Enterprise Resource Planning (ERP) was introduced in late 1980’s. Back then, ERP systems were implemented in huge scale business organizations. During its inception, the use of ERP and adoption of ERP systems were considered to be complex (Leon 2014). Thus, there were certain ofthe use of ERP as with the implementation of these systems, the business were bound to bring on certain modifications in the existing operations of the organization. ERP is a software that is used for better business process management that helps an particular organizationwith an integrated set of application that helps in managing and automating a business (Jacobs, Chase and Lummus 2014). ERP offers a number of benefits in large scale business. ERP has a significant role to play in supply chain management as it helps in easy interaction with a number of suppliers. The supply chain management consists of suppliers, manufacturers, distributors and retailer (Kurbel 2016). The process of supply chain management involves proper controlling, monitoring, planning and execution of all the supply chain related activities. Therefore, ERP has a significant use in Supply chain management. The research report will be identifying the ERP benefits in supply chain management. Use of ERP relates to theimprovement of the efficiency, in order tracking, easier decision making and in increasing the productivity.
The research aim is identificationand analysis of the ERP system in supply chain.
The research’s objectives are identified in the points below-
The primary questionrelated to the research regarding ERP is identified in the following point-
The ERP’s use has significantly increased over the years. ERP plays a significant role in vendor managed inventory. The research study aims in analyzing the impact and the enterprise resource planning system’s usage in increasing the efficiency in decision making. There have been a number of researches associated with ERP and its advantages in increasing the operational efficiency (Laudon and Laudon 2015). This research project aims in addressing the efficiency of ERP in organizational decision making and in increasing the supply chain management (Chae and Olson 2013). The ERP helps in improving the process of decision making in an organiztaion. The use of ERP in SCM has other significant uses as well. An ERP offers an effective way for managing the procurement and supply of goods. The similar uses of ERP will be evaluated in this research report.
Use, development and installation of Enterprise Resource Planning system (ERP) in business has become a necessity in today’s dynamic world. This is particularly because the use of ERP helps in speeding up the operational efficiencies and increasing the flexibility of the processes of the organization (Fredendall and Hill 2016). Thus, analyzing the use and impact of ERP in supply chain management becomes an essential need. Earlier, the implementation of ERP in business was considered to be a complex task (Ross 2015). However, in this dynamic world, major business could realize the effectiveness of implementation of ERP and its use in decision making. The research report aims in analyzing the impact of ERP in supply chain management and therefore, undertaking this research project is justified.
The research hypothesis identified for this research study is evaluated in the following point-
H1: The use of ERP on management of the SCMhas positive impact on the associated business
H0: The use of ERP on management of SCMhas no positive impact on the associated business.
The entire research project is divided into a number of individual chapters that will helps in easy identification of the factors that contributes to increase of operational excellence and decision making with the implementation of ERP in Supply chain Management (Waters and Rinsler 2014). A brief idea of each chapter that the research project will be evaluating is discussed in the paragraphs below-
Chapter1-Introduction: The first chapter or section of the research project analyses the background, significance and the rationale of the research. The chapter identified the aims and objectives and the analyses the questions that the research study will answer.
Chapter 2- Literature Review: The Literature Review section is a vital chapter in this research study since it discusses the theories related with the use and implementation of ERP in SCM.
Chapter 3- Research Methodology: The chapterof research methodology identifies and analyses different research tools and techniques that the researcher has followed in implementation of the research project. It will further give an idea of the data collection and data analysis technique on which the research isfocused.
Chapter 4- Data Collection and Analysis: The collected data will be analyzed in this section by making use of primary quantitative data analysis method. This is one of the most crucial chapters of this research project that helps in testing the hypothesis that are identified.
Chapter 5- Results and Discussion:This section will summarize the major research findings and will analyze whether the research is able to find suitable answers to identified research questions.
Chapter 6- Conclusion and Recommendations: The conclusion and the recommendation chapter associated with a research willconclude the findings of the research and recommends ways to work on the project in a more efficient manner in further studies.
The Literature Review section of the report is a vital part of the entire research report since it reviews the previously published research journals in the field of ERP Systems and SCM. It becomes essential to evaluate the available literatures as the base of the research study will be build through the analysis of available literature published in the field of ERP and SCM. The use of ERP system is needed to evaluatefor testing the hypothesis of the research that is identified for the research project. The supply chain management consists of a huge network of manufacturers, distributors, suppliers and the customers. It is observed that the usage of enterprise resource planning system (ERP) can help in easier management of all the major processes of business and the operations associatedwith the supply chain management. The use of ERP not only increases the operational efficiencies but also increases the efficiency of the operations running within the organization. Thus, the use of Enterprise Resource Planning system helps in efficient decision-making. This chapter will analyze the advantages of ERP in supply chain management. The chapter will deal with the concepts, co-ordination, Co-operation and integration process of ERP system in Supply SCM. Subsequently, the role of ERP systems helps in creation of information structure, process and cooperative mechanism in supply chain will be outlined in the report.
