4. Expectation And Reality In Erp Implementation Consultant And Solution Provider Perspective

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Expectation and
Expectation and reality in ERP reality in ERP
implementation: consultant and implementation
solution provider perspective
1045
Petri Helo
Logistics Systems Research Group, University of Vaasa, Vaasa, Finland, and Received 4 April 2008
Pornthep Anussornnitisarn and Kongkiti Phusavat Revised 19 May 2008
Accepted 4 June 2008
Faculty of Engineering, Kasetsart University, Bangkok, Thailand

Abstract
Purpose – This paper aims to analyse expectation and reality in enterprise resource planning
implementation from the consultants’ and software vendors’ point of view and process these further as
requirements of future IT systems.
Design/methodology/approach – A small-scale survey among Finnish enterprise resource
planning system (ERP) software vendors and consultants on ERP implementation challenges is
analysed (n ¼ 59). The results are connected to existing literature in the field of deploying ERP
systems in the form of discussion.
Findings – The consultants’ opinions show similar results with studies conducted with companies
using ERP systems. The implementer’s point of view shows clearly the challenge of using
standardized ERP packages for various requirements on different levels. Although the sales
presentations tend to emphasize the general purpose and flexibility of software packages, the dilemma
between customization and vanilla system remains. The implementer’s viewpoint emphasises
challenges in operations: production planning, materials management, sales and marketing.
Research limitations/implications – The complexities of large ERP systems represent a true
challenge from the knowledge transfer point of view. Standardized ERP packages implement
standardized approaches, which has been a key benefit. The results show that the challenges are
related to production planning and materials management.
Practical implications – Software vendors and consultants have a thorough knowledge of ERP
implementation, but still the key challenges remain much the same. ERP project deployment requires
careful planning with regard to the change management aspects, but also IT related technical aspects.
The paper presents a checklist for matching the ERP system with the specific requirements of the
company.
Originality/value – The results of the survey triangulate and justify many aspects found in
previous research. From the consultants’ point of view developments in production planning and
complex products are especially needed. Initial solutions and further research are outlined.
Keywords Information systems, Resource management, Manufacturing resource planning,
Value analysis
Paper type General review

Introduction Industrial Management & Data
Today, there is no question about how important an information system is to the Systems
Vol. 108 No. 8, 2008
operations of both public and private organizations. In the era of globalization, the pp. 1045-1059
q Emerald Group Publishing Limited
0263-5577
¨ ¨
The authors would like to thank MSc. Mr Jani Lamsa for the empirical part of the study. DOI 10.1108/02635570810904604

IMDS more complex the supply chain, the higher the needs for tools for organizations to
108,8 effectively manage their activities. The information system is considered a
fundamental tool for a competitive organization. One of the most mentioned
information systems in research and business news is the enterprise resource planning
system (ERP). It was estimated that in the past decade about $500 billion was invested
in ERP systems worldwide (Gefen and Ragowsky, 2005; Carlino and Kelly, 2003).
1046 In general, the ERP system has been developed from the material requirements
planning (MRP) and manufacturing resource planning (MRP-II) concept developed
in the 1960-1970s in which the information system is used to automatically coordinate
the activities among the production control, inventory and accounting departments
(Markus et al., 2000). Later, the scope of the system was evolved and became larger by
including human resources, marketing and sales, distribution and supply network. As
a result, the ERP has become an enterprise-wide information system that uses database
technology to control and integrate all the information related to a company’s business
including customer, supplier, product, employee, and financial data. For organizations,
including government agencies, that adopted the ERP system, almost of all the
business transactions (e.g., inventory management, customer order management,
production planning and management, distribution, accounting, human resource
management) are entered, recorded, processed, monitored and reported (Davenport,
1998; Umble and Umble, 2002; Gefen and Ragowsky, 2005; Raymond et al., 2006).
Despite the fact that the ERP system has been developed, evolved and implemented
around the world for almost two decades, there are still many recently published
reports about the difficulties in ERP implementation (Tsai et al. (2005); Lui and Chan,
2008). Commonly reported problems usually are issues of over budget and long delays
in the implementation schedule. Many reported that ERP implementations failed to
achieve the organization’s targets and expectations. According to Chakraborty and
Sharma (2007) 90 percent of all initiated ERP projects can be considered failures in
terms of project management. In the worst scenarios, many companies were reported to
have abandoned ERP implementation. According to previous research and the authors’
experiences, the difficulty in ERP implementation happens regardless of the
organization’s investment in the ERP system, which means the organization can
spend hundreds of millions of dollars but still face difficulties during the
implementation phase. Unlike other information systems, the major problems of
ERP implementation are not technologically related issues such as technological
complexity, compatibility, standardization, etc. but mostly about organization and
human related issues like resistance to change, organizational culture, incompatible
business processes, project mismanagement, top management commitment, etc.
A lot of research has been done during the last decade about the success and failure
of ERP implementation. Most of the data these researchers analysed often came from
surveys of organizations which experienced ERP implementation. Many researchers
also suggested some key points in overcoming the problems of ERP implementation
according to their survey results (Gulledge, 2006; Moon, 2008).
This article offers another view of ERP implementation by interviewing
experienced Finnish ERP consultants and providers. A total of 59 ERP consultants
and providers were interviewed regarding their experience of ERP implementation in
Finland. The results of the interview are analysed and critical implementation aspects
are suggested.

