Henk Akkermans

Vicious and virtuous cycles in ERP implementation : a case study of interrelations between critical success factors

ERP implementations are complex undertakings. Recent research has provided us with plausible critical success factors (CSFs) for such implementations. This article describes how one list of CSFs (Somers & Nelson, 2001) was used to analyse and explain project performance in one ERP implementation in the aviation industry. In this particular case, poor project performance led to a serious project crisis but this situation was turned around into a success. The list of CSFs employed was found to be helpful and appropriate in explaining both the initial failure and the eventual success of the implementation. CSFs in this case appeared to be highly correlated, ie changes in any one of them would influence most of the others as well. The reversal in performance after the project crisis was caused by substantial changes in attitudes with most of the stakeholders involved, such as top management, project management, project champion and software vendor.

The impact of ERP on supply chain management: Exploratory findings from a European Delphi study

Abstract This article presents results from a Delphi study on the future impact of enterprise resource planning (ERP) systems on supply chain management (SCM). The Delphi study was conducted with 23 Dutch supply chain executives of European multi-nationals. Findings from this exploratory study were threefold. First, our executives have identified the following key SCM issues for the coming years: (1) further integration of activities between suppliers and customers across the entire supply chain; (2) on-going changes in supply chain needs and required flexibility from IT; (3) more mass customization of products and services leading to increasing assortments while decreasing cycle times and inventories; (4) the locus of the driver’s seat of the entire supply chain and (5) supply chains consisting of several independent enterprises. The second main finding is that the panel experts saw only a modest role for ERP in improving future supply chain effectiveness and a clear risk of ERP actually limiting progress in SCM. ERP was seen as offering a positive contribution to only four of the top 12 future supply chain issues: (1) more customization of products and services; (2) more standardized processes and information; (3) the need for worldwide IT systems; and (4) greater transparency of the marketplace. Implications for subsequent research and management practice are discussed. The following key limitations of current ERP systems in providing effective SCM support emerge as the third finding from this exploratory study: (1) their insufficient extended enterprise functionality in crossing organizational boundaries; (2) their inflexibility to ever-changing supply chain needs, (3) their lack of functionality beyond managing transactions, and (4) their closed and non-modular system architecture. These limitations stem from the fact that the first generation of ERP products has been designed to integrate the various operations of an individual firm. In modern SCM, however, the unit of analysis has become a network of organizations, rendering these ERP products inadequate in the new economy.

Virtuous and vicious cycles on the road towards international supply chain management

An increasing number of companies claim to pursue international supply chain management (ISCM), but the empirical evidence of successful implementation programs is still scarce. This paper aims to contribute to theory‐building in this area by presenting an exploratory causal model of goals, barriers, and enablers on the road towards effective ISCM. The model was established in a workshop with a panel of content matter experts. The results point at a disturbingly gloomy picture of vicious cycles frustrating the implementation of effective ISCM strategies. Fortunately, it appears that it is possible to apply the same generic mechanisms to create a virtuous cycle, for instance by promoting cross‐functional careers and by actively responding to demanding customer needs. The challenge ahead is to test the model’s content and validity.

Travail, transparency and trust: A case study of computer-supported collaborative supply chain planning in high-tech electronics

Describes a case study of supply chain collaboration facilitated by a decision support environment in a high-tech electronics supply chain with multiple independent companies. In a business process called collaborative planning, representatives from these companies jointly take decisions regarding production and shipments for a large part of their collective supply chain. Particular attention is given to the interactions between levels of partner trust and information transparency on the one hand, and resulting improvements in supply chain performance on the other. The importance of hard work in developing the work flows necessary to support this joint planning process in starting a virtuous cycle of steadily increasing levels of all these aspects of supply chain collaboration is stressed. A theoretical model of the interactions between these aspects is presented, based upon a review in the literature. This model is then explored in an analysis of the collaborative planning case. Contains suggestions for further research and managerial recommendations.

Relevance assumed: a case study of balanced scorecard development using system dynamics

The balanced scorecard (BSC) has become a popular concept for performance measurement. It focuses attention of management on only a few performance measures and bridges different functional areas as it includes both financial and non-financial measures. However, doubts frequently arise regarding the quality of the BSCs developed as well as the quality of the process in which this development takes place. This article describes a case study in which system dynamics (SD) modelling and simulation was used to overcome both kinds of problems. In a two-stage modelling process (qualitative causal loop diagramming followed by quantitative simulation), a BSC was developed for management of one organizational unit of a leading Dutch insurer. This research illustrates how, through their involvement in this development process, management came to understand that seemingly contradictory goals such as customer satisfaction, employee satisfaction and employee productivity were, in fact, better seen as mutually reinforcing. Also, analysis of the SD model showed how, contrary to ex ante management intuition, performance would first have to drop further before significant improvements could be realized. Finally, the quantitative modelling process also helped to evaluate several improvement initiatives that were under consideration at the time, proving some of them to have unclear benefits, others to be very promising indeed.

