1. THE RELATIONSHIP BETWEEN EFFECTIVE STRATEGY AND ENTERPRISE
RESOURCE PLANNING (ERP) SYSTEMS BUSINESS PROCESSES: A CRITICAL
FACTOR APPROACH
by
W. Allen Huckabee Jr.
JUDITH L. FORBES, PhD, Faculty Mentor and Chair
CHARLOTTE NEUHAUSER, PhD, Committee Member
DANIEL C. PARKER, PhD, Committee Member
Barbara Butts Williams, PhD, Dean, School of Business
A Dissertation Presented in Partial Fulfillment
Of the Requirements for the Degree
Doctor of Philosophy
Capella University
March 2013
3. Abstract
Current research on enterprise resource planning (ERP) system success in creating a
competitive advantage reveals a gap in linking ERP business processes to a competitive
advantage. Previous research on building capabilities suggested that combining routines
and practices, technology, and know-how allows a firm to create a capability of strategic
importance. This study seeks to investigate the link between the information effect of
business processes implemented in an ERP system and a component of total asset
visibility (TAV) to determine whether the information effect could contribute to a
strategic objective in maintaining a competitive advantage. Statistically significant
correlations exist between the information effect of maintenance management business
processes and the strategic capability of visibility of assets in maintenance at both the
tactical and operational level of strategy, specifically Army strategy. Correlation and
regression analysis were used to investigate a statistical dataset using purposive sampling
to examine the relationship between effective strategy and the information effects of
maintenance business processes. The statistically significant results of this study indicate
that the information effect of ERP business processes provides organizational leaders
with the information necessary to evaluate an organization’s maintenance capabilities at
the operational level, while providing the information to redirect repair parts to
equipment that is more essential to the organization’s mission than other equipment that
is non-essential. This study suggests that if a public sector organization identifies, maps,
and implements in an ERP the business processes that contribute to a strategic goal, the
organization will perform better than other organizations.
4. iii
Dedication
I dedicate this to my wife, Dianna, and children Billy, Zachary, and Samantha.
Without their support and understanding I could have not achieved what I have or
pursued my education goals and aspirations, which culminated with this document and a
PhD. Thank you all, and I love you all!
5. iv
Acknowledgments
I acknowledge the following people for supporting me throughout the PhD
learning process, as each of these individuals contributed assistance to my PhD journey.
Mr. Jeffrey Bales, Mr. Howard (Lee) Dixon, Dr. Venkat Bommineni, MAJ Marcus
Smoot, Dr. Randy Sherbs, and Ms. Robin Daniels all provided advice and support during
the brain storming sessions. Mr. Jeffrey Bales, Mr. Lee Dixon, and MAJ Marcus Smoot
were instrumental in providing motivation along this journey and helped to work out
issues when I was stuck. Ms. Robin Daniels was instrumental in guiding me through the
details of the statistics portion of Chapter 4. I also would like to acknowledge my Mentor,
Dr. Judith Forbes, for providing superior support and advice throughout the dissertation
process; thank you Dr. Forbes.
6. v
Table of Contents
Acknowledgments iv
List of Tables vii
List of Figures viii
CHAPTER 1. INTRODUCTION 1
Introduction to the Problem 5
Background of the Study 9
Statement of the Problem 10
Purpose of the Study 12
Rationale 13
Research Questions 14
Significance of the Study 15
Definition of Terms 17
Assumptions and Limitations 20
Conceptual Framework 23
Organization of the Remainder of the Study 26
CHAPTER 2. LITERATURE REVIEW 28
Total Asset Visibility (TAV) 29
Visibility of Operational Inventories 34
Visibility of Supplies in the Pipeline 35
Visibility of Assets in Maintenance 35
Army Maintenance and Logistics Processes 36
Supporting Logistics Business Processes 40
7. vi
Business Information 49
Enterprise Resource Planning Systems 52
Motivations for Using an ERP 53
ERP Success and Failure 56
Enterprise Success 58
The Benefits of Using an ERP 60
ERP Alignment and Fit 63
ERP Effectiveness 65
Integration 66
Process Management 68
Critical Success Factors 70
Resource Based View of the Firm 78
Resources 82
Capabilities 84
Core Capabilities 88
CHAPTER 3. METHODOLOGY 92
Research Design 92
Population and Sample 95
Instrumentation and Measures 100
Data Collection 101
Data Analysis 102
Validity and Reliability 103
Ethical Considerations 103
8. vii
CHAPTER 4. RESULTS 105
Database Demographics 105
Validity and Reliability 107
Normality of Data 108
Homogeneity of Variance 110
Post-hoc Test 111
Linear Regression 111
Research Questions 112
Summary of Results 115
CHAPTER 5. DISCUSSION, IMPLICATIONS, RECOMMENDATIONS 116
Summary of Research Findings 116
Conceptual Framework 118
Limitations 118
Future Research 120
REFERENCES 123
APPENDIX A. MISSION CRITICAL FUNCTION AND CRITICAL MISSION 133
FUNCTION MATRIX
9. viii
List of Tables
Table 1. Logistics Information Systems with Strategic Orientation 3
Table 2. Variables Relevant to this Study 36
Table 3. Business Processes that Support the Four Core Maintenance Processes 41
Table 4. Target Audience by User Role/Participant group 98
Table 5. Study Demographics by User Role 99
Table 6. Research Question, Hypothesis, and Data Element Matrix 102
Table 7. Records Removed 106
Table 8. Sample Demographics 107
