Title: Analysis of two different automated purchase order systems in telecom electronics manufacturing unit

Authors: Lauri Rantala, Olli-Pekka Hilmola

Addresses: Department of Marketing, Turku School of Economics, Rehtorinpellonkatu 3, FIN-20500 Turku, Finland. ' Lappeenranta University of Technology, Kouvola Research Unit, Prikaatintie 9, FIN-45100 Kouvola, Finland

Abstract: In this research we analyse how automated purchase order systems, implemented either in an |entire perspective| or |semi-automated perspective|, have produced results in inventory turns perspective. Longitudinal analysis reveals that an entirely automated purchase order system improves inventory turns, and variation in performance between different ordered components decreases. However, a semi-automated system does not bring such clear results. Regression analysis reveals that, due to the discrete demand nature of ERP, the decreased order quantities do not directly result in improved inventory turns. Research also reports that MRP nervousness and component buffering services represent caveats for future APO implementations and use.

Keywords: purchasing automation; human interaction; ERP; enterprise resource planning; purchase order systems; telecoms; telecommunications industry; electronics manufacturing; inventory improvement; MRP nervousness; component buffering.

DOI: 10.1504/IJMTM.2010.029455

International Journal of Manufacturing Technology and Management, 2010 Vol.19 No.1/2, pp.140 - 164

Published online: 30 Nov 2009 *

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