The digitization of supply chain processes is an area of very rapid development in both practice and research. External conditions that can influence this digitization process and results have been part of the discourse from the very beginning. So far, however, no holistic assessment of the nature and impact of these influencing factors has been made in Russia.
This paper aims to provide such a holistic assessment by both identifying peculiarities in the focus of supply chain digitalization in Russia and explaining the identified peculiarities in focus.
Introduction
Aim of Analysis & Research Objectives
In combination, they aim to provide a holistic and comprehensive view of supply chain digitization mismatches between Russia and a Western European country. Another key factor for choosing Switzerland as a benchmark is the fact that Switzerland is offering an environment for supply chain digitization that is almost the opposite of the environment that can be found in Russia. The answers to these two initial research questions ideally provide an accurate picture of the discrepancies of supply chain digitization in Russia compared to supply chain digitization in Switzerland.
Answering these questions should result in a clear picture of differences as well as reasons for these differences in supply chain digitization between Russia and Switzerland.
Literature Review
Classification and Topical Boundaries
This cognitive component distinguishes between the transcendent discipline of supply chain management and a mere physical flow of goods;. The definition of the term supply chain itself is generally in harmony with the definition of supply chain management, but focuses on particular aspects of the overarching discipline. Building on and rooted in this foundation of the actual supply chain, a more transcendent and comprehensive management process that is part of the overarching discipline of supply chain management can be conceptualized.
Although some of the aspects of digitization discussed in this paper are strongly related to processes that can be seen as part of the transcendent discipline of supply chain management, the overall focus is on the fundamental concept of the supply chain and the actual flow of goods.
Previous Research on Supply Chain Digitalization
- Supply chain structure
- Visibility & agility
- Automation
In this context, the configuration and operation of the supply chain is obviously a key driver for success. An important influence of digitization consists of the enormously increased possibilities of supply chain integration. A very direct impact on the structure of supply chains is due to new information technologies that enable new connections between different actors in the supply chain.
Another important challenge can be found in the aspect of power distribution among supply chain partners.
Previous Research on External Influences on Supply Chains
- Social and cultural influences
- Geographical influences
- Economic factors
But at the same time, power distance can also have a more holistic effect, supporting data sharing and the quality of supply chain partnerships in general. In terms of supply chain agility and visibility, the cultural dimension of uncertainty prevention is particularly relevant. Of course, the performance of a supply chain is also sensitive to the regulatory framework in which the supply chain operates.
So far little research has been done on the potential impacts of the regulatory environment on supply chain digitization in Russia.
Methodology
Quantitative Stage
- Benchmark country
- Previous study «Logistikmarktstudie Schweiz»
At the initial stage, companies with significant supply chain operations on the territory of the Russian Federation are asked to participate in a survey on their current state of supply chain digitalization. Questions about the current status of development and implementation (5 questions): These questions are the real heart of the analysis, as the answers indicate the actual status quo. Questions regarding beliefs of the participant (2 questions): In these questions, the participants are asked about their general beliefs, e.g.
Some of the questions are based on the previous Swiss study and have therefore been fully verified in previous research. Questions regarding the participants' company (3 questions): These questions aim to provide a basis for categorizing the participants based on their company characteristics and therefore also contribute to the overall characterization of the sample. A glance at the graphical representation of the ranks in figure 1 immediately reveals a stark contrast between Russia and most leading industrial nations.
In the 2016 edition, the Russian Federation ranked 99th and is thus in a similar ranking area as many African countries (World Bank, 2017). One of the most ranked countries, Switzerland, serves as a reference point for the quantitative analysis in this paper. In order to create a context for the findings of the questionnaire and to create a comparative relationship, the results from a previous survey of 2016 conducted among Swiss companies were taken into consideration.
The previously conducted Swiss study also serves as a demonstration of the economic validity of the questions used in the questionnaire here in Russia. In the original paper, the answers were weighted by a company's earnings to provide a representative overview of the situation in the economy in terms of output.
