Enterprise resource planning (ERP) is a management system with a data zone platform which integrates critical data that is aggregated from corporate cross‐functions to produce meaningful information that can be used to enhance organizational productivity. ERP is typically a stand‐alone system. Supply chain management (SCM) is another management system that promotes quality services between trading partners and customers by either integrating or sharing their information systems from ERP so that product lifecycles can be substantially reduced and customer relations can be improved.
The concepts of ERP and SCM are not new in the literature. Most, if not all, studies have addressed these two concepts, based either on comparing their similarities or simply by treating them as individual systems. This textbook by Madu and Kuei is one of few to link the two systems. It not only gives readers a clear understanding of concepts and theories about these two systems, but also discusses practical applications and implementation tools. The approach is simple and direct. At the end of each chapter, relevant references and exercises with a few short cases are provided.
This textbook has 12 chapters, which can be loosely grouped into four main parts. Part I is the introduction and comprises Chapter 1. Part II covers the ERP system and is composed of chapters 2 to 5. Part III has one chapter – chapter 6 – which bridges ERP and SCM concepts. Part IV covers SCM systems and consists of six chapters. These contents are briefly reviewed as follows.
Chapter 1 is an introductory chapter that explicates the importance of ERP and SCM, and the significance of logistics management in today's electronic business environment. Chapter 2 is related to strategizing ERP, and shows that the success of ERP adoption is dependent on planning, directing, controlling, and organizing. Chapter 3 reveals another important success factor of ERP – customer relationship management (CRM). The chapter first elaborates on the importance of CRM, and then links it to ERP as a front‐end application. Chapter 4 discusses the evolution of conventional ERP into EPR II, which integrates ERP into the electronic business environment. Chapter 5 addresses an important issue of ERP – its implementation. The chapter clearly iterates that people are the major force behind ERP success, and that management should not only organize the change but also educate and encourage its subordinates to alter their conventional practices with information systems and actively participate in the new ERP environment. Chapter 6 emphasizes the importance of gaining a full understanding of the product life‐cycle, in which SCM plays a significant role.
Chapter 7 provides a comprehensive review of SCM development with practical examples such as collaborative planning forecasting and replenishment (CPFR), total quality management (TQM), and postponement. Chapter 8 then reviews the importance of SCM process management. A set of guidelines with a flow chart approach is presented to aid the reader's understanding of SCM process management. This chapter uses many manufacturing sectors as examples, and ends with the reminder that special consideration of process management is needed for the service industry because it has different attributes than that of manufacturing sectors. Chapter 9 describes SC policy deployment in a framework with vertical implementation, and covers the seven principles of SCM policy. Chapter 10 discusses SC quality management and development. The chapter starts with a definition of supply chain quality management (SCQM) and a conceptual model that can be used to measure its success. It then tightens the quality management concept with Deming's 14 principles, and applies Deming's Plan‐Do‐Check‐Act cycle to reflect the adoption of change in the new SCQM culture. Chapter 11 addresses the issue of SCM selection and resource allocation. Two measurement tools are presented in this chapter: quality function deployment (QFD) to assess the concerns of customers, and the analytic hierarchy process (AHP) to study and select an ERP system that matches the level of SC excellence. Chapter 12 reviews the importance of decision science in modeling the success of SCM. It gives four examples of the application of decision science to SCM: the measurement of marginal performance with mean and standard deviation methods, the modeling of postponement decisions with the linear programming technique, the design of warehouse layouts with the 0‐1 linear programming technique, and the assessment of inventory policy with the Monte Carlo simulation model.
The book clearly outlines the significance of ERP and SCM. Each chapter considers the pitfalls that are possible when implementing both systems, and provides solutions. This textbook should be adopted at the entrance level of both undergraduate and postgraduate degree programs in engineering and business schools. It will also be valuable to practitioners whose organizations have either implemented or are about to implement ERP and SCM.
