This part of the paper will describe whether it is more difficult to change the business processes in order to suit an ERP or to change the culture of an organization. To begin with, enterprise resource planning systems incorporate both internal and external information management across the whole organization and embraces manufacturing, accounting, services, sales and customer relationship management among others. This is automated by a software application whose purpose is to facilitate the flow of information inside the organization’s boundaries and across the business functions that mange all the connections with the stakeholders outside.
An ERP operates in real time without any reliance on periodic updates. It is a common database supporting all the organizational applications the system is installed by the information technology department. The ERP system was initially mandated to perform the functions of the back office that do not affect the customers directly. Changing ERP will include dealing with its components and the IT department directly. This implies a vital change in the working processes of the staff (Kim, 2007).
Enterprise resource planning
Implementing ERP requires some changes in the business processes making it challenging to change. In order to change the business process to suit ERP, the current processes must be linked to the strategy of the organization; there must be an understanding of the automated solutions and analysis of the effectiveness of every process which can easily be done. It may be considerably difficult to implement an ERP in decentralized organizations due to different business rules, processes, and decision centers and data semantics.
This may need moving some business units which may possibly delay integration, hence difficult to change the business process to suit the existing ERP. Organization culture on the other hand is a pattern of basic assumptions developed and shared by a group to cope with the challenges of both the internal and external integration. It can be taught to the new employees and revised periodically. They depend with the situation. Since they are merely assumptions and guidelines, they can easily be changed compared to the ERP due to the notes I have described in the above paragraph.
Changing organization culture only requires an appreciation and acceptance for diversity with equal opportunity for employees. This even makes it easier to change. Therefore, it is more difficult to change the business processes in order to suit an ERP than it is to change the culture of an organization. If an organization is able to achieve total integration of organizational processes through implementation, it would justify the high price tag associated with an ERP system due to the processes involved in achieving the said integration (Bowersox, Closs & Cooper, 2010).
This part will explain management strategies that assist in achieving supply chain coordination while citing a business example for the strategies discussed. Supply chain management operates in three levels namely strategic, operational and tactical level in no particular order. The corporate strategy for managing the supply chain adopted by organizations include management strategies such as the product development strategy, the customer oriented strategy, manufacturer strategy, vendors strategy and the strategy of logistics (Bowersox, Closs & Cooper, 2010).
In the product development strategy, the senior management makes a definition of the strategic goal and direction in consideration of the products that the company is supposed to manufacture and make as an offer to the customer. This also determines the product cycle. In the customer oriented strategy, the company identifies their customers in order to make manufacturing decisions that suit the need of the identified customers. At the manufacturing strategy, manufacturing decisions are made in order to define the infrastructure for manufacturing the products and the technology required. This is based on the forecasts made at the strategic level.
In supplier’s strategy, the management of the company decides on the best strategic policies of the supply chain considering their suppliers. This enables the organization to make a good selection on the best supplier for a given product. Finally, in the logistics management strategy, major decisions on the manufacturing locations are made. The guarantee of the fulfillment of an order is a vital part of the supply chain hence the company management has to make strategic decisions on the networks of the logistics. A good example of business that may suit these strategies are businesses that deal in car assemblies, power mills, manufacturers, whole sellers and even retailers (Kim, 2007).
This part explains why it is of benefit to encourage trust in supply chain relationships and whether there is a possibility in contractual base and relationship base of trust and cooperation existing simultaneously between the participants of the supply chain. It is of great benefit to encourage trust because a business person may not be sure of the delivery of the goods without this trust. Consignments are made on trust basis and failure to have it built may compromise the whole trade. Contractual base and relationship base of trust may exist simultaneously depending on the participants. Business men may decide to do business as friends who trust each other as well as sealing the trust with a legal contract. It is therefore possible to have a contractual base and relationship base of trust and cooperation exist simultaneously (Jones, 2006).
Bowersox D J, Closs DJ, DB Cooper. 2010. Supply Chain Logistic Management. Boston: McGraw-Hill.
Jones, D. 2006. Strategies for managing supply chain. New York: Cengage.
Kim, S. 2007. Supply Chain Management. London: Springer.