Key success factor analysis for e‐SCM project implementation and a case study in semiconductor manufacturers

Abstract

Purpose

The semiconductor market exceeded US$250 billion worldwide in 2010 and has had a double‐digit compound annual growth rate (CAGR) in the last 20 years. As it is located far upstream of the electronic product market, the semiconductor industry has suffered severely from the “bullwhip” effect. Therefore, effective e‐based supply chain management (e‐SCM) has become imperative for the efficient operation of semiconductor manufacturing (SM) companies. The purpose of this research is to define and analyze the key success factors (KSF) for e‐SCM system implementation in the semiconductor industry.

Design/methodology/approach

A hierarchy of KSFs is defined first by a combination of a literature review and a focus group discussion with experts who successfully implemented an inter‐organizational e‐SCM project. Fuzzy analytic hierarchy process (FAHP) is then employed to rank the importance of these identified KSFs. To confirm the research result and further explore the managerial implications, a second in‐depth interview with the e‐SCM project executives is conducted.

Findings

The KSF hierarchy is constructed with two levels: a top‐level consisting of four dimensions and a detailed‐level consisting of 15 individual factors. The research shows that, in the top‐level, strategy is the most critically successful dimension followed by process, organization, and technical; whereas in the detailed‐level, the top management commitment, clear project goal and business requirements, and business process re‐engineering are the top three critical successful factors.

Research limitations/implications

Research surveys and interviews were conducted with two leading companies: Taiwan Semiconductor Manufacturing Company (TSMC) and ASE; they are the largest front‐end and back‐end SM companies in the world, respectively. Although the data collected was primarily based on the experience of one successful e‐SCM project, the significant roles of these two companies and compelling contribution made by the e‐SCM project leading to the research resulted in valuable guidelines for the companies in the semiconductor industry and a useful reference for companies in other manufacturing industries.

Originality/value

e‐SCM system has a high failure rate and there is little literature discussing the KSF of e‐SCM implementation from a holistic view for certain industries. This paper not only provides a structured and comprehensive list of KSFs but also illustrates the application of the most critical factors by examples. In addition to the contributions made to industries, the research results can also serve as a foundation for related academic research when comparing the KSFs of implementing e‐SCM by different industries.

Citation

Hwang, B. and Lu, T. (2013), "Key success factor analysis for e‐SCM project implementation and a case study in semiconductor manufacturers", International Journal of Physical Distribution & Logistics Management, Vol. 43 No. 8, pp. 657-683. https://doi.org/10.1108/IJPDLM-03-2012-0062