Advertisement

Satisfaction with ERP Systems in Supply Chain Operations

  • Michael J. Murray
  • Wynne W. Chin
  • Elizabeth Anderson-Fletcher
Conference paper
Part of the Springer Proceedings in Mathematics & Statistics book series (PROMS, volume 56)

Abstract

A key reason for implementing an enterprise resource planning (ERP) system is the ability it provides an organization to synchronize and automate the flows of material, information and cash through the supply chain. Viewed from this perspective ERP systems can be seen as an enabling technology to achieve better supply chain integration, which should result in better decision making and improved financial performance. Yet much of the debate regarding the value of ERP systems focuses on their implementation costs and the corresponding difficulty measuring the benefits generated by these projects. The significant level of total global spending on ERP systems—estimated currently at $253.7 billion —provides the motivation behind this study. We seek to understand how effective these systems are in providing the information needed by decision makers in production and operations management roles. This is a necessary step in determining what benefits can be achieved by these systems. To do this we developed surveys through a compilation of several pilot interviews with plant managers and production supervisors in various industries. For both of these management roles, functional areas under their responsibility were identified and questions were formulated to assess: (1) the usefulness of various functionalities of the ERP system within the manager’s functional area and the manager’s opinion of the effectiveness of the ERP system in that area, and (2) the manager’s opinion of ERP performance in a functional area and his/her overall satisfaction with the ERP system. We used Partial Least Squares (PLS) methodology to analyze the responses from the survey. The results indicate that the majority of plant managers use ERP systems in manufacturing, cost control, inventory & logistics activities and in reporting, as if they were still using MRPII (Manufacturing Resource Planning) systems. They do not seem to be making use of the additional capabilities that ERP systems have over and above those found in MRP II systems. Production supervisors appear to be using ERP systems more evenly across their areas of responsibility. For production supervisors, as in the case of plant managers, reporting is the area where ERP performance has the highest impact on overall satisfaction of the user with the ERP system. Finally, the results indicate that there are several avenues for improvement in the way the current ERP systems support daily operations of these professionals, most notably in the area of analytics and providing better business intelligence.

Key words

Enterprise systems Supply chain management Data analytics Business intelligence Empirical research methods 

Notes

Acknowledgements

The authors wish to thank Sukran N. Kadipasaoglu who contributed to the survey design and collected the data for this research.

References

  1. [1]
    K. Amoako-Gyampah and A.F. Salam, “An extension of the technology acceptance model in an ERP implementation environment,” Information & Management, 41, pp.731–745, 2004.CrossRefGoogle Scholar
  2. [2]
    W. W. Chin, “How to write up and report PLS analyses,” In V.E. Vinzi, W.W. Chin, J. Henseler, and H. Wang (Eds.), Handbook of Partial Least Squares Concepts, Methods and Applications, pp.650–690, 2010.Google Scholar
  3. [3]
    S.W. Chou and Y.C. Chang, “The implementation factors that influence the ERP (enterprise resource planning),” Decision Support Systems, 46, pp.149–157, 2008. 310 M.J. Murray et al.CrossRefGoogle Scholar
  4. [4]
    C. Fornell and F.L. Brookstein, “Two structural equation models: LISREL and PLS applied to consumer exit-voice theory,” Journal of Marketing Research, 19, pp.440–452, 1982.CrossRefGoogle Scholar
  5. [5]
    G002E Gartner, “Market Trends: Enterprise Software Markets Are Shifting From Bricks and Mortar to ’BRIC and Mortals’ Worldwide,” 2011.Google Scholar
  6. [6]
    K.B. Hendricks, V.R. Singhal, and J.K. Stratman, “The impact of enterprise systems on corporate performance: A study of ERP, SCM, and CRM system implementations” Journal of Operations Management, 25, pp.65–82, 2007.CrossRefGoogle Scholar
  7. [7]
    L.M. Hitt, D.J. WU, and X. Zhou, “Investment in Enterprise Resource Planning: Business Impact and Productivity Measures” Journal of Management and Information Systems, 19, pp.71–98, 2002.Google Scholar
  8. [8]
    F.R. Jacobs and E. Bendoly, “Enterprise resource planning: Developments and directions for operations management research,” European Journal of Operational Research, 146 pp. 233–240, 2003.CrossRefzbMATHGoogle Scholar
  9. [9]
    R.C. MacCallum and M.W. Browne, “The use of causal indicators in covariance structure models: Some practical issues,” Psychological Bulletin, 114 pp.533–541, 1993.CrossRefGoogle Scholar
  10. [10]
    F.F.H. Nah, X. Tan, and S.H. Teh, “An empirical investigation on end-users’ acceptance of enterprise systems,” Information Resources Management Journal, 17 pp.32–53, 2004.CrossRefGoogle Scholar
  11. [11]
    C. Ranganathan and C.V. Brown, “ERP investments and the market value of firms: Toward and understanding of influential ERP project variables,” Information Systems Research, 17 pp.145–161, 2006.CrossRefGoogle Scholar
  12. [12]
    P.B. Seddon, C. Calvert, and S. and Yang, “A multi-project model of key factors affecting organizational benefits from enterprise systems,” MIS Quarterly, 34 pp.305–328, 2010.Google Scholar
  13. [13]
    T.M. Somers, and K.G. Nelson, “The impact of strategy and integration mechanisms on enterprise system value: Empirical evidence from manufacturing firms,” European Journal of Operational Research, 146 pp.315–338, 2003.CrossRefzbMATHGoogle Scholar
  14. [14]
    Y.-F. Su and C. Yang, “A structural equation model for analyzing the impact of ERP on SCM,” Expert Systems with Applications, 37 pp.456–469, 2010.CrossRefGoogle Scholar
  15. [15]
    Q. Tu, “Measuring organizational level IS usage and its impact on manufacturing performance,” In. Proceedings of the Eighth Americas Conference on Information Systems, Dallas, TX pp. 2188–2194, 2002.Google Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Michael J. Murray
    • 1
  • Wynne W. Chin
    • 2
  • Elizabeth Anderson-Fletcher
    • 1
  1. 1.University of HoustonHoustonUSA
  2. 2.Department of Decision and Information Systems, C. T. Bauer College of BusinessUniversity of HoustonHoustonUSA

Personalised recommendations