Analysis of Enterprise Resource Planning and Retail Supply Chain

This report delves into the significance of Enterprise Resource Planning (ERP) and its implications in the contemporary business landscape. It begins by defining ERP and outlining its core concepts, followed by an in-depth examination of its key characteristics, including flexibility, open modules, comprehensiveness, online connectivity, suitable business practices, multiple facilities, strategic planning, optimization of data, managing projects, and automatic functions. The report then shifts its focus to the retail supply chain, identifying the reasons behind transformation failures within this sector, such as slow progress, a lack of innovative thinking, and structural inefficiencies. The analysis includes a case study of the departmental store Myer, examining its ERP system and the challenges it faces. Finally, the report proposes recommendations for improving retail supply chain management, offering valuable insights for businesses seeking to optimize their operations and achieve sustainable growth. This report is a comprehensive analysis of ERP and its impact on the retail industry.

Running head: ENTERPRISE RESOURCE PLANNING
Enterprise Resource Planning
Name of Student
Name of University
Author Note

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Table of contents
Introduction................................................................................................................................2
Concept of Enterprise Resource Planning..................................................................................2
Characteristics of ERP...............................................................................................................3
Reasons for failure of retail supply chain transformation..........................................................6
Business model related to ERP..................................................................................................8
Recommendation......................................................................................................................11
Conclusion................................................................................................................................12
Reference..................................................................................................................................13

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Introduction
The purpose of the assignment is to analyse the importance of enterprise resource
planning and the implications of it in the modern world. A particular topic regarding
enterprise resource planning and its concept are identified. Enterprise Resource Planning
(ERP) is a management tool used for understanding complex business processes. It is
typically used for all management purpose in order to identify the processes that take place in
an organisation. The assignment focuses on the characteristics of ERP along with its
application in the modern world. The topic for the assignment is the reasons behind the
failure of a retail supply chain. Relevant models are identified and recommendations are
provided for improving the retail supply chain. In order to complete, the assignment the
departmental store Myer is analysed along with its ERP system.
Concept of Enterprise Resource Planning
According to Leon (2014), Enterprise Resource Planning system or ERP is considered
as a management system that is mediated by the use of software and technology. ERP
stretches its use on the various aspects of a business organisation. Activities related to
business are conducted by the application of ERP. It provides an updated view of the
techniques to be used for the success of an organisation. Activities such as planning of
product, manufacturing, marketing, sales and inventory management and so on are included
in the process of ERP. It helps in maintaining a track on the business resources such as a
requirement of raw materials, a capacity of production, orders and balance of an organisation.
One of the biggest advantages of ERP is the fact that it integrates organisational systems and
helps in conducting error-free operations that are useful for the purpose of a business.
However, Esendemirli, Turker and Altuntas (2015) stated that the development of ERP
system is different from the development of the traditional system. Despite this problem, the

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use of ERP has increased in every organisation. Large and small organisations utilise ERP in
order to establish itself in the market.
Figure 1: Business activities using ERP
(Source: Shaul and Tauber 2013)
Characteristics of ERP
After analysing the role of ERP, the characteristics of the system can be easily
identified. The characteristics include:
1. Flexibility- In the modern world, the change in a type of business is done on a regular
basis. This is mainly due to the change of rules, regulations, policies and regional laws
that continuously change the modern business world (Hoch and Dulebohn 2013). In order
to cope up with these changes, it is necessary for every business organisation to remain
flexible and adapt to the changes. Similarly, in the context of ERP, this flexibility needs
to be maintained concerning the changes in the business organisation. The organisations

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need to understand the importance of ERP and change the system as per the requirement
of the business environment.
2. Open module- One of the major characteristics of ERP is the fact that the system is an
open module network. This signifies the fact a backup system is always available in the
case of any technological failure. The error that occurred from one module can be
rectified by the use of another module. This can be done by simply visiting the other
module rather than opening it up. Certain modules that exist in the ERP system can be
opened separately. Modules such as sales management, purchase management, customer
relationship management are some of the examples that can be related to the use of open
modules.
3. Comprehensiveness- According to Tarhini, Ammar and Tarhini (2015), ERP needs to be
comprehensive in terms of its usage. This is required in order to maintain its useful
features in every aspect of the business. The advanced technology can help in coping up
with technological changes that take place in the business world. Most of the activities
that are carried on in an organisation need to be done by the application of ERP. This can
also be used in order to identify the use of ERP and its correct usage in the organisation.
4. Online connectivity- In the modern world, the use of ERP in business is a growing
concept. The application of ERP can be best understood with its connection with online
portals. The online connectivity of the system can help it to maintain communication with
the business organisations. The interaction from one business to other needs to be done on
a regular basis in order to understand the application. The online connectivity needs to be
done in order to gain competitive advantage. It can also help in maintaining the
connection with the customers and identifying the satisfaction of the buyers and sellers.
5. Suitable business practises- According to Chofreh et al. (2014), every business has
certain practices that need to be maintained in order to ensure stability and success. The