Qualitative Stage
Nevertheless, to account for possible differences and patterns that may be due to company size, statistical analysis is used to check for possible correlation or causation effects of company size, both in terms of turnover and number of employees. This method also makes it possible to eliminate potentially deterrent effects based on exchange rates, number of participants or sample size and consistency in general. The instrumental approach stems from the fact that the cases are not primarily used to understand the specific situation of the cases, but rather the external factors in general that predominated in the cases (Baxter & Jack, 2008).
Therefore, accompanying interventions and interruptions were possible and intended to support both general understanding and level of detail. In a fully structured interview, such spontaneous questions and deviations from the predefined interview guide would not be possible (Cassell, 2009). A full version of the prepared interview guide with all questions used can be found in the appendix.
Only people who are well acquainted with all activities and strategic initiatives in their respective companies are selected as interview participants. Since several of the questions are quite detailed and thus the interviewee may need to reflect on past actions and future plans and may even require the interviewee to do research or at least memorize their answers to the questionnaire, the full interview guide is provided prior to the interview. provided to interview participants. The order follows a funnel approach; the initial questions are quite general and pertain to the company's operations and strategy in broad strokes, while the final questions are really specific and ask for concise information about a near current focus.
Using the answers to the analyzed company's questionnaire as an additional source and starting point for further research in the case study facilitates the triangulation of evidence and thereby strengthens the validity of the conclusions and generalizations drawn (Eisenhardt, 1989). In addition, referring to the survey results allows triangulation of the situation presented in the responses.
Description & Discussion of Results
- Overview of Survey Results & Identification of Divergences
- Case «International Logistics Company A»
- Case «International Logistics Company B»
- Influence Factors and Explanations
- Overview of identified influence factors
In the Swiss benchmark sample, only 10 percent of participating companies claim to have comprehensive cybersecurity technologies in place across the company. The company is very interested in supply chain digitization and has already realized a wide range of digitization projects in almost all parts of the company in Russia. Logistics Company A's survey responses provide a holistic first impression of the company's supply chain digitization activities in Russia.
A look at the use of digital technologies in logistics company A reveals a significant difference in the focus on cyber security compared to the comparison sample. There are some important differences between Company A's expectations of the impact of digitization and those of the average Swiss logistics provider. International logistics company B has its Russian headquarters in Moscow and manages three local branches in the western part of Russia and the far east of the country.
In addition, three local representatives support the company's availability and presence in the Russian market. The industry focus of the company's customers is highly dependent on the part of the country. While Logistics Company B serves customers from a wide range of industries in the western part of the country, its activities in Siberia and the Far East are largely focused on the oil and gas industry.
The terms and scope of the investments required are clearly predetermined in the contract, usually with a medium term. In general, the company's Russian subsidiary can be considered as the company's average in terms of supply chain digitization (Manager Logistics Company B, 2018). For example, logistics company B deploys all technologies more intensively and more broadly than the average participant in the Swiss benchmark study.
In the case interviews as well as selected survey questions, the impact of external influencing factors on supply chain digitalization in Russia was in focus.
Managerial Implications & Recommendations
Especially among younger employees, such a culture and environment that encourages proactivity can be established through consistent reinforcement and appropriate demonstrative leadership (Manager Logistics Company B, 2018). In general, we can conclude that knowledge of the environment is the key to the success of managers, not only in Russia. Knowing the general influencing factors elaborated and explained in this paper is a good starting point for such a review, as it sheds light on usually sensitive or risky aspects of business.
Limitations & Suggestions for Further Research
Final Conclusion
Businesses in Russia are excited about the topic and believe in the benefits of supply chain digitization. The impact of digitization on product offerings: using direct digital manufacturing in the supply chain. Expected impact of supply chain digitization on different performance dimensions (percentage of sample, N Russia = 27, N Benchmark = 159).
