ERP: An Evaluation Model For Manufacturing SME

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A Summary of the Article, “Organizational Readiness to Adopt ERP: An Evaluation Model for Manufacturing SMEs” by Louis Raymond, Suzanne Rivard and Danie Jutras
In the previous years, ERP had been only used by large organizations. However, this trend has changed because even SMEs are currently making use of ERP, despite the technology being complex and enormous for SMEs. It is because of this change of trend that Louis Raymond, Suzanne Rivard and Danie Jutras, in this article, are proposing and validating a framework which helps to analysis the how ready a SME is to adopt and implement ERP system. These scholars narrow their focus to a manufacturing sector.
In the introductory part, Louis Raymond, Suzanne Rivard and Danie Jutras express the
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Raymond, S. Rivard and D. Jutras notes that irrespective of the high costs involved and risks of failure in the implementation part SMEs firms in the manufacturing sector can be motivated in three ways to adopt ERP systems and this includes, technologically, operationally and strategically. These motivations act as the key parameters in assessing how ready an SME is for adoption of ERP system because they are technologically, organizationally and environmentally conditioned. Motivation and context are elements of great importance in the assessment because large firms are different from small ones. A similar framework proposed by Tornatsky and Fleischer also is similar to L. Raymond, S. Rivard and D. Jutras’ framework. When both innovation theory and potential for EDI model are diffused into this model presented by L. Raymond, S. Rivard and D. Jutras, then the readiness is perceived in four dimensions namely external pressure, organization’s predisposition, type of the processes the business has and the perceptions stakeholders have on …show more content…
Raymond, S. Rivard and D. Jutras, which has four components. On regard to the organizational context component, it was recorded that all the firms subjected into this research had independent management units and were involved in subcontracting business. Over 50% of these firms either manufactured or modified products to suit client’s needs. The cycle of operation was a direct function their main business. Some firms had single annual order, which had fixed requirements of the quantity needed and date of delivery. Nine of the companies were ISO certified and expressed satisfaction with this certification as it helped them get business. Nine of the firms made use of the just-in-time production and the others were very flexible on the way they produced their products for their clients. Only one firm had adopted ERP, while nine of the others either using MRP or MRP II systems. Many firms expressed dissatisfaction of the software flexibility at operational level. Some firms used parallel developed systems to get financial reports for decision making while others complained they did not have such information to decide. Some complained of lack of real time data

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