Assessing the impact of ERP on supplier performance

Abstract

PurposeThrough an empirical study, this paper identifies a multitude of drivers that facilitate or hinder the implementation of enterprise resource planning (ERP) in business environments. Also, the purpose of this paper is to analyze its role in supply chain operations and assesses its impact on supplier capabilities and performances from supply chain perspectives.Design/methodology/approachBased on both a contingency theory and a resource‐based view (RBV) of the firm, the research develops a series of hypotheses regarding the use of ERP for strategic sourcing. A large‐scale survey of Korean manufacturers and their suppliers was conducted. A structural equation model was used for data analysis.FindingsThe firm's external environment (EE) has little influence on its decision to adopt and implement ERP. However, through the mediating role of an internal environment (IE), an EE still indirectly influences the ERP adoption and ERP implementation (ERPI) decision. Also, the paper found that ERP could enhance the ERP adopter's supplier capability (SCAP).Originality/valueThis study investigates the role of ERP in the supply chain and identifies important determinants influencing the ERP adoption and implementation decisions. Especially, this paper assesses the benefits of ERP from the ERP adopter's supply chain partner's standpoints.