ERP systemis described as a software for managing the business processes that integrates every operations running within the organization. With the use of ERP, effective management of the running business process within an organization is possible. The ERP software helps in integrating all the operations within the organization and therefore is widely used in SCM. The implementation of ERP system came into effect by replacing the legacy software systems that were quite ineffective in managing huge business processes.
An Enterprise resource planning software mainly consist of a a number of enterprise software modules, each of which has some specific functions. The most common ERP modules provides support to inventory control, distribution of the task, accounting, marketing finance and human resource management (Kasemsap 2015.). Although initially, the implementation of ERP systems was slower, use of ERP has changed in a last couple of years with the introduction of newer technology and trends in the field of the ERP. There are a number of ERP system which includes Mobile ERP, Social ERP , Cloud ERP and Two Tier ERP (Voronkovaet al. 2017). The adoption of a particular ERP is dependent on the size of the organization and the complexity of the business processes that are running within the organization. Thus, the usage of ERP in management of supply chain is justified.
SCMis a technique that can be described as a flow of goods and services that incorporates all the processes involved with development of final products from raw materials. It involves active streamlining of different business activities that maximizes the efficiency of a business process (Hwang 2014). The process of SCMattempts to involve the delivery of finished goods making use of raw materials. Thus supply chain management is a lengthy process and is complex as well. The supply chain network involves huge characters such as manufacturers, distributors, suppliers and customers. The Supply chain management aims inimproving the trust and collaboration with the different supply chain partners (Shenet al. 2016). There are mainlythree types of materials or information flows in supply chain management which is material flow, information flow and financial flow. Thus, effective management of all the operations associated with the supply chain management can be achieved with the help of ERP.
The ERP systems mainly aim in coordinating the integration with Supply chain management. The ERP system has a number of benefits for the organizations and companies. Improvement in network of supply chain can help an organization in overcoming the difficulties associated with the management of supply chain. The usage of ERP systems in SCMhelps in overcoming the difficulties associated with the supply chain management process (Bhumgara and Sayyed 2017). Use and implementation of an ERP system requires enhanced collaboration by controlling all the suppliers and the customers. The research project aims relate to the analysis of the use of ERP in SCM and in effective decision making. The aim of SCM is to ensure central control. With the implementation of ERP system, all the processes within an organization are integrated in an efficient manner (Ha and Ahn 2014). The research project aims in identification of the impact of supply chain management in organizational decision making so as to control and efficiently manage the business operations associated with supply chain management. The ERP has a large effect on the supporting utilities of an organization which includes time management, increasing accuracy and efficiency. The ERP system furthermore has a large impact on both inbound and outbound activities. The effectiveness along with the efficiency of ERP systems in SCM is therefore needed to be addressed.
Integration of ERP system in SCM is quite significant as it its use has been rapidly increasing over the years (Golicic and Smith 2013). However, it becomes essential to evaluate the role of supply chain integration with technology in today’s working environment. Use of Technological innovation becomes necessary for organizations as it helps in easing out the operational problems associated with the organizational process management (Bhumgara and Sayyed 2017). Enterprise Resource Planning system is being adopted by almost all business sectors such as production, distribution, supply, manufacturing and wholesale retail. The use of enterprise resource planning is therefore beneficial for supply chain management.
In this dynamic world, the companies need to adapt to the new challenges and changes in order to improve the business efficiency and to maintain the competitive position in the market. ERP plays a vital role in management of supply chain. With the installation of ERP system, it is possible to efficiently manage the suppliers and the ERP vendors.
As identified earlier, the Supply Chain network mainly consists of a group of suppliers, distributors and customers (Shaul and Tauber 2013). In Supply Chain management process, there are three types of process flows that help in easier co-operation and co ordination. These are as follows-
Material Flow: It is a type of physical flow of materials representing the movement a product from the suppliers to the customers and movement of product from customers to suppliers if the finished product requires any servicing or repairing.
Information Flow: The flow of information is another major process flow associated with the supply chain management (Golicic and Smith 2013). Information flow represents order transmission for order tracking. The information flow is rightly coordinated with the physical goods flow.
Financial Flow: The financial flow in supply change management process mainly represents the credit terms, payments, consignments and other arrangements for ownership. The financial flow in supply chain management requires a significant co-operation level among all the members of supply chain
The networks of supply chain management support three main pillars which includes the processes that determine a firm’s ability in management of the logistics for development of new products and knowledge management. The other process includes the organizational structure of the firm that helps in determining the relationship between various members across supply chain (Shaul and Tauber 2013). Thus, the installation of an ERP System largely relates on the structure of a firm and its operational complexities. Enterprise Resource Planning systems are mainly implemented with a need of reducing the operational inefficiencies associated with the project (Bhumgara and Sayyed 2017). The use and implementation of ERP system helps in improving the operational inefficiencies and therefore the integration of ERP’s use in Supply chain management is considered to be one significant technological innovation. The ERP in supply chain management offers a number of key benefits. The major benefits of Enterprise Resource Planning system is identified in the following section.