Literature Expectation and
ERP systems are large and complex IT packages aiming to combine aspects of
materials management, financial management, and human resources management.
reality in ERP
Implementation of such systems based on standardized packages requires lot of work implementation
related to business processes and different organizations within a company.
The literature on this topic has reported several ERP related implementation problems:
.
Multi-site ERP implementation on geographically dispersed organizations is 1047
generally difficult since the meanings of the concepts “site” and “enterprise”
depend on many organizational aspects (Markus et al., 2000). Possible patterns
vary between completely autonomous local subsidiaries and totally centralized
operations policies for each site, with all the possible shades between these two
extremes, including that commonly defined standards take place only in
financial reporting. From the technology point of view, it has been attempted to
solve these issues with software platforms able to handle single or multiple site
operations, and single or multiple financial entities. The flexibility on multi-site
configurability in many cases is not only a technological issue, but also a factor
affecting the license pricing of the ERP software. (Markus et al., 2000).
.
Organizational preparedness on implementation of ERP is related to technology
such as computers and network connections, but also “soft factors” such as
education, training, the maturity of current processes, commitment to release the
right people as well as the top management’s commitment (Rao, 2000; Tsai et al.,
2005). According to Rao (2000), implementing first a “vanilla version” of the ERP
system and then after six-months a customization, should reduce the
implementation time significantly.
.
The decision on acquiring or developing an own ERP system should be
considered carefully from the investment point of view. The development and
maintenance of software code requires resources within the company, or a close,
reliable vendor (Rao, 2000; Ifinedo and Nahar, 2006). Systems can be tailored in
many ways, but the investment payback should be considered always a high
priority. As Soh et al. (2000) say, organizations need to choose between “adapting
to the new functionality, living with the shortfall, instituting workarounds, or
customizing the package”.
.
Vendors and consultants need to understand the business and translate the ERP
requirements to the organization and process levels (Gulledge, 2006; Rettig,
2007). According to Soh et al. (2000) misfits arise from requirements that are not
supported by the ERP package. These specific requirements can be related to the
company level, country level, and public sector type of parameters.

Table I below summarizes the misfit types according to Soh et al. (2000). In many cases
possible solutions to deal with these matters in ERP implementation is to use manual
solutions or develop a complicated procedure in the system to achieve the aimed for result.
Al-Mashari et al. (2003) suggested a taxonomy of critical success factors for ERP
implementation. They proposed a framework which consisted of the phases of:
.
setting-up;
.
implementation; and
.
evaluation.

