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

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.

Supply Chain Resilience and Operational Performance: The Role of Digital Technologies in Jordanian Manufacturing Firms

“…According to Abeysekara et al (2019), firms that pursue high SCR levels are likely to achieve a higher level of SCR in the future. On the other hand, many studies have focused on measuring the operational performance level in terms of cost and delivery only (e.g., Hallgren and Olhager 2009;Nawanir et al 2013;Gaudenzi and Christopher 2016) and their results were inconsistent with other studies that followed the same approach (Santoso et al 2022;Abdallah et al 2014;Khan et al 2022), whereas this study takes another perspective when it focuses on operational performance in terms of achieving a competitive advantage through effectiveness and quality.…”

“…Primarily, operational performance is measured in terms of flexibility, cost, quality, and delivery (Khan et al 2022;Santoso et al 2022;Thoumy and Jobin 2020;Usman et al 2020;Nabass and Abdallah 2019). A company's operational performance also highlights its competitive position among firms in the SC, and to enhance performance, each firm in the SC must improve its overall operating efficiency (Santoso et al 2022).…”

“…Primarily, operational performance is measured in terms of flexibility, cost, quality, and delivery (Khan et al 2022;Santoso et al 2022;Thoumy and Jobin 2020;Usman et al 2020;Nabass and Abdallah 2019). A company's operational performance also highlights its competitive position among firms in the SC, and to enhance performance, each firm in the SC must improve its overall operating efficiency (Santoso et al 2022). As Usman et al (2020) explained, operational performance is what can be achieved by a person or group of people in an organization to achieve organizational goals in accordance with the authority and responsibility concerned.…”

“…Therefore, it is considered a competitive advantage if a company scores higher in one of the operational performance indicators due to a tactical resource, which is nearly used as a substitute for operational performance (Chahal et al 2020). Santoso et al (2022) used five indicators to measure operational performance: (1) improvement of the quality of the product, (2) reducing lead times or speeding up the delivery process, (3) increasing its competitive position in the market, (4) enhancing product development, and (5) an increase in international sales.…”

Influence of eco‐product innovation and firm reputation on corporate social responsibility and competitive advantage: A mediation‐moderation analysis

“…Companies must balance their benefits and costs while also maximizing profits and excellence in global markets, which ensures that they do not act contrary to different practices in sustainable management and emphasize eco‐innovation and responsibility that foster sustainability (Łaszkiewicz, 2019; Nguyen & Adomako, 2022; Nguyen et al, 2020; Santoso et al, 2022). Most companies using eco‐innovation techniques often choose to apply green innovation, which helps in reducing and avoiding damage to the environment (Leitão et al, 2019; Yurdakul & Kazan, 2020).…”