Prior to the analysis of the process by which ERP can help in SCM, it is needed to evaluate the benefits it offers to a firm. There are a number of benefits of ERP on supply chain management which are as follows-
As identified in the previous section, the improved decision making ability is one significant benefit of the use of enterprise resource planning system (Nofal and Yusof 2013). Various researches have been done in this field, which provides a good understanding of the use of Enterprise Resource Planning System in easier decision making. In the current business practices, ERP systems help the small companies in managing the financial data such as billing information and merchandising (Chofrehet al. 2014). Business organizations that rely on Enterprise Resource Planning System for decision making generates certain business benefits. The use of ERP software helps in generating accurate analytical predictions that is based on customer’s previous behaviors and other trends. Enterprise Resource Planning Software integrates all the vital business data that helps in better decision making. Use of ERP helps in easy communication of the users with the suppliers, distributors and customers from a customized dashboard. Furthermore, the use of integrated approach to decision making ensures that the companies are able to make better judgments in every stage of supply chain management. The possibility of effective decision making helps in effective business growth.
It is necessary to evaluate the process by which the ERP software helps the decision makers. An effective ERP system provides a firm with a consolidated data set with accurate intelligence that can be extracted in real time (Matende and Ogao 2013). Therefore, the usage of Enterprise Resource Planning system helps in easier decision making. Thus, implementation of ERP system in SCM is beneficial for business growth.
The use of ERP increases the operation efficiency of an organization. As discussed earlier, the ERP system plays a vital role in SCM (Zeng and Skibniewski 2013). In the previous sections of the report, the benefits of combining the supply chain management and the ERP systems are discussed. ERP increases the efficiency of the business operations by streamlining all the processes within the organization. ERP has a number of advantages one of which is efficient operations management. A number of operational process such as project design and management, aggregate planning and capacity and inventory management. Enterprise Resource Planning or ERP system is mainly designed for integration of all the internal and external operations associated with SCM.
Thus, the use of ERP system brings about operational benefits in SCM which can be considered as a major positive impact of ERP system. With the help of an ERP system, the material flow and information flow from Vendor to consumer is maintained. Since one of the supporting qualities of the ERP system is to co ordinate all the tasks associated with a SCM, the role of ERP in management of operations is quite huge. The operational efficiencies in supply chain can be achieved by making use of appropriate enterprise resource planning system in business organizations. The critical success factor associated with the ERP’s usage is its accurate implementation. A planned approach of ERP implementation is needed along with training the staffs for ensuring that the ERP system has been successfully implemented in the project.
It isobserved that ERP has been implemented successfully in supply chain management. Majority of the large sized organization has been implementing Enterprise Resource Planning system in their daily operations (Golicic and Smith 2013). Enterprise resource planning system helps in integrated management of the core business processes that facilitates the information flow within the organization. The Supply Chain Management is considered to beassociated with the management of various upstream and downstream relationships related to the suppliers and the customers. Supply chain management helps in delivering superior customer value in an efficient manner. ERP on the other hand helps in integration of all the viral operations of the organization (Schönsleben 2016). Therefore, supply chain integration with ERP is considered by the researchers and the practitioners to be vital contributor for supply chain performance (Brandenburget al. 2014). Most of the concepts ofintegration of supply chain aredirectly associated to the existence of two flows, which include flow of needed information along with the flow of goods.
The critical success factors behind success of implementation of ERP in supply chain management are as follows-
The above discussed points indicate the most significant critical success factors associated with a project. It is essential to appropriately set the critical success factor of a project prior to the project implementation, so that the extent to which the project is able to fulfill the requirements can be examined. The critical success factors behind the successful integration of supply chain and ERP is identified by evaluating the existing research journals in the field.
The chapter discusses the key factors associated with the integration of ERP with SCM. The ERP system use will contribute to the smooth operation of supply chain. ERP has a number of advantages, which includes the reduction of human errors, considerable time saving and increasing the efficiency of the resources. The literature review chapter of the research project outlines the role of ERP in SCM. It is observed that ERP system has become an integral part of SCM as majority of the organizations of business are making usage of ERP system in management of supply chain.Management of supply chain network with ERP system is essential as SCMoffers huge characters such as manufacturers, distributors, suppliers and the customers. ERP helps in co ordination of the different activities associated with the project so that delays in supply chain can be minimized. An extensive literature review has been undertaken for understanding the impact of supply chain in organizational decision making. Supply chain integration with ERP has a significant benefit in this world of technology. The need for increasing the supply chain effectiveness has a significant impact on development of the technical software like enterprise resource planning system. The literature review chapter establishes the interrelationship between the ERP system and SCM that helps in identifying the need for implementing ERP in organizations. Enterprise resource planning system helped in coordinating the key factors associated with the organizational decision making.