IMDS
Type Example
108,8
Data format Chinese style to use last name, first name instead of opposite
western style. Use of separators in postal addresses and phone
numbers
Data relationship System generated ID numbers for patients vs using social
1048 security number. Use of running sales order numbers for each
manufacturing site instead of sales organization
Functional access Data search matched to every-day use cases vs complex
procedures to retrieve the required information, e.g. listing
value of orders according to customer regions
Functional control Validation of information requires modification of source code,
e.g. validation of credit card number
Functional operational System does not support all the required functionality in
invoicing, e.g. payments or factoring finance model. The
external system is required to process these parts
Output – presentation format Reports miss information such as data fields or heading
information, e.g. page number, name of user
Output – information content Data attributes are missing from customer information, new
fields would be needed to report customer preferences on
Table I.
delivery
Types of ERP
implementation misfits Source: Adapted from Soh et al. (2000)

The implementation factors included:
.
ERP package selection.
.
Communication between organization and people.
.
Process management.
. Training and education.
.
Project management.
.
Legacy systems management.
.
Systems interaction.
.
Systems testing.
.
Cultural and structural changes.

As the deployment of such an extensive system is process development and related to
people’s daily work, resistance to change and change management strategies need to
be considered.
Huang et al. (2004) assessed risks in ERP projects by interviewing members of the
Chinese Enterprise Resource Planning Society (n ¼ 26) and prioritized the top ten risk
factors based on factor analysis (Table II). According to the results of this research, soft
factors such as senior management commitment to the project, communication with
users, training and user support present the key risks. Planning actions for each risk
factor require the management of change. Aladwani (2001) has suggested a three-step
process-oriented change management approach, which consists of the phases of
knowledge formulation, strategy implementation, and status evaluation.

Expectation and
Priority Name
reality in ERP
1 Lack of senior manager commitment implementation
2 Ineffective communications with users
3 Insufficient training of end-users
4 Fail to get user support
5 Lack of effective project management methodology 1049
6 Attempting to build bridges to legacy applications
7 Conflicts between user departments
8 The composition of project team members
9 Failure to redesign business process
10 Unclear/misunderstanding change requirements Table II.
Top ten risk factors of
Source: Huang et al. (2004) ERP risk

From the technical point of view, the key choice in ERP implementation is to find
an optimal strategy to balance between customization of the ERP system versus changing
the organizational procedures within the company (Huang et al., 2008; Lui and Chan, 2008).
From the organizational point of view it is to manage change and develop the business
processes. These two views are merged in many deployment projects. Despite extensive
use of software vendors and business process consultants, the impact of their role has not
been studied widely. Software vendors can be also blamed for non-successful
implementation, but since changing human organization and processes are often
beyond the control of people coming from external organizations, these opinions should be
interpreted critically.

Methodology
In order to capture the implementers’ point of view of ERP systems a survey was
carried out by sending 130 emails to major Finnish ERP solution providers and
consultants. The respondents were selected by the research team from various contact
lists. The questionnaire included 20 open and structured questions with regard to ERP
systems and projects. The survey was targeted on consultants, ERP sales key
accountants and other people involved in several ERP projects. The questions were
developed by the research team and the study was not sponsored by any company.
It was promised that the respondents would receive a summary of the survey results in
exchange for their time in answering the questionnaire. Two weeks after the first
round a follow up was emailed to non-respondents. The total response rate was
45.5 percent in the email survey – 59 responses from 12 major companies in the field.
The distribution of respondents in terms of background was as follows:
(1) System providers (n ¼ 12).
(2) Service providers (n ¼ 16).
(3) Consultants (n ¼ 12).
(4) ERP retailers (n ¼ 14).
(5) Research institutions (n ¼ 5).

Classification of these five categories was given by the respondents themselves to clarify
their role in the business. The respondents were confident of their knowledge of ERP

IMDS systems. To the question “How would you rate your knowledge of ERP systems and
108,8 implementation?” 57.9 percent of the respondents said excellent, 33.3 percent good,
8.8 percent moderate, and none rated their knowledge as poor. Although the sample size
is rather small, the empirical data can be considered as a discussion opener in this field.

