Case study
Early challenges of implementing an e-commerce system in a medical supply company: A case experience from a knowledge transfer partnership (KTP)

https://doi.org/10.1016/j.ijinfomgt.2007.11.006Get rights and content

Abstract

Peacocks Medical Group Limited is a leading supplier in the orthotics market in the UK. Until recently the company relied on a well-established part electronic and part paper-based supply chain system, but the increasingly competitive nature of the market has made the company look into further electronically enabling its processes, in order to maintain its competitive advantages and also reduce operational costs and lead times. The case study presents the early experience of their transition to the new system, with particular focus on the analysis and pilot stages, and the impact it has had so far on the stakeholders and the company itself. The case highlights many of the typical problems that such projects may have at their initiation that often hinder progression and lead to failure. Suggestions of possible ways to address these issues in the context of Peacocks’ commercial environment are also considered.

Introduction

Peacocks Medical Group Limited has been in operation for over 100 years, operating across three separate medical business sectors: the provision of orthotic services (i.e. the designing, constructing and supplying devices to support, assist or correct limb and spinal structures), the manufacturing of bespoke and stock orthotic products and the resale of other general medical products through the company's catalogue mail order service. The Group's headquarters and manufacturing operations are in Newcastle upon Tyne, with a branch sales office in Southampton. In addition, the company has a retail unit in Newcastle upon Tyne that supplies both off-the-shelf and bespoke products to patients in the North East of England. The company, which is registered as a limited liability, employs 114 full-time and six part-time members of staff. The company has adopted a rather flat hierarchy management structure, consisting of six directors and 14 team leaders contributing to 13 departments within the company. The company's annual turnover in 2005 exceeded £6m with the net profit exceeding £45,000.

The company is a leading player in the design and manufacture of orthotics and has a strong reputation for the quality and fit of its products. Peacocks retains the lead production time in their market, with competitors often placing orders with Peacocks’ factory to ensure prompt deliveries. The company is always looking at ways to expand and improve the quality of its products, services and care to its customers and patients. Peacocks staff often contribute to research into orthotic productions and related new inventions and improved methods. Many of them, mainly from the orthotics team and the sales and accounting departments, read for Masters and Ph.D. degrees aiming not only to extend their own knowledge but also contribute to their respective fields. In doing so, they also help the company develop further and maintain a ‘fresh’ vision for the future. Their studies are supported by the company both financially and in terms of time needed for personal study and research, as Peacocks views these advancements as imperative not only to the organisation but to the world of orthotics.

Peacocks has managed to retain a leading position and a strong brand name associated with a challenging contender for orthotic products and services, albeit with a limited application of technologies when it comes to managing their processes. This does not mean the company does not appreciate the value and potential gains that information technologies can bring. Recently, due to the company's expansion, advances in information and communication technologies, and the ever-growing popularity of computing in general, attitudes within Peacocks has changed significantly. Staff appreciate the need for process re-engineering using information technology (IT), in order to become more efficient and effective in their daily tasks. In contrast to a previous attempt to re-engineer the organisation's processes, this time staff have been more enthusiastic, helpful and open to the idea of change, which increases the chances of success of any project involving change within the organisation (see for example, Nah et al., 2003). In fact, their knowledge and understanding of existing systems and processes has been valuable while considering which processes can be improved, proposing their own ideas of how information technologies could help them in their own working practice.

IT is now seen as an ‘aid’, rather than being feared by staff. This positive attitude towards IT was facilitated by the introduction of a CAD CAM machine and bar-coding system in 2005, which showed in practice the effects IT can have on the company. It also helped to illustrate how further technological advancement and improvements in other areas could help the organisation to become more efficient and effective, by helping Peacocks maintains its competitive advantages and establish new ones.

Section snippets

Case study background

In this section, we present the context within which this project took place. We start by discussing the knowledge transfer partnership (KTP) framework, we then continue with a stakeholder analysis and a discussion of the current IT infrastructure available. Finally, a section discussing the implications of re-engineering key business processes highlight the emerging challenges.

