Using system dynamics approach to examine the impact of ERP and Lean on manufacturing performance

The benefits of Lean manufacturing and Enterprise Resource Planning (ERP) for manufacturing systems have been confirmed in the literature. However, there are continuing debates on the effects of these two systems on the manufacturing performance. Given this trend, this paper aims at quantitatively examining these impacts and offers insights for the managerial implications. A system dynamics approach is used to illustrate how the performance changes under different scenarios using the real data of a case study at the textile and garment industry. The results highlight the role of Lean manufacturing itself and lend support to the view of the inefficiency of ERP system to manufacturing system. A suggestion to build ERP-based Lean system which ERP supports Lean production is made for industry managers to gain the benefits from the ERP system.