The section of research methodology deals with the integration and collection of tools, processes and techniques that helps in gathering the different information that is needed for the research project. Prior to the research, it is identify and understand the theoretical aspects associated with a research. The use of appropriate research processes ensures successful conduction of a project. The aim of the methodology chapter therefore, is to provide a detailed insight to several methods, associated theories and concepts used for the research work. Choosing an accurate research methodology is needed for the research in an appropriate manner. The research philosophy, approach, design and data analysis method chosen for this research project is discussed in the sections that follow.
It is vital for the research in exploring research philosophy so that the research can be directed study in a specific direction. There are mainly threedifferent types of research philosophies that are mainly used in researcher that are academic and scientifiec. These are positivism, realism and interpretivism. The use of positivism philosophy in the research helps in making use of information available in a planned technique. Research philosophy is connected with the process of implementation of the research project. The interpretivism philosophy on the other hand helps in logical interpretation of the available data. Thus, the researches that involve interpretivisim research philosophy make use of qualitative data. Research philosophy is directly connected to the supporting of the perplexing structure associated with the research. In realism research philosophy, logical hypotheses are mainly used for the research project. For thisparticular research project, the researcher has made use of a positivism philosophy in the research.
Positivism research philosophy is chosen as it involves the making use of theories and practices that already exists for achieving the desired results. Thus, the positivism research philosophy involves collection and analysis of scientific data. The collected data is analyzed by making use of quantitative research. Interpretivism and positivism research philosophy are the two basic approaches that can be used for academic research. However, this particular research philosophy involves the analysis of quantitative data and therefore, interpretivism research philosophy is not chosen for this research project. The use of positivism research philosophy will help the researcher in uncovering shrouded data associated with ERP integrationwith supply chain management.
For scientific research, it is essential to choose an appropriate research approach for designing and conducting the research study. The scientific researches mainly involve two approaches for the research which are deductive approach of research and inductive approach of research. Deductive approach is mostly used in the research projects that involve testing a data or a hypothesis (Neuman 2013). Inductive approach on the other hand does not involve testing of any hypothesis. Therefore, deductive approach is chosen for the research project is which the hypothesis has already been set. In deductive approach, the primary aim of conducting a research is proving or testing the identified hypothesis. The inductive research on the other hand is suitable for the researches that aim in finding solutions to a set of research questions. Thus, the inductive research approach involves consideration of theories, concepts and the data associated with a research and it mainly involves conducting the observation or tests for collection of information (Panneerselvam 2014). Thus, the use of inductive approach involves formulation of new theories. The research approach that is chosen for this particular research is deductive approach of research.
A deductive approach for the research is mainly chosen for the study of the research as it involves testing of a hypothesis. A quantitative research approach is chosen for the research project which will help in evaluating the role ERP system in SCM. The choice of deductive research approach is found to be justified since this particular research study cannot be conducted by following aninductive approach.
It is mandatory for the researcher to identify an appropriate research design in order to manage the project. Utilization of point by point examines configuration helps in building up of the systems that is required for information gathering and investigation (Dang and Pheng 2015). Choice of an appropriate research design helps in directing the research investigation in a planned planner. The research designs that are mainly used in academic researches include explanatory, exploratory and descriptive research design (Flick 2015). The choice of the research design mainly depends on the type of research study. For thus research project, descriptive research project is chosen.
The researcher has opted for a descriptive research design for the research project in order to direct the investigation according to the identified project aim. The use of descriptive research design is appropriate for the research as with this research design, the aims and objectives identified for the research will be evaluated. The research is mainlyrelated to the appropriateness of the collected data and therefore, the choice of descriptive research design in justified.
For this research project, a primary data collection process is chosen. There are two different types of methods of research which include primary data collection method and secondary data collection method. The method for primary data collection makes use of different information from the sources who has a proper knowledge about the issue. Thus for collection of primary data, it is essential to conduct interviews and surveys. Interviewing an operational person can help in collection of the information needed for the research. Similarly surveys can help in collection of information from a number of respondents. Another source of collection of primary data involves observation
Secondary data on the hand involves collection of data from already available sources. Therefore, collection of secondary data involves collection of data from books, research papers and scholarly articles. Secondary research methodology is favorable for the researcher as a large amount of data is available to the researcher. Furthermore, the data obtained from secondary sources are reliable.
For this research project, the method chosen is primary research method. The data will be collected through online surveys and interviews. The collected data will undergo statistical data analysis.
There are mainly two types of data analysis methods, which are qualitative data analysis and quantitative data analysis (Silverman 2016). The qualitative data analysis method involves the use of non numeric information such a interviews, transcript and notes for analyzing the collected information.
