Competing in the 21st century supply chain through supply chain management and enterprise resource planning integration

Abstract

PurposeTo investigate the integration of supply chain management (SCM) and enterprise resource planning (ERP) systems for competing in the twenty‐first century supply chain.Design/methodology/approachA case study with a paper manufacturing company in China is conducted. Primary data is collected through interviews with managers of the company. The reengineering activities and processes, and the soft issues of supplier relationship are examined.FindingsBreaking the traditional decentralised system and introducing the concept of a single, integrated plan, which a company could work together with their suppliers has led to cost reduction, lead‐time reduction, improved visibility, reduced time to market, and increased efficiency in the company.Research limitations/implicationsThis research is based on a single case study in process manufacturing industry in China, which perhaps limits its usefulness elsewhere.Practical implicationsOne should not rely solely on ERP systems for managing their supply chain. Individual company should look at an effective purchasing function as one of the competencies essential to supply chain success.Originality/valueERP systems in the case company address only a subset of SCM needs. ERP's main added value is its combination of financial control with multi‐facility coordination, but ERP does not deliver supply planning and demand planning functionality for the company. The systems are not designed to support internal supply chains. However, integration of SCM and ERP gives the company the opportunity to build effective processes with suppliers they trust, so they can get the maximum return on relationship with all their suppliers on a continuous basis.