The Implementation of Enterprise Resource Planning and Product Data Management in Semiconductor Related Industries: An Empirical Study in Taiwan

By Lin, Wen-Tssan; Yang, Hui-Jen et al. | International Journal of Management, March 2006 | Go to article overview

The Implementation of Enterprise Resource Planning and Product Data Management in Semiconductor Related Industries: An Empirical Study in Taiwan


Lin, Wen-Tssan, Yang, Hui-Jen, Lin, Ming-Yi, International Journal of Management


Along with the development of information technology and fierce competition among industries, how to best use, manage and apply enterprise resources has become a critical issue in industrial transformation. In practice, management concepts can be implemented through Enterprise Resource Planning (ERP) and Product Data Management (PDM). Providing required information in real-time thus becomes a key point for enterprise survival in the efficiency-based semiconductor related industries of Taiwan. This study attempts to understand the current implementation of ERP and PDM in the semiconductor related industry in Taiwan using a field survey method. This study comprises two parts. First, a questionnaire survey concerning the implementation of ERP and PDM is conducted and analyzed statistically to explore the application of ERP and PDM in the semiconductor related industries of Taiwan. Second, the current state of the implementation of ERP and PDM as revealed in the research results and in the on-site interviews with semiconductor related manufacturers provide ideas for enterprises for implementing their ERP and PDM.

1. Introduction

Promoted by the American Production and Inventory Control Society (APICS) since 1970, MRP has been developed for several decades and has become MRP II by extension to the marketing, finance and personnel dimensions (Sum et al., 1997). MRP II is a production control system and has been adopted in the American and Taiwanese manufacturing industries to integrate limited internal resources and to overcome fierce competition. However, because of globalization, information systems should provide firms with the communication and analytical power to trade and manage their businesses on a global scale. MRP II is insufficient to cope with this trend.

To become effective and profitable participants in international markets, enterprises require more powerful information systems to help them extend their geographic reach, offer new products and services, reshape workflow, and perhaps profoundly alter their approach to business. Enterprise Resources Planning (ERP) thus is the right choice for businesses seeking to recast their process of management. It provides powerful new capabilities to help managers in planning, organizing, leasing and control (Na et al., 2003; Ralph, 1998). ERP has been among the fastest growing software and most important developments in IT in the 1990s. Davenport (1998) stated "while the rise of the Internet has received most media attention in recent years, the business world's embrace of ERP systems may in fact be the most important development in the corporate use of IT in the 1990s." Currently, many companies already use ERP to make planning, forecasting, and monitoring more precise than previously"increase planning, forecasting and monitoring precision.

ERP is a business management system that integrates all facets of a business, including planning, manufacturing, sales, purchasing, marketing, and finance, so they can cross organizational boundary and be more closely coordinated by sharing information (Davenport, 1998; Tim, 1998; Van der Aslst, 2000). The Market Intelligence Center (MIC) in Taiwan defines ERP narrowly as "resources inside an enterprise" and broadly as "an enterprise operation and management system of integrating external information" (MIC, 2003).

According to the field survey conducted by MIC in 1999, pressures from large-scale firms and the Y2K effect were two main drivers of the popularity of ERP on the software market. The prosperous development of ERP is closely related to the role played by the information, electronic and semiconductor manufacturers in the global supply chain system. Facing the trend of globalization and international competition, international large-scale manufacturers have started to ask their collaborating factories to implement ERP to achieve synergies in the supply chain management (Gould, 1997; Bragg, 1997).

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