The Role of Top Management Commitment to Enhancing the Competitive Advantage Through ERP Integration and Purchasing Strategy

Abstract

The role of the top management commitment is in enhancing the competitive advantage through ERP integration and the purchasing strategy. Data were collected using questionnaires from 49 manufacturing companies domiciled in the region of East Java, Indonesia. PLS technique was used to analyze the data. The result of the study indicated that top management commitment influences ERP integration and the purchasing strategy, top management commitment influences the competitive advantage, ERP integration affects the purchasing strategy, and ERP integration and purchasing strategy influences the competitive advantage. One of the most exciting findings revealed that ERP integration and purchasing strategy mediated the influence of top management commitment on the competitive advantage. Top management influences, directly and indirectly, the competitive advantage. This result provides the managerial implication that the management needs to establish an ERP integration and define a proper purchasing strategy in enhancing the competitive advantage of the manufacturing company.

Impact of Internal Integration, Supply Chain Partnership, Supply Chain Agility, and Supply Chain Resilience on Sustainable Advantage

“…Items determine SC partnership in the form of trust between the company and its suppliers, i.e., the customer is certain that the information submitted by the supplier is true and accurate, and the supplier fulfills the promises that have been made and provides the best assessment for the company that it can rely on [36]. Strategic purchasing, determined by the company through conducting longterm contracts and jointly making long-term plans, affects its competitive advantage [26]. Supplier innovativeness is one of the impacts of SC partnerships to develop suppliers.…”

“…The competitive advantage that a company has is different from the company's performance, but competitiveness is the obtained results from the continuous performance that has been achieved [44]. The sustainable advantage is the company's long-term competitiveness that has been recognized by customers, accepted by the market, and able to compete with competitors' products [26]. Companies are always trying to produce new products or redesign new products and redesign the roles of supply chain components in determining inventory and customer needs to improve operating performance and have a continuous competitive advantage [39].…”

“…The supplier-buyer relationship enhances collaboration and improves organization agility [23]. The strategic partnership with external partners impacts the company's operational performance and competitive advantage [24][25][26]. The implementation of SC agility requires managers to know when to invest in resources, how much to invest, and where to invest in the supply chain flow to achieve improved performance [27].…”

The Influence of Management Commitment towards Business Performance through Supply Chain Management and Customer Relationship Management

“…Top tier management commitment refers to the pressure from the top tier manager on the development of organization's abilities. Top management commitment is determined as an effort to involve and support companies that support company's targets ( (Suárez, 2016, Tarigan et al 2020. Management recognition from an attachment perspective or identification of employees where they work (Johari et al 2019).…”

“…Modern evaluations from the SCM practices consisting of partnerships with suppliers, outsourcing process, cycle time compression, process flows continuity or technology or information using quality purchasing and relationships between customers are defined as a set of activities done by organization to promote an effective supply chain management. Supply-based management refers to how companies make use of supplying process, technologies, and their ability to enhance supply chain performance and its competitive advantage and how manufacturing, logistical, material, distribution and transportation functions are coordinated in an organization (Tarigan et al 2020). SCM practices are also defined as an approach that is applied in running integration and supply demand coordination and the relation to satisfy customers in effective and profitable ways (Gandhi et al 2017).…”