Implementing Enterprise Resource Planning

Implementing Enterprise Resource Planning

Kijpokin Kasemsap
Copyright: © 2015 |Pages: 10
DOI: 10.4018/978-1-4666-5888-2.ch076
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Enterprise resource planning (ERP) has emerged as one of the major breakthrough information technologies (ITs) that can re-shape the manufacturing industry (Hwang & Min, 2013). ERP is the business application that weaves together all the data within an organization's business processes and associated functional areas (Candra, 2014). With the advent of globalization and the appearance of new forms of organization based on networks of closely cooperating firms, it seems clear that successfully implementing ERP systems will take on an increased significance for the survival, growth, and competitiveness of many small and medium-sized enterprises (SMEs) (Raymond & Uwizeyemungu, 2007). ERP systems are software packages that integrate a number of business processes, such as manufacturing, supply chain, sales, finance, human resources, budgeting and customer service activities (Amalnick, Ansarinejad, Nargesi, & Taheri, 2011) and they can integrate all the data and related processes of an organization into a unified information system (IS) (Garg & Garg, 2013). ERP systems are a set of standardized software and organization-wide database in which all business transactions are entered, recorded, processed, monitored, and reported (Zhang, Gao, & Ge, 2013). Activities involved in development and use of technologies and ERP systems are subject to social, cultural, organizational, technical, and other institutional aspects (Pishdad & Haider, 2013). The use of ERP systems is an efficient method for automating supply chain processes from the production of raw materials to establish relationships with the customers (Haug, Pedersen, & Arlbjørn, 2010). SMEs can create a competitive advantage by being more responsive to change through the use of ERP as a production planning and control tool (Koh & Simpson, 2005). SMEs consider supply chain management (SCM) as operational level task aiming toward short-term profit earnings (Thakkar, Kanda, & Deshmukh, 2012). An extensive review of literature on supply chain issues in SMEs is studied by a number of researchers (Thakkar, Kanda, & Deshmukh, 2009; Singh, Garg, & Deshmukh, 2010). SCM is considered as one of the primary factors in determining the organizational competitiveness (Prajogo & Sohal, 2013) and it is progressively becoming important for SMEs to remain competitive in the supply chain of large enterprises (Thakkar et al., 2012). Developing effective relationships throughout the supply chain is crucial in enhancing a firm's brand equity (Kim & Cavusgil, 2009). ERP solutions are appropriate when a company is seeking the benefits of integration and best practices in the system, and looking for a full range of functionality across the organization (Momoh, Roy, & Shehab, 2010). The implementation of ERP systems in a variety of industrial and organizational contexts has received considerable attention from the academic community (Kaniadakis, 2012). ERP evaluation should extend beyond operational improvements to the more strategic impact of ERP looking at the intangible nature of costs and benefits in organizational, technological, and behavioral aspects (Stefanou, 2001). In addition, ERP implementation has linked to firm performance (Yang & Su, 2009).

Key Terms in this Chapter

Information technology (IT): Set of tools, processes, and associated equipment employed to collect, process, and present information.

Project Management: The body of knowledge concerned with principles, techniques, and tools used in planning, control, monitoring, and review of projects.

Material Requirements Planning (MRP): Computerized ordering and scheduling system for manufacturing and fabrication industries, it uses bill of material data, inventory data, and master production schedule to project what material is required, when, and in what quantity.

Enterprise Resource Planning (ERP): An accounting-oriented, relational database-based software system for identifying and planning the resource needs of an enterprise.

Knowledge: The sum of what is known and resides in the intelligence and the competence of people.

Implementation Plan: Detailed listing of activities, costs, expected difficulties, and scheduled that are required to achieve the objectives of the strategic plans.

Organization: A social unit of people that is structured and managed to meet a need or to pursuecollective goals.

Change Management: Minimizing resistance to organizational change through involvement of key players and stakeholders.

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