Logistics service develops rapidly in Viet Nam in recent years. However, Logistics service providers in Viet Nam is still at low level compared with developed countries. Information technology does not play important role in the Logistics development. In many countries, ERP is a key to boost information flow. ERP can provide manager with information more precisely and rapidly. Viet Nam companies day by day merge into that trend despite of difficulties in ERP implementation. Nevertheless, it is a must if companies want to improve Logistics activities.
54 Journal of Transportation Science and Technology, Vol 18, Feb 2016 BENEFITS AND ISSUES OF ERP IMPLEMENTATION IN VIETNAM NHỮNG LỢI ÍCH VÀ VẤN ĐỀ KHI TRIỂN KHAI ERP TẠI VIỆT NAM ThS Nguyễn Huỳnh Lưu Phương Bộ môn Thương vụ - Logistics, Khoa Kinh tế vận tải – Trường ĐH Giao thông vận tải Tp.HCM Abstract: Logistics service develops rapidly in Viet Nam in recent years However, Logistics service providers in Viet Nam is still at low level compared with developed countries Information technology does not play important role in the Logistics development In many countries, ERP is a key to boost information flow ERP can provide manager with information more precisely and rapidly Viet nam companies day by day merge into that trend despite of difficulties in ERP implementation Nevertheless, it is a must if companies want to improve Logistics activities Keywords: ERP implementation, Logistics improvements Tóm tắt: Logistics dịch vụ có tốc độ phát triển mạnh mẽ Việt nam Tuy nhiên, Logistics Việt Nam thời kỳ sơ khai, chưa thực đạt trình độ nước tiên tiến Điều thiếu việc ứng dụng công nghệ thông tin hoạt động Logistics Một ứng dụng phổ biến cơng nghệ thơng tin ERP ERP đóng vai trò ngày quan trọng việc đẩy mạnh dòng dịch chuyển thơng tin hoạt động Logistics, giúp đáp ứng nhu cầu thông tin nhanh xác Các doanh nghiệp Việt Nam dần bắt đầu xu hướng tiên tiến giới việc ứng dụng ERP không dễ dàng chút điều bắt buộc muốn cải thiện hoạt động Logistics doanh nghiệp Từ khóa: Triển khai ERP, nâng cao hoạt động Logistics Introduction In these recent years, the term “Logistics” is used widely all over the world In Viet Nam, it is not an exception Most of people in Viet Nam often think that Logistics is the process to optimize flow and storage of goods, services from the point of origin to the point of consumption to conform with the customers’ requirements They forgot the role of information flow within an enterprise which makes the operations’ efficient and effective If information flow is sluggish or obstructed elsewhere, all operations in an enterprise will be stopped immediately because information is a companion of work In order to achieve improved delivery performance, decreased lead times within the enterprise and improved efficiency and effectiveness, manufacturers need to have efficient planning and control systems that enable good synchronization and planning in all the processes of the organization Hence, there is a need for a standard software package, which equips the enterprise with the necessary capabilities to integrate and synchronize the isolated functions into streamlined business processes in order to gain a competitive edge in the volatile business environment Realizing the requirement of user organizations, some of the leading software companies have designed Enterprise Resource Planning software (also called ERP), which offers an integrated software solution to all the functions of an organization What is ERP ? ERP is a fully integrated business management system covering functional areas of an enterprise like Production, Finance, Accounting and Human Resource… It organizes and integrates operation processes and information flow to make optimum use of resources such as men, material, money and machine Taking information from every function, it is a comprehensive tool that assists employees and managers plan, monitor and control the entire business Once ERP is implemented, all functional areas just use one database, one user interface and one software It can connect all branches or instances despite of the geography This can lead to a result that there is no difference in the report, datum and information TẠP CHÍ KHOA HỌC CƠNG NGHỆ GIAO THƠNG VẬN TẢI, SỐ 18-02/2016 Figure ERP Structure Source: Peacesoft ERP main components include Human resource management, Customer relationship management, Manufacturing resource management, Supply chain management, Financial resource management…ERP is built with some special characteristics It easily responds to changes of an enterprise, client server technology makes system be able to be changed once and all components will be affected It is a combination of many functional modules so that the attachment and detachment one of them cannot make the system shutdown ERP can also accept thirdparty plugins to enhance the system with more powerful functions ERP is suitable for wide range of business organizations because the software makers integrate a lot of business practices to give more experiences to end users and to facilitate their activities ERP Benefits ERP is the only place that an order exists from the time of being placed to the end of order life cycle So, manager can monitor the status of the order and give controls if it is necessary Without ERP, he may receive many reports from many departments to know exactly the current status Apart from that, ERP can provide organization with many benefits such as: Reduction in paper documents Improvement in timeliness of information Greater accuracy of information Improvement in cost control Faster response to customers, business operations, market conditions Achievement in competitive advantage 55 Improvement in supply-demand linkage with remote