Quantitative data analysis method on the other hand indicates the use of statistical data by making a correct use of different statistical and mathematical tools. It helps in proving the hypothesis of the research (Lewis 2015). Quantitative data analysis method is opted in this research as it involves the collection of numerical data through online surveys. Excel spreadsheet and SPPS are two of the most widely used technique for data analysis. The choice of quantitative data analysis method is justified for the research project as the data obtained from the online surveys will help in analyzing the data appropriate to reach a completion (Taylor, Bogdan and DeVault 2015). Apart from that the response of the interviews will undergo qualitative data analysis.Quantitative data analysis method has a large significance in the research works that records the attributes and consequences of the research in an appropriate manner.
For collection of the data associated with the research, a sample size of 50 is chosen. An online survey will be conducted with the individuals who have a firsthand knowledge about the implementation of ERP in supply chain management. Therefore, for this research project, a particular sample size from the total population should be approached for collection of the data that is needed to conduct the research in a proper manner (Mackey and Gass 2015). A probability sampling technique is used in the research study. The data from 50 people will be analyzed with quantitative analysis process. Apart from that, an interview will be conducted with five managers who have made use of ERP in supply chain management.
A scientific research work needs an adherence to the set ethical guidelines that are set up by the academic council. Thus, for a researcher it is essential to mandate the adherence of the several guidelines associated with the project. The ethical considerations associated with this research project are as follows-
These are the major ethical considerations associated with an academic research.
The research methodology chapter identifies the philosophy and the approach of the research. Choice of an accurate research approach and design is needed for the research to be conducted in an appropriate manner. The chapter further identifies the data collection process and data analysis method that is neededfor this research project. The research involves an online survey and therefore, it is associated with certain ethical considerations, which are highlighted in this chapter.
As discussed in the research methodology chapter, the data for the research is collected by primary methods of interviews and data analysis. Data collection and analysis is an important chapters of a research as it enables a researchertocomplete the research in a legitimate way. For collection of the data, a sample size of 50 respondents is opted. The data from the 50 respondents are collected from an online survey based on a pre-developed questionnaire. The questions were directed to the respondents in such a way that the advantages or the disadvantages of making using ERP in supply chain management can be evaluated. Along with an online survey, data has been collected from the method of interviews as well. The collected data has undergone both qualitative and quantitative data analysis. The data collected from the online survey has undergone statistical analysis in Excel spreadsheet while the researcher has made use of qualitative data analysis approach in analyzing the data that are collected by the interview process.
For the online survey, 50 respondents were chosen who have some experience in the sector of SCM. Majority of the research respondents of the survey is found to be male.
The respondents further provided data about their age and experience. No such respondents are chosen for the survey who has no idea about the use of ERP in Supply chain management.
The picture below represents the experiences of the respondents in the SCM field.
The above picture indicates that majority of the respondents has atleast 2-5 years of in the field of ERP in SCM. Thus, the data collected for the research project is found to be legitimate. Based on the responses of the survey respondents that are chosen on basis of probability sampling method, a regression analysis is done for understanding the correlation between the ERP system and SCM.
The data analysis techniquechosenfor the research study is segregated into two parts, quantitative or statistical analysis of the data collected from surveys and qualitative analysis of data that is collected from interviews. A set of questionnaires are used to collected data from the respondents of the survey wile certain subjective questions were asked in the interview process. For identifying the role and usage of ERP system in SCM, both survey and interview method is found to be appropriate. The following section analyses the data collected from survey and interview.
The collected data from the online survey that is conducted has undergone statistical data analysis. Correlation and regression is done on the collected data forindentifying the relationship between ERP and SCM. The results of the survey have been statistically analyzed in order to understand the correlation between usage of ERP system and SCM. Apart from that, an interview has been conducted for identifying the role of ERP system in SCM.
The respondents were asked to opine about the usage of ERP system in SCM. It is observed that all a major group of respondents have agreed to the fact that integration of supply chain management with ERP helps in management of complex supply chain management process. The figure below represents the responses that have been collected from the survey.
The above figure indicates that a major group research participanthas agreed on integration of ERP system with SCM can considerably help in management of complex SCM processes. Out of 50 respondents, 22 respondents have agreed to the fact that integration of ERP with SCM is indeed beneficial.
The respondents were asked to opine about whether the smooth operation of SCM is possible with the integration of the same with ERP. The result suggest that a major group of respondents has agreed to the fact that ERP helps in smooth operation of supply chain management. The figure below indicates the responses of the respondents of survey regarding the use of ERP in enforcing smooth operation in Supply chain management.
Since a large part of the research respondents strongly agreed or agreed to the information that smooth operations of SCM is possible, it can be said that the usage of ERP has a positive effect on the SCM.
