Impact of Enhanced Enterprise Resource Planning (ERP) on Firm Performance through Green Supply Chain Management

Abstract

This study investigates the impact of enhanced enterprise resource planning (ERP) on firm performance through green supply chain management, supplier integration, and internal integration. The population is the manufacturer domiciled in East Java, Indonesia, which has implemented ERP and been certified by the International Organization for Standardization (ISO) in the environmental management system. Data collection used a questionnaire designed with the five-point Likert scale. Of 243 manufacturers, 150 questionnaires were distributed, and 135 questionnaires are considered valid for analysis. Data analysis used smart PLS software. The result indicated that all eight predetermined hypotheses were supported. Enhanced ERP affects supplier integration, internal integration, and green supply chain management. Internal integration affects green supply chain management and firm performance. Supplier integration affects green supply chain management and firm performance. Green supply chain management affects firm performance. An interesting finding is that green supply chain management, internal integration, and supplier integration mediate the effect of enhanced ERP on firm performance. This study’s novelty lies in the research model that analyzes the relationship between the four constructs simultaneously with the green supply chain management, internal integration, and supplier integration as a mediating variable. The research provides an insight for the manager on how to improve the firm performance in supply chain management. This study could also contribute to the current research in supply chain management.