Implementing Enterprise Resource Planning Systems With Total Quality Control And Business Process Reengineering

Implementing enterprise resource planning systems with total quality control and business process reengineering

Survey results

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Marc J. Schniederjans, Gyu C. Kim

The Authors

Marc J. Schniederjans, Department of Management, College of Business Administration, University of Nebraska-Lincoln, Lincoln, Nebraska, USA

Gyu C. Kim, Department of Operations Management, College of Business, Northern Illinois University, DeKalb, Illinois, USA

Abstract

The primary objective of an enterprise resource planning (ERP) system is to help integrate an organization's business operations and processes effectively and efficiently. Not all firms have been successful in their ERP implementations and to that end research has helped to identify many factors that might be critical to a successful implementation. Such factors as the use of business process reengineering (BPR), and establishing a total quality management (TQM) culture have all shown to play important roles in ERP implementation. The focus of this survey research on US electronic manufacturing firms is to identify successful integration sequences of TQM and BPR with ERP. The findings reveal that both the sequence of implementation and the strategies selected to initiate ERP systems can significantly impact business performance successfulness.

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Article type: Survey.

Keywords: Enterprise resource planning, Business process re-engineering, Total quality management, Surveys, Research, USA.

Content Indicators: Research Implications** Practice Implications** Originality** Readability**

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International Journal of Operations & Production Management

Volume 23 Number 4 2003 pp. 418-429

Copyright © MCB University Press ISSN 0144-3577

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Introduction

A family of software packages used to integrate business organizations with one another is called enterprise resource planning (ERP) (Chase et al., 2001, pp. 420-30; Wallace, 2001). ERP has had a positive impact on the ability of businesses to improve working capital, implement a total quality management (TQM) culture, lower inventory levels, optimize raw materials and sell and deliver products to the customers (Shtub, 1999). ERP has helped alleviate the arduous job of supporting inflexible systems that in most cases result in cost increases, data redundancy and inaccuracy, and above all, various inefficiencies (O'Leary, 2000). Ideally, ERP is a computer system that keeps managers informed about what is happening in real-time throughout a corporation and its global connections (Jacobs and Whybark, 2000).

Unfortunately corporations have complained of excessive costs in deployment and maintenance of their ERP systems (Stevens, 1996). Besides being expensive, ERP systems can be difficult to implement (Davenport, 1998). According to Davenport (1998) most ERP system projects fail during the implementation stage.

What are major reasons for ERP failure?

One reason for ERP failure is not implementing a paradigm shift in operation areas before ERP implementation (Shtub, 1999). The proper implementation procedure requires a "sequence" of careful planning and implementation in conjunction with organization catalysts for change like TQM. An organization needs to assess the corporate culture and restructure it to TQM culture if it is needed (Braithwaite, 1994; Clark, 1999; Rampersad, 2000). For example, "teamwork" concept of the TQM such as problem-solving teams, quality improvement teams, or cross-functional teams need to be implemented throughout the organization to solve problems or improve problem solving inside and outside of the organization for purposes of change (Pike and Barnes, 1998; Rothwell and Kazanas, 2000). Although the TQM results in small improvements, the TQM approach has been a powerful catalyst for change on productivity improvements of the organization (Torok and Cordon, 2002).

The implementation of a TQM culture can, and usually should, impact the entire organization, as well as its supply-chain partners. The most common procedure to accomplish this type of change is through a more drastic change management approach called, business process reengineering (BPR). According to Ansari (2000), Elzinga et al. (1999) and Sethi and King (1998), BPR provides a guide for diagnosing possible problem areas and a tool for restructuring within and outside an organization. BPR is defined by Andersen (1999) as a radical redesign of business processes to achieve dramatic improvements in critical areas of performance, such as cost, quality, delivery and flexibility. This definition treats the TQM and the BPR concepts separately since BPR's focus is on large-scale "radical redesign" or "dramatic improvements" whereas the TQM focus on small incremental "continuous improvement." Although some proponents of BPR consider BPR as superseding TQM, some researchers set BPR as a pre-planning phase of the ERP and set TQM as pre-execution phase of ERP (Braithwaite, 1994; Sohmen 1998). Braithwaite (1994) suggested that BPR and TQM where partners that work together to achieve necessary organizational changes.

According to Rockefeller and Rockefeller (1998) BPR, a key concept in the ERP implementation, reviews business practices and procedures in a kind of "mapping" investigation. This "mapping", a kind of sub-text that becomes the foundation for the entire ERP system, can be done by ERP software vendors, consultants or a firm's own in-house team (Keller and Teufel, 1998). The more thoroughly this mapping is done, the better the BPR implementation will be. However, it has been estimated that about two-thirds of BPR projects either fail completely or fall significantly short of hoped-for outcomes (Plenert 1994; Sheridan, 1994; Schumacher, 2002). The most common barriers and errors to the success of BPR attempts observed are: resistance to change; limitations of existing systems; lack of a senior-executive support; a lack of cross-functional project teams and staff; neglecting employee's values and beliefs; trying to make reengineering