The respondents of the research were asked to provide their opinion about the usageof ERP in integration of all the operations and work processes associated with supply chain management and whether it helps in decision making. Majority of the research respondents have accepted the fact that the usage of ERP can help in management and integration of differentbusinessprocesses relatedto supply chain management. The figure below indicates the responses of the respondents that are collected from the online survey.
The figure above indicates that a large group ofresearch respondents have agreed to the provided information that use of ERP in supply chain management will help in better management of the business operations which in turn helps in decision making.
The respondents of the research were asked to provide their opinion about the usage of ERP in maintenance of all the work processes relatedto supply chain management. A major group of respondents have provided their support to the fact that the use of ERP helps in maintaining all the work processes associated with SCM. The figure below indicates the responses of the respondents
Since amajor group of respondents have agreed to the information that ERP will be used for maintaining the different work processes, it can be said that ERP has a positive impact on business based on supply chain management.
As it is established that the use of ERP can help in easier management of the business processes and has a number of advantages in supply chain management, the research respondents of the survey were asked to opine whether the management needs to make use of modern technology for integration of ERP with Supply chain, majority of the respondents have provided a positive response. The figure below represents the responses that are collected.
From the figure above it is clear that management needs to make use of modern technology in integration of ERP with supply chain management.
The respondents were further asked to offer their opinion whether the usage of ERP in supply chain management is likely to increase over the next few years. According to the responses, it can be indicated that the use of ERP will be increasing in the next few years. The figure below represents the responses of the survey in chart form.
The respondents have provided a positive response towards the increase in integration of ERP with SCM. This further indicates that gradually, the management of supply chain will require the use of enterprise resource planning system. Thus, it can be commented that usage ofERP system has a large impact on supply chain management.
The respondents were asked to provide their views regarding the risks associated with supply chain management. A major group of respondents have agreed to the fact that there are certain technological risks related to the integration of ERP system and SCM.
The above figure indicates that 24 respondents out of 50respondents agreed to the fact that there are certain technological risks associated with the use of supply chain management and ERP.
After collection of the data regarding the risks associated with the integration of ERP in SCM, the respondents of the research were asked whether the use of modern technological solutions can help in mitigation of these risks. The responses are illustrated in the figure below-
The above figure indicates that the use modern technological solutions can contribute in mitigation of the various risks related with the use of ERP in SCM.
These collected data has undergone statistical analysis of regression, which will be discussed in results and discussion chapter. Apart from the online surveys, the data is collected from interviews as well. The result of the interview is discussed in the following section.
An interview had been conducted with 5 respondents regarding the ERP’s role in supply chain management. The respondents at first were asked about the impact of ERP in supporting the SCM. All the respondents have provided a similar view. The respondents indicated that the use of ERP in supply chain has a vital role in SCM.The ERP system provides the managers with the capability of managing the complex processes associated with a business. Thus, majority of large business organization mainly make use of ERP in management of the complex organizational processes in supply chain management. However, one interviewer have discussed about the issues that small organization might face while integration of supply chain management with ERP. This is mainly because integration of ERP with supply chain management is quite costly.
The respondents of the interview were asked to opine whether the use of ERP is important in supply chain management. All the respondents have provided similar views regarding the importance of ERP in SCM. The ERP integrationwith SCMhelps in better manufacturing and distribution of the business in gaining greater visibility of the major operations related to research. Furthermore, the use of ERP helps in effective decision making and it is one major reason behind the usage of ERP in supply chain management. The use of ERP is associated with the increase of the speed and overall efficiency of the business operations thereby increasing the customer’s satisfaction. Thus, it can be said that ERP has a positive impact in supply chain management.
The respondents of the interview were asked to share their views regarding the major reasons that drive the businesses in making ERP’s use in management of supply chain. The respondent said that time and efficiency isa major reason behind the same. The respondents said that ERP mainly make use of integrated business applications that are needed to manage different business activities and functions. The efficiency in decision making process as offered by ERP is a reason behind the integration of ERP in supply chain management. Thus, the use of ERP in supply chain management provide significant benefits such as automation of the entire process, speeding up data processing and less human errors, which in turn helps in management of the critical business processes.
The respondents of the interview were further asked to provide their opinion regarding the issues that business might face in integration of ERP with supply chain management. According to the responses that have been received, it is found out that there are certain technological and budget risks related with the implementation of ERP in SCM. The technological risks interconnected to the integration of ERP with supply chain management can be easily mitigated by choosing a proper technical expert and in by following a planned approach. Apart from that the implementation of ERP is costly that often give rise to budget issues.
The respondents were further asked to offer their views about the processes that help in bettermitigation of the issues and major risks associated with a project. The respondents said that there are no major risks associated with the integration of ERP with supply chain if a planned approach of implementation is followed. ERP is complex software and therefore, accurate time is needed to be allocated for implementation of the same. Therefore, the risk mitigation approach associated with the issues and the risks associated with the ERP integration with supply chain management are quite easier. The integration of ERP with theSCM is quite costly. However, the integration of ERP with SCM provides a number of benefits to the organization that increases the cost effectiveness of the same. Thus, the usage of ERP in supply chain management is beneficial for an organization.
