A temporal information system cost model in supply chain management

Abstract

In the supply chain realm, an information system plays a crucial role in defining its capacity and efficiency. As the supply chain itself evolves constantly due to strategical or tactical business optimisations from supply chain participants, information system planners experience tremendous challenges in defining cost-effective and flexible supply chain information systems to align with existing and forthcoming supply chain changes. The principal challenging question is how much the supply chain management system will cost against the functions delivered. In many cases, computer system planners rely on software suppliers' quotations solely to estimate the supply chain system cost. However, a quotation hardly suggests the precise total cost due to lack of understanding or information of the particular implementation. Apart from this reason, there are usually various hidden costs that are relevant to the users only, such as unplanned changes. These costs will certainly not be reflected on the quotations. A practical supply chain management system cost estimation method is therefore indispensable to the system planners.This research is an attempt towards estimating the supply chain information system cost at the early stage by synthesising resource constraints of budget, time, implementation scheme and developing team. A temporal cost estimation model is proposed to facilitate effective operational decision making on supply chain management system practices, in regard to the high supply chain uncertainty. With the mathematical cost model in place, analytical researches are performed to complete the knowledge base that a supply chain management system planner would need. Finally, the model strengths and weaknesses are reviewed for reference and future improvements.