Group Model-Building To Facilitate Organizational Change: An Exploratory Study

An important objective of most system dynamics modeling projects is to support strategic decision making. This paper describes a (qualitative) modeling project where the primary goal was to establish consensus regarding the problem situation and commitment to the action necessary for change. The project was conducted with a group of mid-level managers of a company at the beginning of a period of organizational change. This group of managers engaged in a series of group model-building sessions, facilitated by the authors. Extensive evaluation of the project results indicates that consensus and commitment with regard to the problem have been established, but that the project was not successful in creating a full consensus on the course of action.

Emergent supply networks: system dynamics simulation of adaptive supply agents

Supply chain networks of independent firms collaborating to serve a final market are becoming a normal business phenomenon. Yet at present it is not clear if and how such networks can achieve stability. Nor is it obvious what successful managerial guidelines might be for individual companies operating in such networks regarding collaboration with the other firms involved. This exploratory study investigates these questions using a generic simulation model of 100 actors distributed over three supply echelons. The model was developed in a system dynamics simulation environment using design principles from agent-based modeling. In this model, each actor holds mental models of the performance of the other actors he is interacting with. Preferences for doing business with these other agents are driven by this performance. Agents differ in the degree in which they value long-term relationships over short-term performance. Model analysis shows that stability in this complex network emerges spontaneously as relative preferences become fixed over time. This lock-in occurs fairly early in the simulation during a period of considerable stress in the various supply chain echelons. Overall, those agents that base their relative preferences primarily on the short-term performance of their counterparts fare somewhat better than agents focussing on the nature of their long-term relationships. A real-world example of a supply network exhibiting characteristics such as the ones observed in the model is presented. Methodological considerations, model limitations and tentative managerial guidelines are discussed.

Capturing the dynamics of facility allocation

States that determining the configuration of a company’s facilities has become a complex issue in today’s globalizing business environment. Existing allocation models often fail to address developments over time and “soft” issues. Therefore, an existing design method to support decision making on strategic allocation issues was extended with a system dynamics component. This extension allows decision makers to capture the inherent dynamics of allocation decisions. In addition, it becomes possible to incorporate “soft” variables in predominantly quantitative models. Applies the extended design method in a case study involving a relocation problem of a mid‐sized company in the Dutch metal working industry. Demonstrates the value of this method in terms of managerial decision support, not only for this specific problem, but also for future strategic allocation issues.

Developing a logistics strategy through participative business modelling

Introduces the participative business modelling method (PBM), a management consulting method based on a synergetic mix of (system dynamics) modelling, group knowledge elicitation techniques and a process consultation attitude. PBM is a method well‐suited to support managers in their strategic decision‐making processes, in particular in the field of operations management, because it provides support in dealing with both the technical and organizational complexities of strategic decision making. Presents a case study where PBM was used to assist in the development of a European logistics strategy for an American pharmaceutical firm setting up operations in Europe. Discusses findings from the analysis of the evaluation interviews with project participants, which contain valuable lessons, not just for the PBM method itself, but also for the theory of strategic decision making that lies at the basis of the PBM method.

The service bullwhip effect

Purpose This paper sets out to explore whether and how the bullwhip effect, as found in product supply chains, might also manifest itself in services, as well as what policies can be successful for mitigating it. Design/methodology/approach A combination of analytic methods was used—inductive case analysis and analysis of data from two service supply chains in the telecom industry. Findings Empirical evidence from two cases was examined and provides support for the presence of a service bullwhip effect. Quantitative and qualitative case data were used to explore how this effect manifests itself in services, the distinctive drivers of the bullwhip effect in services, and the managerial actions that can either trigger or mitigate these bullwhip effects. Eight propositions are developed. Three types of characteristics that potentially make the bullwhip effect worse in services than in manufacturing are identified: (1) the destabilizing effects of manual rework in otherwise automated service processes, (2) the omission of accurate and timely data on rework volumes upstream in the chain, pointing at future bullwhip effects downstream, and (3) the lack of a supply-chain mindset within the various departments jointly responsible for delivering the service, leading to longer delays in reacting to service bullwhips as they develop over time. Originality/value This paper explores an area that has been well researched in manufacturing, but not in services, and it contributes to both the theory and practice of service supply chains. Research limitations The research is based on two cases within a single industry, limiting generalizability. The propositions developed need testing in a wider set of contexts, including hybrid service and product supply chains. Practical implications The implications of this research can help organizations prevent or reduce the negative impact of planned and unplanned fluctuations in their service supply chains.