The Effect of Procedure Change, TQM and ERP Implementation to Company Performance on Manufacturing Industries

Zeplin Jiwa Husada Tarigan · Widjojo Suprapto · Sautma Ronni Basana

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ERP Systems Implementation and Impact Quality and Supply Management Quality and Management Systems

Abstract

The initial changes in standard procedures made by manufacturing companies when implementing ISO 9000: 2008 system (SNI / National Indonesia Standard) are establishing procedures related to the system in each department of the companies. These changes are related to the standard operating procedures, work instructions, and forms. The second stage of changes happens during the implementation of the Enterprise Resource Planning (ERP) in which the companies have to integrate various departments into one integrated data system. These processes of changes in the companies are called business process redesign or re-engineering (BPR). The changes are conducted by making adjustments to all procedures in the companies so that they can fit into applying ERP modules. Proper adjustments will increase the employment performance for manufacturing companies. The data are collected from 100 questionnaires distributed to the manufacturing companies in East Java, and can further analyze from 77 questionnaires with a 77% response rate. Data processing is performed by using structural equation modeling of PLS and finds that BPR does not provide a direct improvement to the implementation of ERP in the companies. The changes to the standard procedure of the company, or BPR, give an impact of 0.422 to the implementation of ISO 9001. The implementation of ISO 9001 brings an impact of 0.763 on the implementation of ERP. The implementation of ISO 9001 does not affect the company performance, but the implementation of ISO gives a significant impact to the company's performance of 0.664. The changes in standard procedures performed in the company, often called BPR, can improve the company's performance by 0.2138, obtained through the implementation of ISO 9001 and the implementation of ERP.

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References

2004A framework of ERP systems implementation success in China: An empirical study 2002Relationship between TQM and performance of Singapore companies 2005Synergies between supply chain management and quality management: emerging implications 2007Simultaneous consideration of TQM and ISO 9000 on performance and motivation: An empirical study of Spanish companies 2007Total quality management and performance 2012Total Quality Management Practices’ Effects on Quality Performance and Innovative Performance 2006Adoption of Enterprise Application Software and Firm Performance 2003Implementing enterprise resource planning systems with total quality control and business process reengineering

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