This article evaluates the perception of executives working in the area of supply chain management and ERP towards the role of ERP in improving supply chain effectiveness.The study is conducted on about 20 executives working with the automobile, tyre manufacturing and pharmaceutical firms. Findings from this exploratory study are twofold. First, the main finding of experts/SCM members' experiences is that, ERP positively contributes towards some parameters of supply chain effectiveness. The second finding of this study has emerged as some limitations of the current ERP system and do not contribute in supply chain effectiveness.
Supply
chain management has been defined as the art of managing
the flow of materials and products from source to user as
well as the related flow of information, and finds that
it records and controls materials management. Supply chain
is the sum total of all the activities arrived at fullfilling
the customer's request. It consists of all people who are
involved in fullfilling the customer's request, profitably
right from the supplier to the retailer (Capcino, 1998).
Automobile firms in the 1970s and 1980s often tied vendors
and retail outlets together to gain production efficiency.
Today, computer technology makes it possible to obtain many
benefits through coordination across organizations. With
the advent of ERP system, working with the communication
technology, the efficiency of supply chain management has
increased. Markets are becoming more transparent, customer
friendly (Pepper and Rogers, 1999; Jensen, 1999) and in
general, the rate of change in the business world is increasing
(Brown and Eisenhardt, 1998 Gleick, 1999). The most important
thing to motivate manufacturing firms to implement ERP has
been to improve interaction with the suppliers and customers
(Mabert et. al, 2000). Thus, ERP has a role in supporting
supply chain activities.
In
the present scenario, supplying defect free products is
not the competitive advantage but is a requirement to make
place in the market (Bowersox and Closs, 1996). They argued
that to be effective, firms must expand their integrated
behavior to incorporate customers and suppliers. For planning
and monitoring processes, information should be shared among
channel members (Ellram and Cooper, 1993). Effective supply
chain also requires mutual sharing of channel risks and
rewards that yield a competitive advantage (Ellram and Copper,
1998). Effective management of supply chain requires conscious
management of factors influencing inventory requirement,
policies and procedures that control the movement and storage
of inventories on SCM and customer service (Bhakar et
al., 2002). Further, they argued that organizations
should improve SCM orientation to achieve supply chain effectiveness. |