ERP-based lean systems and their impact on performance: the system dynamics approach for a maturity model

Dung Ho, Arun Kumar and Nirajan Shiwakoti

International Journal of Industrial and Systems Engineering, 2021, vol. 37, issue 3, 334-358

Abstract: There are continuing debates on the effects of enterprise resource planning (ERP) and its combination with lean on manufacturing performance. It is suggested to integrate lean production principles into ERP systems; however, research exploring this area in the literature is limited, especially quantitative studies. This study fills the knowledge gap by quantitatively investigating the correlation between ERP-based lean systems and performance outcomes, using a system dynamics approach. We model a manufacturing system, focusing on the effects of ERP and lean inputs on customers' order fulfilment. Different scenarios of ERP systems supporting lean practices are illustrated through a capability maturity model. Actual performance data is collected to validate the developed model. The results show that ERP is a hindrance on lean at the low maturity level. The influence on ERP only occurs with the mediator role of lean. ERP-based lean systems bring substantial benefits to organisations. Therefore, lean practices are a foundation upon which the full benefit of ERP can be received.

Keywords: system dynamics; lean; enterprise resource planning; ERP; maturity model; performance. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijisen:v:37:y:2021:i:3:p:334-358

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