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practices are the standards that need to be maintained in order to conduct ethical business
by maintaining the laws. For example, a business having an accounting as the main
function in an organisation need to follow IFRS system in order to maintain the standards
of business. ISO standards are also maintained by businesses that indulge in
manufacturing, marketing, purchasing and selling of products. ERP helps the businesses
to maintain the standards and keep a record in case of any updates that are made in the
standards.
6. Multiple facilities- In the modern day, flexibility is important in order to maintain
stability in the business environment (Jinno, Abe and Iizuka 2017). However, apart from
this, the ability to maintain more than one facility is also important for the success of a
business. Multiple facilities mean the ability to work in various elements using variables
that are unknown in the business sector. For example, a good ERP system needs to have
the ability to work in a business environment that have different currencies, standards and
provide more than one platform of business.
7. Strategic planning- One of the major application of ERP is the use of the system during
strategic planning. This helps in the maintaining comprehensiveness and formulates plans
keeping in mind the advantages of the company. ERP can help in this by setting up an
online system that is capable of searching for information that can help in the success of
the business. Strategic planning is an important aspect of an organisation and the
application of ERP in the system can help in managing the required resources of an
organisation.
8. Optimization of data- Bansal and Agarwal (2015) stated that optimization of data is an
important feature for every business. In order to utilise the resources in an effective
manner, it is required that proper records are kept about the resources. This can help to
utilise the resources to its full potential. ERP helps to maintain a record of these resources

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and reduces the optimization of data based on the cost incurred and the risk factor. The
utilisation of business resources can be maintained in the business. This is also a strategic
management plan that helps in increasing the competitive advantage.
9. Managing project- Issar and Navon (2016) managing projects need sufficient resources
and the ability to maintain communication with every member involved in the project.
The application of a good ERP system can help in the collaboration of team during the
united effort of completing a project. As seen earlier, the use of ERP in online systems
can help in establishing the resources and communication that are needed for a successful
completion of the projects. The project process can be tracked with the application of
ERP system and rectifications can be made.
10. Automatic functions- Modern organisations use an automatic function that can help in
the success of a business. These automatic functions help in measuring the quality of ERP
used in the organisation (Fernie and Sparks 2014). A good ERP system can help in
maintaining the automatic functions such as transactions, interchange of data and e-
Commerce. These functions can help in the proper formulation of data that can help in
maintaining the critical accounts in an organisation.
Reasons for failure of retail supply chain transformation
According to Christopher (2016), a retail supply chain is a process that is involved in
managing the supply chain network of an organisation. The supply chain is a critical
component that is involved in the retail organisation. This includes the delivery of correct
products to the customers on time. The supply chain plays an important part in the outlook of
the entire process. However, in the modern world, a transformation is being taken place that
creates certain trends in the business. These transformations take into consideration certain
factors that play a definitive role in the success of an organisation. However, there have been

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times when the transformation has failed. This mainly occurred due to the growth of
environmental factors that challenge the existence of a business. These factors are essential to
understanding the methods that are necessary for regulating supply chain management system
in an organisation. The decline of change in the business is one of the prime examples of the
failure of transformation in the retail change market. As observed by Stadtler (2015), this
failure has created a sense of distress to many businesses that are involved in the retailing
market.
Most scholars have tried to identify the reasons behind the failure of such
transformation among the retail sector. Some of the reasons that were discovered include the
slow progress in the nature of transformation. Monczka et al. (2015) stated that about 70% of
the retailers fail due to the slow progress of transformation. In the fast moving world, changes
in organisational settings come at a rapid pace. Hence, a business sector like Myer needs to
maintain the changes and ensure that it is embraced quickly in order to avoid any competition
from the market. The new thinking that is required for the effective implementation of ERP
technology lacks in the mind of the people. This creates a problem among the sectors, as the
business needs to remain innovative. It has been observed that the some of the retail sectors
focus more on the organisational model rather than the use of other models that can transform
the context of business (Rushton, Croucher and Baker 2014). The one way to make the ERP
work in the transformation of retail sectors is the thought process of the people. The
employees of Myer need to understand the fact that organisational change based on supply
chain management cannot be done by functional or specific changes.
In the light of this statement, it can be said that retail sectors structure itself differently
than most other business organisations. According to Brindley (2017), the manner in which
these retail sectors are structured is the main reason behind the failure of supply chain
management. The ineffective use of ERP in the supply chain management is because of the

