The Benefits of ERP in Supply Chain

The Benefits of ERP in Supply Chain 0
Title: The Benefits of ERP in Supply Chain
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The Benefits of ERP in Supply Chain 1
Benefits of ES in Supply Chain
The digitalization of the business functionalities from marketing to sales, finance to
operations and human resources has shown high dependencies on Enterprise Resource Planning
(ERP) systems. The ERP and SCM (Supply Chain Management) have become the integral part
of interplay which exists in multinational firms. The ERP as a dominating technology system is
moving towards the next future generations. The influential SCM forces are identified and
studied with interesting aspects of inter-linkage which co-exists between the business and
technology. To address the fundamental implications of ERP on supply chain management have
been intricately explored.
The supply chain management process starts with a customer and integrating of the ES
systems across employee hierarchies.
1. Improved Customer Service-The need of making timely decisions exerts pressure on
firms to implement ERP systems. A case study of successful implementation of ERP
system in organizations has been studied. This is given by Jaehoon Whang, Kijoo Kim
and Moon-Bong Lee (Whang, Lee and Kim, 2018). Typical benefits include adoption of
global standards and identification of critical issues. SAP is an all-inclusive leader of
ERP systems which reports more than 60 percent of multinational firms have
implemented ERP systems and the market is annually grown by 50 percent in past two
decades. The factors which are critical for the implementation of ERP in a firm are-
Customization history, internal communications and role redefinition of IT departments.
For instance-the multinational firms like Dell Computers and Hershey Foods have
undergone complications in implementing the ERP systems. The SAP firm advocates the
need of having a clear and concise goal statement and providing manual training to the

The Benefits of ERP in Supply Chain 2
employees. Another group of companies which have suffered major problems in up-
gradation of ERP systems is Korean companies. The firms need to procure a valid license
and do not miss on any strategic opportunity (Akagic and Hodzic, 2014).
2. The Automation of Workflow-The multinational firms need to recognize the
importance of automated workflow within the different hierarchical systems existing
within an enterprise. A case study on Nike-The ERP and SCM implementation shows a
transition from failure to success. The significance of automated workflow has been
emphasized with relevance to implementation of standardized supply chain software
within the company. The project undertaken by Nike, Inc. was targeted at reducing the
amount if raw materials like rubber amount. The multinational firms had more than 1,
00,000 product varieties and requires a high level of modification and data management.
The Nike Company went ahead with its traditional legacy systems rather than
upgrading as ERP project. The company suffered with inefficiencies in database
management and sales went down. The company needed to determine the complications
arising due to the implementation of CRM and ERP systems. The flaws in the
configuration of ERP system could have been eliminated by adequate testing and third
party approach. The company underwent transition from failure to success in upgrading
the components of ERP systems such as material management, sales and distribution,
procurement management. The company registered increased profit forecasting in next 6
months (Kang and Kim, 2017).
The Role of ERP in Supply Chain Management
A growing number of startups have started reaping the benefits of ERP systems. The
supply chain management involves interaction of firms with numerous suppliers in order to