Results
1050 The results of the survey consisted of three main sections: The first part dealt with the
background information of the respondents (the demographics). The second part dealt
with the business effects of ERP systems such as the advantages and disadvantages of
ERP systems. The third part of the questionnaire dealt with implementation issues and
organizational changes. For each part the respondents were asked to describe if there is
any alternative missing and add free text wherever they found it necessary.
Figure 1 below illustrates how the respondents perceived the advantages of ERP
system. The most frequently mentioned benefits were related to improved discipline

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%

Process improvement and increased
66.10%
process controllability

Improved process quality and
55.93%
predictability of business

Standardisation of business processes 47.56%

Organisation transparency 44.07%

Enables departments to integrate
37.29%
activities

Improved reporting 32.30%

Dicipline in operations 27.12%

Customer/supplier network
23.73%
management

Reduction of lead-time 22.03%

Real-time information from products and
20.34%
processes

Improved reliability of system 20.03%

Improved on-time delivery 16.95%

Savings on transaction costs 15.25%

Enables new business strategies 10.17%

Improves market responsiveness 10.17%

Supports operative design 8.47%

Simplified system support 5.08%

Figure 1. Improved flexibility 5.08%
Advantages of ERP
systems Reliable database systems 5.08%

and control: 66.1 percent of the respondents mentioned controllability, 55.9 percent Expectation and
quality and the predictability of the business, and 47,5 percent the standardization reality in ERP
of processes. 44.1 percent mentioned improved organizational transparency.
All these parameters are related to ways of processing and managing information. implementation
Actual business performance parameters are very few and rank much lower: only
16.9 percent mention improved on-time-delivery.
Implementation of standardized ERP packages is a mainstream information 1051
management decision. However, companies are different and every software package
has its limitations. According to 42.4 percent of the respondents, the standard ERP
does not fulfill the business requirements, which is a top three problem of ERP
disadvantages. Figure 2 lists the con side of ERP, and shows that complexity of
software remains the number one challenge – difficulty in understanding ERP logic
(45.8 percent) and complexity 35.6 percent. The section “others” with 44.1 percent
represents a great number. However, the open answers section on this question showed
issues related to change management, top management commitment, resistance to
change, and general leadership issues, and no common single parameter was identified.
The results of this part of the survey can be compared with a previous study in
Taiwan. Tsai et al. (2005) found that by interviewing top management, ERP project
managers, key users and end-users that critical failure factors are mostly related to
project management, personnel training and change management.
Organizational change plays an important role in many ERP implementation
projects. According to the results of the survey, the respondents (n ¼ 58) say that the
business process needs to be redesigned (86.2 percent), and only 13.8 percent find this
is not necessary. The business process method of design is another big issue.
The respondents say that business processes are developed in accordance with the
ERP system (25.5 percent); the ERP system should be configured according to the
business process (56.9 percent). It is surprising that so many consultants and solution
providers actually find tailoring ERP important. Most of the justification in sales talks
seems to be in favor of minimized tailoring. The rest of the respondents – “others” –
31.4 percent – seem to suggest a compromise approach, such as: a combination of both
(19.6 percent), use of best practices (3.9 percent) or “depending on business strategy“
(2.0 percent). In response to the question “are organizational changes needed to
implement ERP?” the respondents (n ¼ 58) have different types of conclusions:
51.7 percent said yes and 42.3 percent no. Typical organizational changes (n ¼ 31) are:
.
Flatter organizational models (22.6 percent).
.
The responsibilities of workers are expanding (58.06 percent).
.
Decision-making is improved (35.5 percent).
.
Others (22.6 percent).

