The Impact of ERP Systems and Supply Chain Management Practices on Firm Performance: Case of Turkish Companies
Authors: Huseyin Ince, Salih Zeki Imamoglu, Halit Keskin, Aliekber Akgun, Mehmet Naci Efe
Published in: Procedia – Social and Behavioral Sciences 99 (2013) 1124 – 1133
Conference: 9th International Strategic Management Conference
Introduction
In today’s competitive business environment, Enterprise Resource Planning (ERP) systems and Supply Chain Management (SCM) practices are crucial for enhancing firm performance. These tools help streamline business processes, improve information flow, and increase operational efficiency. This study explores the impact of ERP systems and SCM practices on firm performance in Turkish companies, revealing their contributions to competitive advantage.
The Role of SCM Practices
Supply Chain Management (SCM) is vital for maintaining competitive advantage and improving firm performance. SCM aims to reduce costs, integrate production and distribution systems, and enhance customer satisfaction. It involves managing information flow, goods, and services within and between firms, establishing strong ties between suppliers and customers.
Key aspects of SCM include:
- Strategic Supplier Partnerships: Long-term collaborations with suppliers to ensure high-quality products and innovation.
- Customer Relationship Management (CRM): Developing long-term relationships and improving customer satisfaction.
- Information Sharing: Efficient exchange of accurate and timely information among partners to reduce uncertainty and improve decision-making.
SCM practices positively impact organizational performance by enhancing flexibility, efficiency, and customer satisfaction.
The Role of ERP Systems
ERP systems integrate various business processes, enabling firms to create synergies with business partners and meet customer requirements. ERP systems manage production planning, supply chain operations, sales, distribution, accounting, and customer service, providing a unified platform for information sharing.
Advantages of ERP systems include:
- Normalization of firm procedures
- Integration of facilities and data
- Automation of trading processes
- Increased flexibility and efficiency
- Reduction in employee numbers
- Strengthened globalization efforts
ERP systems, when integrated with SCM practices, offer a competitive edge and improve organizational performance.
Hypotheses Development
The study proposes several hypotheses to explore the relationships between SCM practices, ERP systems, competitive advantage, and firm performance:
- H1: SCM practices positively impact competitive advantage.
- H2: SCM practices positively impact firm performance.
- H3: ERP systems positively affect firm performance.
- H4: ERP systems positively affect competitive advantage.
- H5: Competitive advantage positively impacts firm performance.
Methodology
The study surveyed 138 Turkish companies, analyzing data using Structural Equation Modeling (SEM) to test the proposed hypotheses. The survey included measures for SCM practices (strategic supplier partnership, customer relationship, information sharing), ERP systems (system quality, information quality, system use, individual impact, organizational impact), competitive advantage, and firm performance.
Findings
The findings support most of the hypotheses:
- SCM practices significantly enhance competitive advantage and firm performance.
- ERP systems positively impact firm performance but do not directly affect competitive advantage.
- Competitive advantage does not significantly impact firm performance in this study.
Discussion and Conclusion
This research highlights the importance of SCM practices and ERP systems in improving firm performance and achieving competitive advantage. Managers should focus on adopting effective SCM practices and integrating ERP systems to streamline operations, reduce costs, and enhance customer satisfaction.
The study offers practical tools for evaluating SCM practices and ERP systems, emphasizing the need for strategic partnerships, efficient information sharing, and customer relationship management to stay competitive in the market.
By integrating SCM and ERP systems, firms can achieve significant performance improvements and sustain their competitive advantage in the long run.
References:
- Akkermans, H.A., et al. (2003). The impact of ERP on supply chain management: Exploratory findings from a European Delphi study. European Journal of Operational Research, 146(2), 284-301.
- Botta-Genoulaz, V., et al. (2005). A survey on the recent research literature on ERP systems. Computers in Industry, 56(6), 510-522.
- Chen, I.J., & Paulraj, A. (2004). Towards a theory of supply chain management: the constructs and measurements. Journal of Operations Management, 22(2), 119-150.
- Li, S., et al. (2006). The impact of supply chain management practices on competitive advantage and organizational performance. Omega, 34, 107-124.
