D. College of Management and Research, GONDIA(M.S.)

Editorial Advisory Board

Dr. MANJIT DAS Assistant Professor, Deptt. of Economics, M.C.College, ASSAM

Dr. ROLI PRADHAN Maulana Azad National Institute of Technology, BHOPAL

Dr. N. KAVITHA Assistant Professor, Department of Management, Mekelle University, ETHIOPIA

Prof C. M. MARAN Assistant Professor (Senior), VIT Business School, TAMIL NADU

Dr. RAJIV KHOSLA Associate Professor and Head, Chandigarh Business School, MOHALI

Dr. S. K. SINGH Asst. Professor, R. D. Foundation Group of Institutions, MODINAGAR

Dr. (Mrs.) MANISHA N. PALIWAL Associate Professor, Sinhgad Institute of Management, PUNE

Dr. (Mrs.) ARCHANA ARJUN GHATULE Director, SPSPM, SKN Sinhgad Business School, MAHARASHTRA

Dr. NEELAM RANI DHANDA Associate Professor, Department of Commerce, kuk, HARYANA

Dr. FARAH NAAZ GAURI Associate Professor, Department of Commerce, Dr. Babasaheb Ambedkar Marathwada

University, AURANGABAD

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

39

January 2012

Prof. Dr. BADAR ALAM IQBAL Associate Professor, Department of Commerce, Aligarh Muslim University, UP

Dr. CH. JAYASANKARAPRASAD Assistant Professor, Dept. of Business Management, Krishna University, A. P., INDIA

Technical Advisors Mr. Vishal Verma

Lecturer, Department of Computer Science, Ambala, INDIA

Mr. Ankit Jain Department of Chemical Engineering, NIT Karnataka, Mangalore, INDIA

Associate Editors Dr. SANJAY J. BHAYANI

Associate Professor ,Department of Business Management, RAJKOT, INDIA

MOID UDDIN AHMAD Assistant Professor, Jaipuria Institute of Management, NOIDA

Dr. SUNEEL ARORA Assistant Professor, G D Goenka World Institute, Lancaster University, NEW DELHI

Mr. P. PRABHU Assistant Professor, Alagappa University, KARAIKUDI

Mr. MANISH KUMAR Assistant Professor, DBIT, Deptt. Of MBA, DEHRADUN

Mrs. BABITA VERMA Assistant Professor, Bhilai Institute Of Technology, DURG

Ms. MONIKA BHATNAGAR Assistant Professor, Technocrat Institute of Technology, BHOPAL

Ms. SUPRIYA RAHEJA Assistant Professor, CSE Department of ITM University, GURGAON

Page 6: International Journal of Management, IT & Engineering … doc/IJMIE_JAN2012/IJMRA-MIE498.pdf · International Journal of Management, IT & Engineering (ISSN: 2249-0558) CONTENTS Sr

IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

40

January 2012

SMEs Competitive Advantage through Supply

Chain Management Practices

Prof. Gyaneshwar Singh Kushwaha

Assistant Professor,

Department of Management Studies,

Maulana Azad National Institute of Technology, Bhopal, India

Title

Author(s)

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

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January 2012

ABSTRACT:

The impact of globalization has compelled SMEs to adopt Information and Communication

Technology (ICT) practices to survive and compete with large companies. This paper describes

the role of Information and Communication Technology (ICT) enabled Supply Chain

Management practices to achieve the competitive advantage. The paper synthesizes the existing

contributions to supply chain literature primarily focusing on ICT practices and draws on various

related bodies of literature that enables SMEs to achieve competitive advantage. The key for

SMEs is that the information and communication technology provides so many options and

avenues to take advantage of in a way that big business just can't or doesn't see value in. Finally

the paper suggests that SMEs should establish appropriate ICTs goals, identifies critical ICTs

needs and allocates financial resources in order to achieve the competitive advantages.

Key words: Information and Communication Technology (ICT), Supply Chain Management,

Competitive Advantage, Small and Medium-sized Enterprises (SMEs).

