Applicability of ERP for Production Network Planning: A Case Study

Abstract

A production network enables a company to develop capabilities to respond to diversity in national or regional demand, while at the same time integrate and coordinate their activities. Many companies have implemented enterprise resource planning (ERP) systems to overcome problems associated with coordination and planning in an organization, in recent years. In addition, advanced planning and scheduling (APS) systems have emerged to address the planning insufficiencies of ERP systems. However, due to complexity and competence dependency of these systems, advantages of them are overlooked by large organizations, and therefore ERP systems are still in use for planning. ERP systems are used in production networks for coordination of various plans and decisions across network partners. This paper aims to assess the fit and alignment between ERP functions and production network requirement for supporting production planning processes. Using a case study approach, the paper illustrates and discusses the applicability of ERP systems for planning in production networks. The case study showed that ERP systems have limited ability in coordinating order allocation in the network, detailed short term production planning and inter network distributions. It is concluded that use of ERP systems for network planning may in fact limit the network’s ability to reap the full benefits associated with planning across several facilities in a network.