Assessing the Benefit of Adopting ERP Technology and Practicing Green Supply Chain Management toward Operational Performance: An Evidence from Indonesia

SANTOSO, RUBEN WAHYU and Siagian, Hotlan and Tarigan, Zeplin Jiwa Husada and Jie, Ferry (2022) Assessing the Benefit of Adopting ERP Technology and Practicing Green Supply Chain Management toward Operational Performance: An Evidence from Indonesia. [UNSPECIFIED]

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Abstract

The recent concern on the environmental protection and COVID-19 issue is increasingly affecting the manufacturing industry. This research assessing the benefit of adopting ERP technology and practicing green supply chain management toward operational performance in manufacturing industry. The study is essential to provide insight for the manufacturing industry regarding the consequences and benefits of practicing the green supply chain and adopting ERP technology amid the current constraints of the environmental protection issue and the COVID-19 pandemic. The study has surveyed 122 companies domiciled in Indonesia. Data collection used a questionnaire designed with a seven-point Likert scale. Questionnaire created in Google form, printed and distributed using social media and postal mail. Data analysis used SmartPLS software version 3.0. The result revealed that ERP adoption enables green purchasing, production, distribution, and operational performance. Furthermore, operating performance is directly affected by green purchasing and green production. However, operating performance was not supported by green distribution. In addition, ERP adoption indirectly improves operational performance through green purchasing and green production. But ERP adoption did not affect operational performance through green distribution. This result provides essential insight for the manager in the manufacturing industry that adopting ERP in the era of the COVID-19 pandemic and practicing environmental protection such as green purchasing, green production enhances operational performance. In summary, the result of this study encourages the practitioner to adopt environmental protection in running their business since it benefits the company. While there are very few studies examining the relationship between ERP adoption, green supply chain practices, and operational performance, this study is essential in terms of exploring the mediating role of green supply chain practices on the effect of ERP adoption on operational performance. Thus, these research findings could enrich the current research in the supply chain management context.

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