The relationship between ERP system and supply chain management performance in Malaysian manufacturing companies

Abstract

Purpose -This research aims to improve supply chain management performance through the successful usage of ERP system. This can be through investigating the relationship between enterprise resource planning (ERP) system and supply chain management (SCM) performance in the context of Malaysian manufacturing companies that use ERP system. Design/methodology/approach -The questionnaire survey was posted to the Malaysian manufacturing companies that are using ERP system in order to investigate the relationship between ERP system and SCM performance. The respondents of this study were the MIS or IT executives. A total of 80 usable responses were received and used in the analysis. Findings -The findings of this research indicated that there is a positive and significant relationship between ERP system i.e. (integration, material management, production planning, and controlling), and SCM performance. The workflow management, however, does not have a significant relationship with SCM performance. The findings of this study imply that the successful implementation and the effective usage of ERP system can contribute toward enhancing supply chain management performance in many ways such as, integration of internal business processes, enhancement of information flow among different departments inside the company, improvement of the company's relationships and collaboration with outsourcing suppliers, customers, and supply chain partners. Research limitations/implications -This research focuses only on post-implementation of ERP system life cycle, where ERP system passes through three implementation stages of system life cycle and that includes pre-implantation stage, implementation stage, and finally post-implementation stage. Two or three stages of ERP system life cycle could be investigated simultaneously. Practical implications -There should be many success records in ERP system and this is to prove to companies that ERP systems can contribute toward improving their overall business performance. Therefore, this research encourages companies to adopt ERP systems and then contribute to technology diffusion. The finding of this study supports this justification and records a new success of ERP systems in Malaysian manufacturing companies. Originality/value -The results of this study will enable companies to achieve optimum usage of ERP system after the implementation stage and help to avoid system failure and achieve better SCM performance. The study contributes toward technology diffusion between companies through reducing the likelihood of ERP systems failure, and therefore introduces ERP systems to other manufacturing companies in Malaysia.

Investigating the mediating role of information sharing strategy on agile supply chain

“…Superior IT integration advances the capability of supply chain systems (Angeles, 2009). Electronic Data Integration (EDI), is one such application which enables quick sharing of huge information and decreases ambiguity, intensifies supplier shipment performance and boosts supply chain system performance (Shatat & Udin, 2012). Ability of an organization to respond quickly to the dynamic needs of market becomes easier through a well-organized flow of information sharing.…”

Impact of Supply Chain Management on the Relationship between Enterprise Resource Planning System and Organizational Performance

“…There are many academic studies that confirm the existence of a significant relationship between ERP and SCM performance (Akkermans et al, 2003;Shatat & Udin, 2012;Su & Yang, 2010a, 2010b. Furthermore, these researches have attempted to determine the way different ERP modules can be integrated into SCM for planning, execution and control of items, materials, operations, and resources (Ho, 2007;Koh et al, 2006).…”

Impact of Supplier Relational Capital on Supply Chain Performance in Pakistani Textile Industry

“…Communication of firms with stakeholders improves during the post-ERP implementation phase, which helps raise relational capital. Also, Saleh and Mohamed (2012) argue that ERP implementation strengthens relationship with suppliers so as to help reduce inventory holding, procurement and logistics costs.…”