A system dynamics approach to the analysis and implementation of ERP

Pao Yue-kong Library Electronic Theses Database

A system dynamics approach to the analysis and implementation of ERP

 

Author: Lai, Chun-lau
Title: A system dynamics approach to the analysis and implementation of ERP
Degree: M.Phil.
Year: 2002
Subject: Hong Kong Polytechnic University -- Dissertations
Material requirements planning
Department: Dept. of Industrial and Systems Engineering
Pages: xi, 137 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1667746
URI: http://theses.lib.polyu.edu.hk/handle/200/5108
Abstract: Enterprise Resources Planning (ERP) systems are powerful software packages that enable businesses to integrate a variety of disparate functions. In particular, it is recognized as an effective management system that has an excellent planning and scheduling capability by offering a dramatic increase in customer service, significant gains in productivity, much higher inventory turns, financial marketing analysis, and a greater reduction in material costs. However, many organizations cannot achieve the benefits that offer from the ERP system. Some organizations found that their business cannot adapt well to the ERP system and some organization cannot implement the system in "best practice". This research investigates the application of the System Dynamic Modeling (SDM), a dynamic approach to the design and implementation of ERR The proposed methodology to ERP planning and implementation which has been found much better than the convention approaches such as the check list method described in Wight, O.W. (1982) and the organization approaches described in Holland and Light (1999). The new methodology consists of six steps. The first step involves problem definition by using System Dynamics (SD) for the ERP system. The second step is system description. The third step is to develop a dynamic model representing the company, by incorporating detailed SD design to identify 'best practice' in each functional area of the company. The fourth step is to match the model of the existing practice against the generic model by simulating the system behavior, and to identify what key variables are currently omitted or inadequately performed. The fifth step is to simulate different policies to assist decision making of the new system. The last step is implementation. By comparing the existing practice with the 'best practice' identified through the dynamic analysis approach, companies can easily identify the best approach for design and implementation of the ERP system. In order to evaluate the proposed methodology, the methodology has been tested in a Lamp Manufacturing Company. The author also conducted three more case studies to illustrate the methodology and their applications in Engineering and Service industries. The results demonstrated that the proposed approach is both powerful and effective. The result of using the proposed dynamic approach to design and implement the ERP system enabled the manufacturer to use ERP to obtain higher productivity by reconstructing the orderfulfillment process. In addition, the system has had a significant long term impact on the company s business capabilities by providing improved communication across functional areas plus more stringent material planning and control between Hong Kong and Mainland China.

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