E-Commerce Essay

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THE IMPACT OF E-BUSINESS TECHNOLOGIES ON SUPPLY CHAIN OPERATIONS: A MACROECONOMIC PERSPECTIVE Amit Basu and Thomas F. Siems Research Department Working Paper 0404 FEDERAL RESERVE BANK OF DALLAS The Impact of E-Business Technologies on Supply Chain Operations: A Macroeconomic Perspective Amit Basu and Thomas F. Siems* November 2004 Abstract: New information technologies and e-business solutions have transformed supply chain operations from mass production to mass customization. This paper assesses the impact of these innovations on economic productivity, focusing on the macroeconomic benefits as supply chain operations have evolved from simple production and planning systems to today’s real-time performance-management information systems using advanced e-business technologies. While many factors can influence macroeconomic variables, the impact of IT-enabled supply chains should not be overlooked. We find evidence that the impact of e-business technologies on supply chain operations have resulted in a reduced “bullwhip effect,” lower inventory, reduced logistics costs, and streamlined procurement processes. These improvements, in turn, have likely helped to lower inflation, reduce economic volatility, strengthen productivity growth, and improve standards of living. JEL Classification: B22, D20, O30 Keywords: information technology, e-business, supply chain, macroeconomics, productivity. PRELIMINARY DRAFT COMMENTS WELCOME _________________________ * Basu is Charles Wyly Professor of Information Systems, Cox School of Business, SMU, Dallas, Texas 75275, phone: (214) 768-8257, e-mail: abasu@mail.cox.smu.edu. Siems (corresponding author) is Senior Economist and Policy Advisor, Federal Reserve Bank of Dallas, Dallas, Texas 75201, phone: (214) 922-5129, e-mail: tom.siems@dal.frb.org. We thank John Duca for helpful comments and suggestions. The views

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