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lack of target customers and its inability to focus on only one particular method. In
comparison to Myers, it can be said that FMCGs and CPGs have a different and successful
structure that can implement ERP. This is mainly because of the fact that these sectors despite
being retail focus more on the satisfaction of the customers. This creates a need for
maintaining records that can help in identifying the responses of the customers. The fulfilling
of demand remains in line with the marketing and sales of the products. This can help in the
proper functioning of the ERP system as the system can be upgraded keeping in mind the
proper utilisation of the systems (Wisner, Tan and Leong 2014).
Hence, it can be said that a comprehensive model of ERP can help in making up the
loss for the retail companies. Another important reason for the failure of the supply chain of
retail companies is the fact that the flow of production is not systematic. Smith (2015) stated
that the wrong production line affects about 50% of the stores. This is mainly because the
production line does not have a systematic flow that can help in the proper utilisation of ERP
in an organisation. The effective use of an ERP model can help in the controlling of the
production line by maintaining proper budgetary schemes in Myers. The next part highlights
a suitable model for the implementation of ERP.
Business model related to ERP
As stated by Ha and Ahn (2014) every organisation sets up a structure that can help
the company to excel. An organisation structure is a root for its success. Without a proper
structure, the implementation of strategies cannot be done effectively. Similarly, retail
organisations also structure itself for the betterment of the production technique and
satisfaction of the customers. However, the organisational structure of Myers has come under
a lot of criticism. This is mainly because the retail organisation does not implement the use of
ERP based on the structure. The importance of customer satisfaction is an important factor

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for any retail store. The use of the new model of ERP can help in the formulation of
organisational models. The structure of Myers can also command the production flow and
work flow in the organisation. In this case, it can be said that a pyramid structure can help in
the proper definition of roles, define job tasks and outline the report of an organisation in the
case of any discrepancies. The use of a proper ERP model can help in the delegation of
authority and designing of the organisation structure (Altamony et al. 2016).
In the light of this statement, it can be said that the use of Supply Chain Operations
Reference (SCOR) model. The model is based on five levels that can help in the effective
application of the ERP system. The first level of the model is based on the planning system. It
provides a comprehensive definition of the plans that need to be done in order to make the
ERP system effective. In this stage, a company manages to establish its supply chain
competitive objective (Kurbel 2016). The first level also includes the sources, method and
delivery process that can be used for the effective application of the ERP system in the
Supply chain management model. Such a process is used mainly for warehouse management
and transportation and delivery infrastructure. This is suitable for an organisation like Myers
that has a private transportation facility. The second level involves the effective use of 26
categories that can be possible to implement in a supply chain management. The advantage of
the process is that organisations can configure the ideal or actual operations using the process
of ERP. This is based more on the source, make and deliver the products. The 26 categories
under which the system can be categorised are based depending upon the demands of the
customers and the organisational objectives. The delivery of products, purchase order,
stocked products is also categorised that can help in future storage of the inventories.
According to Seuring (2013), these categories are essential in order to formulate future
inventory and stock list Myers.

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In order to plan, set and execute the organisational goals, the level three of the model
needs to be utilised. This level signifies the essentials of planning and the ways by which
goals can be set in the organisation. In order to execute the goals, this level provides a
complete overview of the importance of supply chain management in an organisation. Ross
(2013) stated that this is done in order to help in improving the supply chain of an
organisation and improve the ERP system. This also includes setting up of the benchmark,
defining the elements. Identifying the best practice that is suitable for the organisation and the
capabilities required for executing the best practices. In this level, Myers can analyse the
ways by which the plan can be executed. The final level focuses on the implementation of the
actions. This defines a definitive course that is required for implementing actions in the
organisations. The improvement of supply chain management is done in order to improve the
ways by which ERP system can be installed. Beske and Seuring (2014) observed that the
implementation of these actions does not follow a standard protocol. This is because the
action implemented in every organisation is unique and is done for the betterment of the
production. Thus, it can be said that the implementation of the SCOR model can help in
maintaining the ERP system in an organisation.

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Figure 2: Supply Chain Operations Reference (SCOM) model
(Source: Ellram and Cooper 2014)
Recommendation
In order to improve the techniques of Myers in terms of using supply chain
management and ERP system, it is recommended that Myers adopt the basic and ensure that
three important conditions are analysed. One of the conditions includes the change in
organisational structure. The retail organisations need to follow a structure that reflects the
effectiveness of supply chain management. The structure of the organisation needs to be such
that the use of ERP can be well implemented in the company. Retail organisations that have a
supply chain talent and thinking can be effective for success in the future. This also includes
the proper identification of buyers. The buyers and sellers in an organisation need to have
proper coordination required for the implementation of the ERP system. Another important
recommendation is that every transformation that takes place in an organisation need to be

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done keeping in view the scale and depth required for organisational transformation. The
organisation model is a predecessor of the business model that has remained as the
fundamental error in any organisational setup.
Conclusion
Thus, it can be concluded that in the modern day the use of ERP and its
implementation is important for any organisation. For retail sectors, the implementation of
this process can be used for attaining the goals and objectives of the sector. For a company
like Myer, the effective use of ERP system can help in the improvement of the company. It
can leapfrog in the ranks of departmental stores in Australia. Thus, the ERP system is an
important factor without which the supply chain management cannot be determined.

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