Businesses relax more on e-investment

Investment in e-business technology could be wasted if a company lacks strong and sophisticated supply chain relationships, according to a study out last week.

Research carried out by Cambridge University within 15 big European companies in sectors ranging from retail to automotive has revealed that manufacturers taking a ‘lean’ approach to their manufacturing are much more likely to thrive than those simply pouring money into e-business technology.

A group of senior industrial managers from Cambridge University’s Manufacturing Leaders programme visited blue chip companies in the UK, Italy and Germany, to study the effects of e-business take-up.

The study found that, in most cases, web-based applications still matter less to business success than factors such as relationships between suppliers or subsidiaries, or process technology.

‘Lean’ principles

Dr Robin Daniels, director of the study programme at Cambridge University’s Institute for Manufacturing, said a number of large companies were re-evaluating what they needed to achieve from e-business.

There is a shift towards using web-based technology simply as a communications mechanism within supplier relationships that were based solidly on ‘lean’ principles such as just-in-time delivery and minimising inventory and waste.

Daniels said: ‘The pendulum is swinging away from a situation where firms were frightened of being left behind and were tempted to invest in e-business solutions that would run right across the company.

‘Instead, they are simply identifying where they want to be in the supply chain and maybe using web-based solutions – if that happens to be the appropriate tool — to make sure they get there.’