The Effect of Enterprise Resource Planning on Competitive Advantage: The Mediating Role of Supplier Relationship Management

Siagian, Hotlan and Tarigan, Zeplin Jiwa Husada and Laurensia, (2018) The Effect of Enterprise Resource Planning on Competitive Advantage: The Mediating Role of Supplier Relationship Management. In: International Conference on Material Science and Engineering in Jeju-island, 17-06-2018 - 17-06-2018, Jeju - South Korea.

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Abstract

Today, many companies have used the enterprise resources planning (ERP) system which allows the integration of all functions related to the operation of the company either internally or externally. The implementation of ERP enables the supplier and the company to establish a mutual benefit relationship. An excellent relationship between supplier and company allows the supplier to access the right information regarding the material requirements. This supplier relationship, moreover, enables the supplier to plan and deliver the materials required and, in the end, to create a competitive advantage for the company. This study examines the effect of enterprise resource planning (ERP) system on the competitive advantage and the mediating role of supplier relationship management. The study used 59 samples executive level of the export-oriented manufacturer in the region of East Java, Indonesia. Data collection used questionnaires designed on a five-point Likert scale. Data analysis used the partial least square technique with smartPLS software. The empirical result revealed that the ERP system used by the corporate affects the improvement of the supplier relationship management significantly. The ERP system used by the company has a direct impact on strengthening the competitive advantage. Furthermore, supplier relationship management also affects the competitive advantage directly and significantly. To sum up, the ERP system influences the competitive advantage, directly and indirectly, as indicated by the path coefficient of 0.865. An exciting finding suggests that supplier relationship management mediates the effect of ERP on the competitive advantage. These results provide a significant implication for the supply chain theory and practice. The export-oriented manufacturer, therefore, may refer to this result in enhancing the competitive advantage

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