Introduction:

The small-scale industrial (SSI) sector accounts for 95% of industrial units in India. The sector

accounts for 39-40% of value-addition in the manufacturing sector. Not only that, SSIs account

for more than 30.0 percent of total exports from India. SSIs also account for 6-7% of Gross

Domestic Product (GDP). There are about 13 million SMEs in the country, manufacturing about

8,000 products and accounting for 60 percent of India's exports. Some of them are so big that

they produce up to 80 percent of the total volume of that particular product produced in India.

Information and Communication technology (ICT) is perceived to play a crucial role in

transforming not only big but also small-and-medium enterprises (SMEs). Enabling policies on

the part of government in order to provide incentives to SMEs for usage of ICT is quite essential.

SME are often seen as vital for the growth and innovation of economies and the long term of

economic development of the countries depends on the promotion of SME sector (Ramsey, et al

2003). Behind this lies a common recognition that SME play an important and a key role in

revitalization and development of national economy in many countries by providing various

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

42

January 2012

goods and services, forming a structure of division of labor and developing regional economies

and communities. Furthermore, SME are considered key agents of social and economic growth

and are increasingly becoming the most vital part of the economy since they play a key role in

fostering growth, creating jobs and reducing poverty. Governments in developing nations should

thus promote the growth of SMEs in order to avoid monopolistic and oligopolistic markets with

the right kind of policies and regulatory frameworks. SMEs have great potential to drive

economic growth, so governments should remove constraints and create an enabling

environment. In the backdrop of global financial crisis, the Reserve Bank of India has taken

several steps in order to promote economic growth and avoid recession, which include easy

credit facilities and appropriate credit pricing for SMEs.

This paper is organized into five sections. The first section provides a brief review of literature

that focus on the importance of Information and Communication Technology (ICT) practices in

Small and Medium Enterprises (SMEs). Next section describes the importance of supply chain

management practices in SMEs. Third section describes how ICT enabled supply chain

management practices helps the firms to achieve their competitive advantage. Lastly, the

conclusion and limitation sections elaborate on the findings and limitations of this study.

Information and Communication Technology (ICT) practices and Small and

Medium Enterprises (SMEs):

ICTs are technologies and tools that people use to share, distribute, and gather information and to

communicate with one another, one on one, or in groups, through the use of computers and

interconnected networks. In addition ICTs are mediums that utilize both telecommunications and

computer technologies to transmit information. ICT environment helps in fast and accurate

decision-making by the SMEs due to increased mobility. The critical components before SMEs

are speed of services, access to information, empowering employees in terms of skill and

delivering highest valued services at competitive cost. SMEs need ICT-based solutions in terms

of multi-tasking, expanding customer base, raising productivity, controlling cost, working

remotely, fast and accurate decision-making and facilitating collaboration. SMEs have various

needs in order to function in an aggregative manner to reach out for value addition by keeping in

mind the variable cost model. ICT usage by the SMEs raises productivity of the sector in

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

43

January 2012

particular and the economy in general. Product leadership, operational excellence and customer

relationship, which SMEs look at while using ICT-based solutions is essential. SMEs have to be

good decision-makers, planners and strategy-makers regarding the type of technology, which

they are adopting. There is the need for best manufacturing practices in the SME sector.

Innovation, design development and validation by the SMEs in the face of globalization and

rapid technological advancement, to stay afloat during competition are the essentials. There is

also the need for investment in infrastructure i.e. roads, ports and power, and effective fiscal

interventions by the government so as to promote SMEs. Instead of IT use being limited to

accounting or some in-house activities, there is the need to use IT to look at inventories and

capacity utilization. TQM, TPM, Six sigma, ISO etc are essential for effective standardization of

the SMEs. SMEs instead of adapting to proprietary software like Microsoft Office can rely upon

free and open source software (FOSS) like Open Office, Linux Red Hat et al for cost reduction.

