Supply chain bolt‐ons: investment and usage by manufacturers

Abstract

Purpose

While past IT investment research has looked at a number of important factors, one issue that needs to be resolved in supply chain IT is the ability of different types of software to improve a firm's productivity or sales. Specifically, the purpose of this paper is to investigate which factors influence the number and types of supply chain bolt‐ons systems that are used by companies to improve system functionality.

Design/methodology/approach

In total, 2,000 questionnaires and personalized cover letters were mailed to qualified individuals who were selected from APICS's active membership and employed in manufacturing firms in the USA and 187 useful responses (a 9.3 per cent return rate) were obtained.

Findings

The results were encouraging and they indicated the use of bolt‐ons were most common in large firms, firms with defined plans and objectives, firms with existing ERP systems, and firms who believe that the application of best practices is of maximum importance. Most importantly, Bolt‐on usage did not seem to be impacted by recent sales or productivity increases, but was instead a result of a critical need in the supply chain.

Research limitations/implications

This research used a single survey methodology and all measures were collected at single point in time. This may limit its generalizability to all time periods and conditions.

Practical implications

Investment in supply chain IT like all strategic initiatives does not end with its installation and implementation but requires continuous improvement. Bolt‐ons seem to be one way firms customize their systems to optimize performance and develop a competitive advantage.

Originality/value

The paper employed a survey study approach to examine investments in Bolt‐on technologies used to supplement and/or augment ERPs across a wide variety of companies. This is a particular novel research area because much of the existing ERP research has focused almost exclusively on ERP deployment and integration with other systems; while relatively little research has focused on those key Bolt‐on systems that might be needed to enhance ERP systems once they have been installed.

Citation

Watts, C.A., Mabert, V.A. and Hartman, N. (2008), "Supply chain bolt‐ons: investment and usage by manufacturers", International Journal of Operations & Production Management, Vol. 28 No. 12, pp. 1219-1243. https://doi.org/10.1108/01443570810919378