So what is so difficult in implementing an ERP system? Figure 3 presents some results
on this question. Most of the respondents say that production planning and control is
the hardest part (44.6 percent), while the second place goes to materials management
(21.4 percent), and third to sales and marketing (21.4 percent).
The “others” (19.6 percent) for this question were analysed in detail and seem to
point out the key challenges of current software development. Issues such as
distribution/supplier network management, product configuration and offer

IMDS
108,8 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%

Difficulty to understand the
45.76%
logic of ERP system

Others 44.07%
1052
Vendor package ERP does not fullfil 42.37%
the business requirements

Complexity 35.59%

Selection, implementation or
35.59%
configuration of the system

Underestimating the
30.51%
business requirements

Costs 28.81%

Lack of user centric approach 27.12%

Inter-organisational
22.03%
communication problems

Temporary performance dropdown 20.34%

Dominating vendor market position 20.34%

Heterogeneous system 16.95%

Control of ERP 16.95%

Consultants lacking industry-specific
11.86%
knowledge, project management or training

Does not fit with the management model 8.47%

System does not work 6.78%

Figure 2. Lost control of process parameters 6.78%
Disadvantages of ERP
implementation

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%
Expectation and
Production planning and control 44.64% reality in ERP
implementation
Materials management 21.43%

Sales and marketing 21.43% Depending case by case
Supporting key processes
1053
Network management
19.64% Product configuration
Others
Offer calculation
Design of use cases
Training and change management
Project management 10.71% Communication between departments

Customer and supplier network
management 7.14%

Human resources 5.36%
Figure 3.
Difﬁculties in ERP
Finance 5.36% implementation

calculation are developing parts in many ERP systems. The differences between the
respondents’ group, such as education, experience or the software package that they
sell, were tested, but no statistical differences were found on any of these parameters.
These results can be interpreted in several ways – there is a possibility that software
providers do not understand production and materials management very well, there is a
great variance in terms of procedures in manufacturing companies, or the software
packages are out of date. Whatever the main reason is, production and material
management needs to receive special attention due to its criticality in implementation.

Implication of results
According to the results there seems to be a trade-off situation between generic
purpose systems and customization requirements related to business types and
industries. This consultant’s view is also supported by the interviews carried out in
companies implementing systems (Rao, 2000). Standardized packages offer
standardized processes, which can be monitored and controlled. Still compliance
requirements with Sarbanes-Oxley (SOX) Act may cause implementation issues
(Huang et al., 2008). However, the competitive advantage of companies comes from
business processes, and if the same practices are shared without any tailoring, the
competitiveness from production is limited.
The operating environment varies between companies: products and processes are
different. The results of an empirical study conducted by Elbertsen and Van Reenekum
(2008) show that ERP adoption by mid-sized Dutch companies is most signiﬁcantly
driven by competitive pressure and software comparison with the company’s business
processes. Consultants are used in this transition. From the ERP implementation point
of view the operating environment includes the following customization aspects:
.
Production control principles are different based on the order-decoupling point.
Companies operating make-to-stock, assembly-to-order, make-to-order, or
engineer-to-order are very different in many ways. The range of product variety,
mix, and stability of variety is driving the management of bill-of-materials.

IMDS For instance, project management based production planning is not supported by
108,8 all ERP systems.
.
Products are complex and require parameterization. Many systems are built on
fixed material codes, but real-life products might include several mandatory and
optional parameters to describe the complete configuration. Modularity and
parameterization design principles are needed for finished goods, but also for
1054 components purchased from suppliers.
.
Workflow control describes how tasks are forwarded from one operator to
another. These processes actually define the efficiency and productivity of a
company and cannot be standardized according to following the restrictions of
an ERP system. Performance measurement systems drive developments in these
business processes (Phusavat, 2007).
.
Localization issues are connected to country-specific legislation issues related to
accounting principles, but multi-language, multi-site manufacturing with
multiple bill of materials (BOMs) and routings for the same sales code could
present problems for many ERP systems.