locations and branches in different countries Unique customer database usable by all applications Promise for ERP implementation in Viet Nam business organizations One of obstacles of ERP implementation is the high cost To implement ERP with full functions, it costs up to millions of US dollars, especially the solution from well-known software makers such as SAP, Oracle, Microsoft, and Epicor It is more appropriate for large size companies However, that statement does not mean that there is no chance for small and medium size companies ERP can be expanded or shrunk to conform client needs The software makers will detach or attach some components to minimize the cost without affecting the effectiveness of the ERP In Viet Nam, FPT Software, FAST, Lacviet, itg Viet Nam… are good software providers with acceptable price Though, they are agencies for some foreign companies with the role of supporting the implementation of ERP These companies will hold training program, provide maintenance service, technical assistances, etc… They made their own software before but the competition and the limitation in technology cause them to stop their business Nowadays, customers can easily request an ERP solution without any difficulties in Viet Nam Many companies in Viet Nam pay attention to the benefits of ERP Vinamilk paid more than million US dollars to get SAP ERP solution Unilever Viet Nam, Pepsi Co, Bibica, Đồng Tâm corporation, Vietnam airlines, PNJ, Đông Á plastic… also implemented one Due to the small scale of capital, some companies can only apply main components of ERP such as Customer relationship management, Accounting, Warehouse management (Inventory control predominantly), Document administration Eleminating some important components (Production management, Procurement management, Supplier administration…) 56 Journal of Transportation Science and Technology, Vol 18, Feb 2016 results the system is not so powerful as it should be Table Some Viet Nam companies applying ERP Company Thép Việt Unilever Vietso Petrol P&G Pepsi Savimex Bibica Eurowindow Diethelm Prime Group Panasonic Vinamilk PNJ … ERP provider SAP Oracle Oracle SAP Oracle Oracle Oracle Oracle EBS SAP Oracle EBS SAP SAP Oracle Supporter FPT FPT FPT FPT FPT FPT FPT FPT FPT FPT FPT FPT FPT Source: Compiled by Nguyễn Huỳnh Lưu Phương (2015) Some issues can be pointed out while implementing ERP in Viet nam: Unrecognized needs: Some companies still want to implement ERP even they not really need it It wastes much money while the effectiveness fades away ERP is only suitable when the company has many departments that need connecting, a lot of information to be processed and the data to be gathered into one point Capital constraints: ERP requires much money so small companies find it difficulty accepting Lack of specialist assistances: Specialists play an important role in ERP implementation They give advices to company that which one is the most suitable and provide technical assistances They also solve some problems that is hardly to find someone else to it Most of specialists have knowledge about information technology The graduate from University of IT though they still need to know about the managment knowledge No long term plan: When ERP is accepted, it is must be based on a long term plan because the problems are difficult to overcome in short time Some companies just see the immediate benefits while they cannot imagine what will occur and forecast demand in the future This causes the waste in investment No utilization: It highly cost to implement ERP but some companies does not take advantage of its capabiltiy ERP is based on client server technology, so, it is better to be executed on network environment The internet infrastructure in Viet Nam is still underdeveloped This is the reason why ERP is inhibited from proving its powerful abilities There is no link between instances in a company Conclusion Logistics does not mean the efficiency and effectiveness of flow and storage of goods, it also needs the efficiency and effectiveness of information flow To achieve good performance of Logistics, ERP is one of the best solutions to make the information flow smoothly and rapidly within an enterprise However, the implementation of ERP may encounter some obstacles It is not easy to be implemented successfully Companies need well-trained staff, commitment, long trial periods and much of capital Alongside the difficulties, companies will get many benefits of reduction in operation costs In Viet Nam, many companies now realize the importance and implement step-by-step This will promise future opportunities to develop and make Logistics service be more optimized References: [1] Le Hung (2009), Toàn cảnh ứng dụng ERP 2008, PC-WORLD Viet Nam [2] Raymond McCleod, George P.Schell (2007), Management Information System, Pearson Prentice Hall [3] Son Thuy (2010), ERP dành cho môi trường ổn định, PC-WORLD Viet Nam [4] Togar M Simatupang (2011), Logistics Information System, Masyarakat Logistik Indonesia [5] Vu Anh (2013), Cạnh tranh với giải pháp ERP, Báo đầu tư Ngày nhận bài: 19/01/2016 Ngày chấp nhận đăng: 03/02/2016 Phản biện: TS Trương Quang Dũng ... efficiency and effectiveness of flow and storage of goods, it also needs the efficiency and effectiveness of information flow To achieve good performance of Logistics, ERP is one of the best... away ERP is only suitable when the company has many departments that need connecting, a lot of information to be processed and the data to be gathered into one point Capital constraints: ERP. .. environment The internet infrastructure in Viet Nam is still underdeveloped This is the reason why ERP is inhibited from proving its powerful abilities There is no link between instances in a company