The chapter analyses the data associated with the research that are collected from primary and secondary sources for finding answers to the identified research problem. The statistical data analysis process is followed in analysis of the data. The responses obtained from the interview have undergone qualitative data analysis process. The analysis of both qualitative and quantitative data provesthat ERP has a positive impact in management of supply chain. Analysis of the collected data helped the researcher in finding answers to the identified research question. The data collected from interview proves that use of ERP in SCM helps in efficient decision making.
The results and the discussion chapter is an important chapter of this research study as it discusses the results obtained from regression analysis on the collected data. Primary data has been obtained from the research surveys and interviews. The numerical data obtained from the survey are used for the statistical analysis. At first, a correlation among the collected data is obtained to ensure that ERP has a positive impact on SCM. The correlation analysis and data regression is evaluated in the following sections.
Correlation analysis can be described as a method of statistical evaluation that is used to study the major strength of a relationship between the identified two variables. The two variables in this research study include ERP and supply chain. The data about the correlation analysis in represented in the following table.
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Do you agree that smooth operation of SCM is possible with its integration in ERP? |
Do you agree that ERP helps in management of the complex SCM processes? |
Do you agree that ERP helps in managing and integrating all the business processes related to Supply chain Management which in turn helps in decision making? |
Do you agree that with the integration of ERP with SCM, maintenance of work processes related to SCM becomes easier? |
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Do you agree that smooth operation of SCM is possible with its integration in ERP? |
1 |
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Do you agree that ERP helps in management of the complex SCM processes? |
0.985102 |
1 |
||
|
Do you agree that ERP helps in managing and integrating all the business processes related to Supply chain Management? |
0.958425 |
0.981306 |
1 |
|
|
Do you agree that with the integration of ERP with SCM, maintenance of work processes related to SCM becomes easier? |
0.935857 |
0.921837 |
0.871006 |
1 |
|
Do you agree that management needs to make use of modern technology for integration of ERP with Supply chain? |
Do you agree that integration of ERP with SCM is likely to increase over the years? |
Do you agree that there can be technological risks in integration of SCM with ERP, which are needed to be managed? |
Do you agree that use of modern technology can help in mitigation of the risks associated with SCM and ERP? |
|
|
Do you agree that management needs to make use of modern technology for integration of ERP with Supply chain? |
1 |
|||
|
Do you agree that integration of ERP with SCM is likely to increase over the years? |
0.931872 |
1 |
||
|
Do you agree that there can be technological risks in integration of SCM with ERP, which are needed to be managed? |
0.914323 |
0.869358 |
1 |
|
|
Do you agree that use of modern technology can help in mitigation of the risks associated with SCM and ERP? |
0.919807 |
0.816723 |
0.978957 |
1 |
Table 1: Representing the Correlation
(Source: Data Based)
The statistical analysis of the data obtained from online surveys proves that ERP and supply chain has a positive relationship. The use of ERP considerably helps in management of the complex organizational processes and operations, and therefore ERP has a significant role to play in supply chain management.
The data obtained from the online surveys have further undergone regression analysis which is elaborated in the following section.
Regression analysis is considered to be a powerful statistical method that helps in examining the relationship between the different variable of interest. The regression analysis has helped the researcher in proving the set of hypothesis for the research. The regression analysis of the dependent and independent variable of the research is represented in the following table-
|
SUMMARY OUTPUT |
||||||||
|
Regression Statistics |
||||||||
|
Multiple R |
0.954691 |
|||||||
|
R Square |
0.911435 |
|||||||
|
Adjusted R Square |
0.907666 |
|||||||
|
Standard Error |
0.274562 |
|||||||
|
Observations |
50 |
|||||||
|
ANOVA |
||||||||
|
df |
SS |
MS |
F |
Significance F |
||||
|
Regression |
2 |
36.46195 |
18.23097 |
241.841 |
1.82E-25 |
|||
|
Residual |
47 |
3.543054 |
0.075384 |
|||||
|
Total |
49 |
40.005 |
||||||
|
Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
Lower 95.0% |
Upper 95.0% |
|
|
Intercept |
-0.16698 |
0.130621 |
-1.27835 |
0.207402 |
-0.42975 |
0.095795 |
-0.42975 |
0.095795 |
|
Operations |
0.385392 |
0.053023 |
7.26838 |
3.21E-09 |
0.278723 |
0.49206 |
0.278723 |
0.49206 |
|
Management |
0.648355 |
0.054522 |
11.89158 |
8.96E-16 |
0.53867 |
0.758039 |
0.53867 |
0.758039 |
Table 2: Representing the Regression
(Source: Data Based)
The regression data probe that Integration of ERP in SCM has a positive impact on supply chain. Thus, the hypothesis is proved that the use of ERP on supply chain management has positive impact on business. Therefore, it can be said that ERP system play a major role in management of supply chain as it helps in efficient decision making and further helps in managing the business processes in an efficient manner. The increasing efficiency of the work processes coupled with easier decision making makes ERP system a must need in SCM. The survey responses and the responses from the interviews prove that the one of the major reasons behind the use of ERP in supply chain is organizational decision making. Thus, theuse and ERP adoption in supply chain is expected to increase in the recent years as well.