The need to adjust the ERP system according to business reality is obvious. Large
software packages such as MySAP and Oracle offer many ways to use parameter control
for processes, implementation templates, and even industry specific solutions. However,
for small and medium scale software packages all flexibility may not be available.
Typical attempts to solve this type of challenges include several creative solutions:
.
Parameterization of software where this is possible.
.
Report modification for customized work orders, order-confirmations and
production control.
.
Misuse of form and database fields from the original purpose.
.
User interface modification by using programming tools provided by the ERP
supplier.
.
Using external applications communicating with ERP and taking care of some
functionality, e.g. sales order system, manufacturing execution system (MES).
.
Workflow parameterization to solve process flexibility requirements.

The ultimate solution is to build the ERP system from scratch, which is quite extreme,
and requires software engineers to maintain and update a tailored IT system. Still,
many companies have taken this path, since it ensures that business processes are
driving ERP systems, and not vice versa.
The results of the survey show that vendors and solution providers are well aware
of the challenges of using standardized ERP packages. New tools to match the ERP
software and the company requirements are needed. By using checklists and other
quick audit types of screening tools, customers and providers could both cross-check
the suitability of the proposed package, as well as evaluate the potential need for
tailoring the system. Table III shows an example of possible checklist questions, which
help in describing the special materials management and production planning related
requirements of an enterprise. This list is by no means exhaustive or complete, but it
highlights some aspects arising from the difficulties in ERP implementation suggested

Expectation and
Aspect Conditions
reality in ERP
Sales organization Most of quotations and sales orders are generated by: implementation
people within the enterprise
separate independent sales units
Financial entities Number of subsidiaries and companies within the enterprise from the
financial reporting point of view: 1055
single
many
many with hierarchy
Need to control supply Sourcing and management of supply is:
network (SCM) based on purchase orders
requires capacity planning in some extent
real-time visibility due to large extent of outsourcing or OEM
Production principles To what extent (percent) is production carried out in the following
categories?
make-to-stock
assembly-to-order
make-to-order
engineer-to-order
Complexity of product The products are mainly in which category?
project orders
engineering driven highly customer specific solutions
configurable
modular
standard
services
Planning and scheduling The production process can be described as:
process industry
batch manufacturing
job shop
product cells
Volume, mix and The production process can be categorized with the following parameters:
life-cycle annual sales volume of products (sales units)
number of product variants sold to customer (pcs)
typical life-cycle of product in manufacturing (years) Table III.
Quality control Traceability requirements of the company require: A checklist to identify the
serial number handling for each component characteristics of
time stamps and batch numbering operations (order
approvals in workflows fulfillment and
extensive test data related to products production planning)
External systems The number and types of external data systems that need to communicate from the ERP
with ERP on a daily basis, e.g. MES, industrial automation systems, implementation point of
testing systems, high-bay warehouses view

by providers (Figure 3). The implications of Table III for the specific needs of ERP
implementation from both the technical and organizational points of view should be
limited to preliminary screening purposes only. Very often implementation checklists
consider ERP requirements on a functional level only and do not take into account
specialties due to the business environment. The presented checklist aims to take into
consideration environmental differences included in the decision making process.
No ERP system can fulfill all types of needs and requirements.