It has been found ERP software such as NAVISON can reduce operational cost drastically. Other

web-enabled ERP vendors are BaaN and IFS. ERP is considered as an integrated system, which

allows information to enter at a single point in the process and update a single, shared database

for all functions that directly or indirectly depend on this information. ERP solutions cover

human resource, corporate finance, production planning and control, materials management,

quality management, plant maintenance, services management, quality management, plant

maintenance, services management, and sales and distribution. Accounting software like Tally

helps in financial management of an organization. Integrated Transactional Information Systems

such as Radix, MakeESS, Octopus-E, Tech Solutions etc. can also help the SMEs. SCM (Supply

Chain Management) software help in raising productivity and efficiency of inventory controls.

CRM (Customer Relationship Management) is considered to integrate people and technology to

maximize external relationships.

Supply Chain Management and Small and Medium Enterprises (SMEs):

The crux of any business lies in its ability to manage its supply chain effectively. In today's

global business context, firms that can streamline their supply chain and churn out finished

products faster will undoubtedly benefit the most. Unfortunately in India, most manufacturers are

faced by hurdles of inefficiencies. While some of them are external, most of them are internal

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

44

January 2012

and can be addressed with the help of technology. In Indian SMEs, experience in supply chain

management is generally lacking. This phenomenon has particular relevance in the SME sector,

which is being forced to perform or perish in the face of global competition. SMEs need to

develop the tools, techniques and training products that help companies to adapt and achieve

viability. They need to focus on linkages by which SMEs can integrate themselves in the supply

chains of large enterprises. SMEs must use technology-based tools in such a manner that they

become the technology sources for larger companies. It is not about using the highest technology

or the most sophisticated techniques alone. SMEs need to concentrate on the fundamental

principles of being a good supplier or distributor. To incorporate supply chain management,

SMEs need to concentrate on assessing the technology requirements for improvement in

processes and management practices. The objective of every supply chain is to maximize the

overall value generated by an enterprise. It consists of all stages involved directly or indirectly in

fulfilling a customer's request. The management of an enterprise often finds itself caught

between customers' mounting demands and the company's need for growth and profitability.

SMEs have been rather slow, and at times reluctant, to resort the offerings of Supply Chain

Management (SCM) for their businesses. The prime focus of most of the solutions and services

available in the market is on the big players rather than SMEs. The latter are also at a

disadvantage due to their inherent resource constraints. However, various factors related to

globalization have now rendered implementation of SCM an imperative even for SMEs. Experts

believe that effective and efficient SCM can help Indian SMEs to reduce their cost and compete

aggressively in the international markets. With the advent of globalization, it becomes imperative

that the supply chains of Indian SMEs are linked with their global suppliers as well as vendors.

The growth of Supply Chain Management in the Indian market is still maturing. The process

seems to have started, but there is a long way to go. To a great extent, due to the huge resources

at their disposal, large enterprises have learnt to leverage SCM to their advantage. Modern SCM

has effectively addressed the needs of SMEs. SCM has allowed Indian businesses to enjoy

productivity and value. Nearly 70 percent of India’s gross domestic product directly or indirectly

comes from SMEs. It is therefore evident that the potential of the SME sector in India is huge.

The advent of globalization has increased business opportunities for companies by many folds,

making timely and safe delivery of express shipments critical. The Indian market has become

competitive and these pressures have made several Indian organizations realize that individual

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

45

January 2012

companies cannot deal with the competition single-handedly. In such cases, the requirement of

supply chain management is of utmost importance for running an organization successfully. To

realize the importance of Supply Chain Management and to develop solutions best suited for a

particular enterprise is the need of the hour. It's all about how a company works today for his

tomorrow. The emphasis should be not only on cost efficiency and quality, but also on speed and

innovation. However, SMEs need to invest in clean and efficient technologies. The role of SME

cluster formation cannot be ignored at all but it is essential to take into consideration issues like

environment impact assessment (EIA), displacement of local people, dispute settlement between

management and labor etc. Re-utilization of industrial wastage by the SMEs becomes an

important strategy to overcome environmental degradation.