Methodology

The KTP project's objective was to facilitate the transformation and change of Peacocks’ traditional supply chain towards using Internet and other electronic-related technologies and, therefore, to become an e-supply chain. The paper's research objective closely followed that and the project lent itself to the use of an action research methodology that according to Coughlan and Coghan (2002, p. 222) is: “research in action, rather than research about action, participative, concurrent with

Information management

There are a number of objectives stimulating the re-engineering operation within Peacocks to apply an electronic supply chain system within the company's orthotic processes. In this section we will focus on one important factor, that of information management, which is critical to the success of the new system. This is especially true if in the long term the system is to become an enterprise-wide system rather than a supply chain management one. Information management within Peacocks faces a

Conclusion

Peacocks required a system that could be used to record patient details, clinical records and prescriptions for patients. Customer services and the manufacturing unit to price and build the ordered items, effectively underpinning the company's entire supply chain, would also use the system. An important aspect of the specification was that many users accessing the system within the hospitals could not guarantee access to the Internet, but still required access to all information. In addition to

Acknowledgements

This paper is based on a research and development project awarded to Prof. Feng Li and Dr. Savvas Papagiannidis under the knowledge transfer (KTP) partnership programme, jointly funded by the DTI, ESRC and the Peacocks Medical Group for 2006–2007 (project number 792). We acknowledge the financial support provided for this project and the support provided by the KTP team.

Kerry Martin completed her Information Systems undergraduate degree at Newcastle University in 2005. She then continued her education with an Mphil in E-Business while working on a Knowledge Transfer Partnership project between Newcastle University and Peacocks Medical Group.

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Kerry Martin completed her Information Systems undergraduate degree at Newcastle University in 2005. She then continued her education with an Mphil in E-Business while working on a Knowledge Transfer Partnership project between Newcastle University and Peacocks Medical Group.

Savvas Papagiannidis graduated from the Physics Department of the University of Newcastle upon Tyne. Upon completion of his PhD he joined the eBusiness Group at the Business School, in the same University. Savvas has started a number of eBusiness ventures and also worked as a freelance Internet developer. His research interests include management of internet and emerging technologies, high-technology related entrepreneurship and e-business models.

Feng Li is Chair of E-Business Development and his research has centrally focused on using information and communications technologies to facilitate the development of new strategies, business models, and organizational designs. He serves as Guest Editors and is on the Editorial Boards of several international journals. He a Council Member of the British Academy of Management (BAM) and Chair of the BAM E-Business & E-Government Special Interest Group. His work on Internet Banking Strategies and Business Models, and on the evolving Telecommunications Value Networks and Pricing Models have been extensively reported by the media. His new book, What is e-Business? How the Internet Transforms Organizations, has been published by Blackwell (Oxford). Further information about Feng is at http://www.ncl.ac.uk/nubs/staff/profile/feng.li.

Michael Bourlakis is currently a Senior Lecturer at Brunel Business School, Brunel University (London, UK). Michael has more than 10 years research experience dealing with marketing, distribution channels and supply chain management. Michael graduated in Business Administration at the Athens University of Economics and Business (Greece) and obtained both his MBA and PhD degrees from the University of Edinburgh (UK). Michael worked as a Lecturer at Newcastle University and as a Research Associate at the Management Centre, University of Leicester (UK) and at the Oxford Institute of Retail Management, Templeton College, University of Oxford (UK). He has published in various logistics, supply chain management and marketing journals and sits on the editorial boards of the British Food Journal and Supply Chain Management: An International Journal.

Steve Cook is a graduate of Production Engineering and Operations Management from Nottingham University. Prior to joining Peacocks Medical Group he worked at Newcastle University as a Teaching Company Associate, working in business process re-engineering. Steve then went on to gain an MBA from Durham University. He has led improvements in quality and efficiency of supply of products and support services at Peacocks and recently was a key participant in the Orthotics Pathfinder Pilot. Steve is now Commercial Director at Peacocks.

Alan Hansell is the Finance Director at Peacocks Medical Group Limited and has been with the company for ten years. Previously, Alan had qualified as a Fellow of the Institute of Chartered Accountants. He had a number of appointments with Big 8 Accountancy Partnerships—Senior Audit partner, IT partner, Training and Student partner and finally Office Managing Partner with Arthur Anderson. Prior to that partnership's demise he moved to become Managing Director in a local SME family company manufacturing and distributing sweets for the UK and export markets.

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