IMDS From Figure 3, it obviously shows that the greater the interactions among
108,8 departments in implementing each ERP application module (e.g. Finance, Human
resource, Inventory, Purchasing, Production planning), the more difficulty of success
implementation. Most implementation works of Human resource and customer and
supplier network concerned with data accuracy & updated related to record keeping
and transaction management. In addition, the finance module is a straight forward
1056 business processes which is mostly implemented as standard accounting practice.
Similar to human resource and customer and supplier network module, financial
module focuses on transaction accuracy and record keeping. The objective of finance,
human resource and customer and supplier network module are quite simple without
any conflicting objective with other departments. The material management and sales
and marketing module are more complex in term of interactions and individual
departmental objectives. In material management, typically, there are at least two
departments involved in the process such as purchasing and inventory and production.
Common conflicting objective are purchasing and inventory trying to keep inventory
level low and cheaper per unit cost, while production would like to always have raw
material available to serve customer requirement change. Production department
trends to prefer more expensive raw material that they think improving production
throughput. In sale and marketing, customer service is very important and often ends
up with changes of customer order with a short period notice to production. More over,
the sale and marketing consider order based on monthly or quarterly sales while the
production have daily or weekly schedule. The same number of customer quarterly
order, may have different impact on production schedule in which leads to overtime
cost and delayed shipment. Above all the production planning and control has to deal
with many key departments such as purchasing and inventory, production, sales and
marketing, etc. which have own objectives which conflicts with others.
The implication of Figure 3 is that the sequence of ERP implementation module is
important. Starting from less interaction module such as finance, human resource,
inventory is recommended. Then, move forward to more interaction module like sale
management and material management. The production planning and control module
should be implemented last. This recommendation is also supported survey results
(Figure 2). From Figure 2, the common problems of ERP implementation are: complexity
in logic of ERP system (45.76 percent) and implementation (35.9 percent),
underestimating of both ERP requirements (42.37 percent) and company business
process requirement (30.51). Therefore, the ERP implementation needs to start slow. By
allowing company staffs to learn about ERP system and implementation starts from
easy module like finance, human resource and inventory at the same time as ERP
consultant to learn more about company problems and preferences. So both company
staffs and ERP consultants can develop problem solving relationships and success at the
early stage in order to be ready for bigger obstacles later. In addition, this paper
concludes that the ERP implementation is not a “how-to” but about “learn-to” processes.

Conclusion and future work
As the main technical problems in ERP implementation are related to operations:
production planning and control, materials management, sales and marketing, one
could speculate about the common reasons behind them. The current industrial
standard of production planning is to use MRP-II type of logic with higher level Master

production schedule and MRP. These functions combine sales, movement of materials, Expectation and
and production into common elements. This type of system works well in many reality in ERP
manufacturing industries, but there are some restrictions in this logic. Potential points
of improvement on production planning and control project could be faced in the implementation
following situations:
.
Engineer-to-order production. In some cases companies need to promise a delivery
date before having an exact bill for materials. Some software packages suggest 1057
using project management tools for these cases, but there are engineering driven
companies where factories have tens of thousands “mini-projects”, each including
some type of design and engineering. The solution could be the implementation of
some type of generic-BOM or descriptive-BOM, which would then get more
precise attributes during the design and engineering phase. Variant configurators
and phantom products may give a partial solution, but there is still lot of work to
do to fully support “white spots” of structure.
.
Capacity management and production queues. Goldratt (1990) introduced the
production control philosophy based on theory of constraints a long time ago as
well as some scheduling principles for capacity management. But still many
shop floor control systems use traditional first-in-first-out (FIFO), shortest
processing time (SPT), longest processing time (LPT), due dates type of
scheduling, and do not care too much about key resource capacity planning.
.
Conversion of sales order to production orders should support complex rules being
automated. In the era of mass customization and when built-to-order type of
production is seen as state of the art, the sales order system should be linked to
production automatically and in real-time. This part of the system should not need
any manual production planning work, at least in assembly type of manufacturing.
.
Integration between manufacturing units within the supply chains. One of the
challenges is the case of mid-volume manufacturing with high-mix products.
The dependencies are not obvious, and perceiving “a customer project” or “sales
order” from several items coming from different factories/production lines is not
easy. However, the customer expects to receive everything at the same time.
Logistics information systems related to transportation and distribution
planning may be required for integration building (Krafzig et al., 2004).

Many of the points listed are related to specialties of the industry type; however, there
are many assumptions made in the software packages about companies. These
assumptions might not be feasible in all types of production and due to historical
reasons the current ERP systems do not always support today’s manufacturing
requirements.
ERP implementation is an important and potentially risky investment for any
company. Further research should focus on matching the environmental
characteristics and software solutions. As the results from the data collection
suggest, there is a certain trade-off situation between the extent of the ERP system –
flexibility – and the efficiency of implementation and use. There is good potential for
software developers to build new data models that support the complex needs of
industries. The research community should also support the development of these
environment specific or domain specific ERP models.

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Corresponding author
Petri Helo can be contacted at: phelo@uwasa.fi

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