Information and Communication Technology (ICT) enabled SCM practices

and Competitive Advantage of SMEs:

In a time of globalization, when competition is increasingly dynamic, small and medium-sized

enterprises (SMEs) must start to become global. It’s very easy to say and everybody will agree,

but, of course, the objective is not so simple. Global competition is forcing enterprises to become

agile. Agility in business performance is the ability of a company to prosper in rapidly changing,

continually fragmented global markets for high-quality, high-performance, customer-configured

products and services. In this endeavor, information and communication technology (ICT) plays

an increasingly important role in facilitating the introduction of new products or services, in

improving operational processes, and in guiding managerial decision making. The impact of

globalization has compelled SMEs to adopt ICTs, to enable SMEs to survive and compete with

large companies. SMEs would greatly benefit by ICTs adoption in their business processes

(Maguire et al., 2007). However, as SMEs continue contributing to the economy, they are faced

with many challenges which inhibit them not to compete with large enterprises. One of the major

constraints is lack of ICTs adoption in their business processes. It is commonly accepted that

ICTs provides many potential benefits to organizations so as to make them more efficient,

effective and competitive (Fink and Disterer, 2006). There is evidence that ICTs will

increasingly empower SMEs to participate in knowledge management by facilitating

connectivity, helping them to create and deliver products and services on global scale

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IJMIE Volume 2, Issue 1 ISSN: 2249-0558 __________________________________________________________

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

International Journal of Management, IT and Engineering http://www.ijmra.us

46

January 2012

(MaCgregor, 2004). ICTs adoption by SMEs would transform the business operations by

enabling rapid, reliable and efficient exchange of large amount of information.

In this information era successful enterprises produce high technology goods and services and

transform human effort materials and other economic resources into product and services that

meet customers need. In such environment, in order to be successful, SME would need high

quality information and must always provide superior value, better than competitors, when it

comes to quality, price and services. SME would need as well as effective information systems

to support and to deliver information to the different users. Such information systems would

include those technology that support decision making, provide effective interface between users

and computer technology and provide information for the managers on the day-to-day operations

of the enterprises. Information is needed for various purposes and serves as an invaluable

commodity or product. Information is very important aspect of decision making in all levels of

management in enterprises (Hicks, 1993), especially in competitive business environment and

managers utilize information as a resource to plan, organize, staff administer and control

activities in ways that achieve the enterprises objectives. The ability of SME’s to realize their

goals depends on how well the organization acquires, interprets, synthesizes, evaluate and

understands information and how well its information channels supports organizational

processes.

Several studies have specifically scrutinized the diffusion of electronic markets, electronic data

interchange and internet commerce among SMEs (e.g. Quayle, 2003; Grandon and Pearson,

2004). The propensity for introduction of e-commerce varies by industry and sector factors. Not

surprisingly, firms with entrepreneurial orientation and high technology content in their products

exhibit significantly higher e-business adoption rates. Other SMEs with limited technology

content suffer from lack of funding and expertise, thus reducing their ability to exploit

technology available beyond the initial web page design. Effective ICT management is

particularly critical for small and medium enterprises (SMEs) because they operate different

from large companies. First, SMEs tend to have centralized structures and to employ generalists

rather than specialists, and this results in a lack of ICT knowledge and technical skills. Second,

SMEs lack the financial resources to invest in ICT infrastructure and to train their ICT users.

Furthermore, SMEs have less in the way of resources to absorb the shocks of an unsuccessful

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A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

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investment in ICT. Mismanagement of ICT can be detrimental to the competitive effectiveness

of enterprises. SMEs are therefore under increasing pressure to employ ICT effectively in order

not only to maintain their competitive positions but also simply to survive. Evidence shows that

durable productivity gains have been achieved in enterprises which have adopted information

and communication technology (Dangayach and Deshmukh, 2003; Sheils et al., 2003). The rate

of expansion of globalization has encouraged among other things the effective flow of data in

organizations, which can only be facilitated by the use of ICTs. The study conducted by (Sharma

and Bhagwat, 2006) argued that the flow of information in an organization is the blood life of

any business operating unit irrespective of its size. In this era of globalization the revolution of

ICTs has affected the way businesses operate. First, it has changed the business structures and

altered the degree of competition. Secondly, it has created a competitive advantage for the

businesses which have adopted ICTs. Thirdly, it has affected the new businesses operations.

