The impact of ERP on supply chain management: Exploratory findings from a European Delphi study

Abstract

This article presents results from a Delphi study on the future impact of enterprise resource planning (ERP) systems on supply chain management (SCM). The Delphi study was conducted with 23 Dutch supply chain executives of European multi-nationals. Findings from this exploratory study were threefold. First, our executives have identified the following key SCM issues for the coming years: (1) further integration of activities between suppliers and customers across the entire supply chain; (2) on-going changes in supply chain needs and required flexibility from IT; (3) more mass customization of products and services leading to increasing assortments while decreasing cycle times and inventories; (4) the locus of the driver’s seat of the entire supply chain and (5) supply chains consisting of several independent enterprises. The second main finding is that the panel experts saw only a modest role for ERP in improving future supply chain effectiveness and a clear risk of ERP actually limiting progress in SCM. ERP was seen as offering a positive contribution to only four of the top 12 future supply chain issues: (1) more customization of products and services; (2) more standardized processes and information; (3) the need for worldwide IT systems; and (4) greater transparency of the marketplace. Implications for subsequent research and management practice are discussed. The following key limitations of current ERP systems in providing effective SCM support emerge as the third finding from this exploratory study: (1) their insufficient extended enterprise functionality in crossing organizational boundaries; (2) their inflexibility to ever-changing supply chain needs, (3) their lack of functionality beyond managing transactions, and (4) their closed and non-modular system architecture. These limitations stem from the fact that the first generation of ERP products has been designed to integrate the various operations of an individual firm. In modern SCM, however, the unit of analysis has become a network of organizations, rendering these ERP products inadequate in the new economy.