Rocky Relationships: Enterprise Resource Planning and Supply Chain Management

In the past decade, supply chain management (SCM) and logistics leaders have increasingly looked to information technology tools to enhance performance. Implementation of enterprise resource planning (ERP) information systems has been the common choice for organizations to integrate enterprise-wide processes. ERPs have been advertised as an application that improves business processes and develops visibility across the organization. However, there is concern about the effectiveness of ERP capabilities in improving supply chain processes. This exploratory study examines perceptions regarding the success and effectiveness of ERP installations on supply chain management, with a focus on the post-implementation phase. Five main ideas emerged from this study: 1) ERP systems lack the functionality to effectively manage the entire supply chain. 2) There is a “black hole” in the supply chain, which ERP systems are currently unable to handle, that prevents organizations from achieving the transparency and improved logistics they desire. 3) Supply chain management is often given little consideration during the ERP implementation phase, leaving functionality gaps and supply chain inefficiencies. 4) The inability for ERP systems to effectively manage the supply chain is a source of frustration for supply chain management but has little impact on perceptions of ERP success at the organizational level. 5) The most successful implementations involve trust, communication, and collaboration between individuals involved in the implementation, including supply chain management.