Uncertainty and contingency plans in ERP‐controlled manufacturing environments

Abstract

PurposeThis research aims to determine to what extent uncertainties affected manufacturing enterprises' delivery performance, to analyse the performance of their contingency plans in dealing with uncertainties and to explore what technical and organisational factors affected managers' decisions to implement an uncertainty‐diagnosing model.Design/methodology/approachThe methodology included a literature review, postal questionnaire survey and telephone interviews.FindingsA total of 30 companies responded to the questionnaire, 56 per cent of which thought their systems worked well and 80 per cent reported that material shortages were responsible for tardy delivery performance. Tardy delivery was directly or indirectly caused by poor supplier delivery performance in the opinion of 92 per cent of respondents. Seven companies had developed an uncertainty‐diagnosing model. Not all companies needed to adopt the model.Research limitations/implicationsUncertainty and contingency plans were investigated in UK and Chinese organisations using MRP/MRPII/ERP systems. Therefore, the findings will be directly relevant to the organisations, but may be adapted to other similar organisations.Practical implicationsA detection method was proposed to determine the steps required for organisations to adopt the uncertainty‐diagnosing model.Originality/valueThe paper provides some empirical data on uncertainty and the contingency plans used in ERP‐controlled manufacturing environments in organisations in the UK and China. Data on uncertainty are scarce and this research gives further insights into the ways managers perceive and handle uncertainty.