Conclusion
The research aim was to analyze the role of ERP system in SCM. Accordingly the research is conducted in order to collected evidence regarding the positive impact of making ERP’s use in supply chain management. For conducting a research in a planned way, at first, the objectives and the research question for the research are set. The research has been conducted by collecting primary data from interviews and online survey. The collection of data from the primary sources helped the researcher in getting firsthand knowledge about the subject. The research has been conducted in a planned manner so that the success of the research project is guaranteed. The following section of this chapter discusses the extent to which the researcher was successful to fulfill the objectives of the research and to find answers to the identified research questions
The research aimed in analyzing the ERP’s role in management of supply chain by evaluating its role in operations, management and management decision making. The first research objectivewas identifying the use of ERP system in SCM. From the extensive review of the existing literatureand the analysis of the collected primary data it has been commented that the ERP play a huge role in management of the operations associated with Supply chain. The uses and the major benefits of making use of enterprise resource planning system have been identified in the research study and the factors behind its extensive use are identified as well. Thus, it can be said that the first objective is fulfilled.
The second objective was analyzing the support of ERP in decision making associated with SCM. It is observed that the easier management of all the operations associated with management of supply chain helps the business managers in easier decision making. The data collected from the primary sources prove that the reports generated from SCM help in easier decision making.
The next research objective was evaluation of the role ER in technological advancement of a business. The researcher has identified that the operational benefits offered by ERP helps in management of the supply chain in an efficient manner. However, there are certain risks and issues associated with integration of ERP in supply chain that are needed to be mitigated. It has been identified that correct technological intervention can help in better management of the risks and issues relatedto the integration of ERP and SCM.
The next research objective of the research study to argue the critical success factors associated with the integration of ERP with supply chain. The collected and the analyzed data reveals that one of the major success factor behind the success of integration of ERP and supply chain is the efficiency and the speed that is offered by the same. The integration of ERP with supply chain not only helps the business managers to reduce human errors, it also helps the managers in efficient decision making. These are certain major critical success factors behind the success of technological integration of ERP and SCM.
Therefore, it can be commented that the research study has been successful in fulfilling its major objectives. The use of primary data indicates that valid data sources have been fetched while conducting the research. For accurate analysis of the collected, statistical method of data analysis has been chosen that helped in establishing a correlation between ERP and SCM.
The research identifies the major benefits associated with integration of ERP with Supply chain management. In this context, certain recommendations are made in order to ensure successful integration of ERP with SCM. The recommendations are as follows-
Planning: The successful integration of ERP with SCM is only possible with appropriate planning. Since an enterprise resource planning system is complex software, appropriate planning for its integration with SCM is necessary. The integration should be aligned with the business needs and appropriate time should be allocated for completion of the integration process.
Maintenance: The maintenance of the ERP should be on point so that no operational issues arise in the business. Regular checkup and update of the software is necessary in order to maintain good operating software. Maintenance is one vital need for any operating software as it ensures that the issues associated with a software are rightly addressed. Therefore, appropriate maintenance of ERP software is necessary on a regular interval after its installation and merger with SCM.
These are certain major recommendations associated with the integration of ERP with supply chain, which are needed to be followed for ensuring appropriate usage of the same in SCM.
Although, the research was implemented in a planned manner, the research has a scope of improvement in future as well. The other aspects of the research can be evaluated in future. This research project identifies the benefits of operational integration of ERP with supply chain. In future, the fundamental benefits of ERP and supply chain can be evaluated as well. The benefit of decision making can be worked further. Owing to the time and budget constraint, the research could only cover few aspects of ERP and supply chain. The research could be further improvised by identification of the issues associated with the integration in a broad perspective. The risk mitigation approaches can further be identified and researched upon. Furthermore, the sample size of the research was quite constricted. In future the research can be improvised with a larger sample size to obtain more accurate data.
The research had certain limitation of time and budget, elimination of which can help in researching about the topic on a broader perspective. This was a small scale research for academic purpose. The research topic can be evaluated further with broader sample size so that more accurate data can be gathered. While researching on a broader perspective, the sample size and the number of variables for the research is needed to be increased. A research on a broader perspective can help in better understanding of the dependencies and correlation between the use of ERP in SCM. It is expected that the use of ERP in SCM is expected to increase in future and for that further researchers in this field is necessary. This particular research incorporates the scope of further works in the same topic where the research that has been implemented can work as a base for the research.
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