Abstract:
The past two decades have experienced an unprecedented rise in enterprise resource planning (ERP) systems implementation among asset-intensive organizations. Typical asset-intensive industries such as oil and gas, energy, and mining, rely heavily on the performance of their asset investments to stay competitive. Recently, several ERP vendors have developed solutions with diverse functionalities to address different business processes within such organizations. However, challenges unique to asset-intensive industries such as multiplex global supply chains, geographically dispersed sites, and sporadic climatic conditions add to existing impediments. This paper explores the effects of ERP systems on direct procurement with a focus on upstream asset-intensive industries. The study examines existing functionalities within ERP to determine benefits and constraints and builds on a framework with which to address potential gaps and opportunities. A quantitative research method was used to address five constructs related to ERP systems functionality to support inventory levels, delivery lead-times, procure-to-pay process, engineering change management, and ERP usability. The findings reveal statistically significant relationships between ERP systems effectiveness and all mentioned constructs, except the procure-to-pay process and ERP usability. The study informs on future improvements and feasible developments in procurement management and extends the scope of ERP systems knowledge in asset intensive industries.
Machine summary:
com Exploring the Effects of Enterprise Resource Planning Systems on Direct Procurement: An Upstream Asset-intensive Industry Perspective Lewis Njualem*, a and Milton Smith b a School of International Business and Management, Seneca College of Applied Arts and Technology, Ontario,Canada b Department of Industrial, Manufacturing and Systems Engineering Edward E.
A quantitative research method was used to address five constructs related to ERP systems functionality to support inventory levels, delivery lead-times, procure-to-pay process, engineering change management, and ERP usability.
The study informs on future improvements and feasible developments in procurement management and extends the scope of ERP systems knowledge in asset intensive industries .
Genpact (2014) uncovered business challenges faced by the AIIs as listed below: · Non-standardized engineering and sourcing processes led to incorrect parts procurement, inventory pile up and high maintenance cycle time; · A high number of field assets (more than 250, globally) without engineering BOMs; · Historical and technical data of most assets distributed in multiple, disparate IT systems.
· RQ3: Do ERP systems adequately support the procure-to-pay process for direct materials in upstream AIIs?
· RQ5: How do business users rate the usability of ERP systems in support of direct procurement processes in upstream AIIs?
The intended population of study was professionals working in the field of procurement and maintenance management who used ERP systems within upstream AIIs. Given the isomorphism that exists within these industries, respondents were drawn randomly from different segments including mining, oil and gas and energy industries.
This study defined constructs related to ERP system functionalities to support inventory levels, delivery lead times, procure-to-pay process, engineering change management and ERP usability.