These changes have compelled SMEs to adopt ICTs in order to cope with these changes in the

environment (Casolaro and Gobbi, 2007). ICTs adoption by SMEs provides means to access,

process and distribute greater amounts of information to the concerned personnel within an

organization. This aids management to make quick and thoughtful decisions to assist SMEs in

strategic planning (Jimmy and Li, 2003). There is need to embrace the state-of-art technologies

especially in SMEs in order to penetrate international markets and remain competitive despite

the challenges posed by globalization, liberalization and technological changes. In addition

SMEs are faced with competition from multinational corporations in the domestic market

(Sharma and Bhagwat, 2006). These competitions are in form of reduced costs, improved quality

products with high performance, wide range of products and better services, all delivered

simultaneously to enhance the value of their customer (Dangayach and Deshmukh, 2003). This

situation has forced SMEs to adopt ICTs in order to counter the competition posed by large and

multinational companies.

The factors which influences ICT adoption in SMEs includes: organization’s ICT readiness,

external pressure to adopt, customer/supplier dependency, structural sophistication of the

businesses, size, sector and status and its information intensity (Harker and Akkeren, 2002).

ICTs adoption by SMEs increases productivity in the production process enhances and increases

efficiency of internal business operations, and connecting SMEs more easily and cheaply to

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A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

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external contacts (Pokharel, 2005; Taylor and Murphy, 2004). Similarly ICTs adoption by SMEs

improves the operational efficiency, reduce operations cost and create global market access to

SMEs (Schware, 2003). ICTs adoptions by SMEs are faced with many challenges especially

poor ICTs infrastructure, lack of ICTs technical and managerial capacity. In addition, lack of

awareness and understanding of ICTs are also considered as obstacles among SMEs in adopting

ICTs to enhance their business processes. In addition lack of human resources, comprehensive

legal framework, language barriers and lack of confidence and trust in new technologies by

SMEs are the main barriers of ICTs adoption. SMEs are at the very least perceptions of

unresolved security and privacy issues associated with the use of the Internet and therefore,

SMEs are not ready to adopt ICTs in their business processes. Stockdale and Standing (2002)

argued that the barriers to ICTs adoption by SMEs includes lack of resources and knowledge, the

skills levels of business operators, lack of trust in the ICTs and lack of recognition of the

potential to improve business appropriate to the effort and costs of adoption and lack of

understanding of the realizable benefits.

Conclusion:

Since the global economy becomes increasingly reliant on information and communication

technologies (ICTs) in order to receive, process, and send out information, SMEs in developing

countries are expected to go for ICTs. It is said that SMEs face competition from global giants

due to which they ask for protection, and technological and financial support from the State.

SMEs in the developing nations should integrate into the global supply chain, bid for outsourcing

businesses, and increase their own productivity. In the course of time, however, their reliance on

the informal sector of the economy for fetching raw material and informal goods should not

become exploitative in nature. The key for SMEs is that the information and communication

technology provides so many options and avenues to take advantage of in a way that big business

just can't or doesn't see value in. Whether this opportunity lasts for long is unknown, but what is

known is that those businesses that change to meet the ongoing needs of customers will succeed.

SMEs should establish appropriate ICTs goals; identifies critical ICTs needs and allocates

financial resources for the same. This makes ICTs adoption by SMEs possible. System

characteristics within a business aids in ICTs adoption. For instance SMEs with large number of

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A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

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administrative applications readily support ICTs adoption as a tool for management control,

operational control and administration.

Limitation:

The main limitation of this work is the absence of empirical research. This will be taken up as

the future scope of the present work.

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A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories Indexed & Listed at: Ulrich's Periodicals Directory ©, U.S.A., Open J-Gage as well as in Cabell’s Directories of Publishing Opportunities, U.S.A.

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