ERP and Value Chain Analysis: How Enterprise Resource Planning Solutions And Strategy Facilitate A Change In The Value Chain Thus Creating Competitive Advantage
Riley, Michael B.
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The main framework of this thesis is that enterprise resource planning (ERP) facilitates improvement to a company's value chain, thus generating significant competitive advantage. ERP is the integration of a business software solution into a company's activities and strategy. The integration is designed to increase the manageability of the key processes supporting business operations and infrastructure. The motivation to write this thesis was generated by this writer's experience with the Edward C. Levy Company of Dearborn, Michigan during the summer of 2004. The Edw. C. Levy Co. is an international family of companies that offers technology products and services including slag and steel mill services, construction aggregate production and distribution, ready-mix concrete, bituminous asphalt manufacturing and paving, road construction, trucking and transportation logistics. Based in Dearborn Michigan, Levy has over 3,000 employees on four continents. The experience included an active role on Levy's L.A.S.E.R. project team, which was charged with implementing Oracle as its ERP. The theoretical premise and motivation behind implementing an ERP project is the increased efficiency contributing to profitably, cost reduction, and customer satisfactio~ as well as increased efficiencies around the supply-chain and the consolidation of information. lbis overall business improvement creates a differentiation of cost and quality, giving those who use ERP an advantage over their competitors. Michael Porter, the well known theorist behind competitive strategy/advantage analysis, provides the framework by which ERP solutions and their success will be analyzed. A company's ERP project will be assessed by the level of improvement in terms of Porter's value chain in the areas of productivity and customer satisfaction. The analysis of the data presented by ROI figures will clearly state that enterprise resource planning systems provide a significant benefit to the value chain, thus facilitating greater competitive advantage within an industry.
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