Table 9. Tests of Normality 109
Table 10. Test of Homogeneity of Variance 110
Table 11. Non-parametric Tests of Homogeneity of Variance 111
Table 12. Equality of Means Test 111
Table 13. Regression Model Summary 112
Table 14. Model Coefficients 112
Table 15. Correlations for Maintenance Non-supervisory Users 113
Table 16. Correlations for General Leadership and Maintenance Supervisory 115
Users
Table A1. Mission Critical Function and Critical Mission Function Matrix 133
10. ix
List of Figures
Figure 1.Dataflow for Legacy Information Systems 4
Figure 2.Conceptual Framework 26
Figure 3.Literature Review Map 29
Figure 4. Demographics by Employee Type 96
Figure 5.Demographics by User Role 97
Figure 6. Database Demographics 105
Figure 7. Histogram and Q-Q Plot for the Dependent Variable 108
Figure 8. Histogram and Q-Q plot for the Independent Variable 108
11. 1
CHAPTER 1. INTRODUCTION
The Army is transforming its policies and methods of logistics sustainment on the
battlefield to take advantage of technological advancements of the 21st Century. The
primary reason for this change is the need to reduce costs, reduce the logistics footprint,
shorten the logistics pipeline, and lighten the logistics load (Piggee, 2002). The new
methods for improved battlefield logistics will need a just-in-time delivery system and
innovative methods to monitor the logistics pipeline. To ensure military leaders will have
the assets to win on the battlefield when and where needed, military leaders will need
visibility of organizational assets in the logistics supply chain. The U.S. Army must build
an improved capability to provide military leaders access to timelier and accurate
logistics information about the “location, movement, status, and identity of personnel,
equipment, and supplies” (Anderson, 2001, p. 2) in the logistics pipeline.
The U.S. Army will need to overcome many challenges in order to build an
effective TAV capability. For instance, the U.S. Army is employing over 16 logistics
information systems (LIS) used specifically to manage the Army’s logistics business
processes. These LIS include a range of logistics business processes including, but not
limited to, contract management, maintenance management, bulk fuel management,
ammunition, repair parts, asset management, order fulfillment, inventory management,
and financial processes. Butler and Latsko (1999) identified many of these systems built
and implemented across the Army in the late 1980’s. Over the years, many enhancements
have been made to these systems to improve the Army’s logistics business processes.
However, one significant limitation remains; these systems are still not integrated. The
12. 2
Government Accounting Office (2007) reiterated this point in an investigation’s findings
and suggested the issues that plague TAV programs are nonintegrated legacy information
systems, which contain redundant data (Government Accounting Office, 2007).
These legacy LIS are placed in combat, combat support, and combat service
support organizations to automate logistics processes, including supply, maintenance,
and logistics management business processes. For instance, the Standard Army
Maintenance Information System – 1 (Enhanced) (SAMS-1E) automates portions of The
Army Maintenance Management System’s (TAMMS) business processes. The Standard
Army Retail Supply System (SARSS) automates the Army’s supply processes below the
national level. These systems are employed at various levels of the Army’s hierarchy and
send, receive, and store logistics and transactional data to aid decision makers in
measuring the logistics readiness of Army organizations. Table 1 lists the common LIS
found in tactical and operational Army organizations that conduct maintenance and
logistics operations with their strategic orientations. These LIS are included in the
systems the Army plans to replace with the implementation of GCSS-Army.
These legacy LIS are not integrated, as illustrated in Figure 1. Each system sends
and receives batch logistics and transaction data files for roll-up to different levels in the
hierarchy through manual processes (removable media) or through secure file transport
protocol (SFTP) communications. For example, SAMS-1E processes maintenance and
maintenance supply related data files and transactions. SARSS processes supply data and
transactions to national vendors when repair parts are needed and not stocked in
inventories in any tactical supply support activity (SSA). National vendors return supply
13. 3
Table 1. Logistics Information Systems with Strategic Orientation
Logistics Information Systems Strategic Orientation
Standard Army Maintenance System – Enhanced (SAMS-E) Tactical/Operational
Standard Army Maintenance System – 1 Enhanced (SAMS-1E)a
Tactical/Operational/Strategic
Standard Army Maintenance System – 2 Enhanced (SAMS-2E)a
Operational/Strategic
Standard Army Retail Supply Systems (SARSS)b
Tactical/Operational
Note. Tactical orientation means that the system is used in an organization to perform and manage
maintenance operations that deploy with combat forces. Operational orientation means that the system is
used by field operating units that deploy with combat forces that support tactical level organizations.
Strategic orientation means that the system is used mostly at the strategic level of operations, which means
that these systems are operated by organizations that provide support to operational forces in both peace
time and during times of war and can deploy. Additionally, operational and strategic oriented organizations
provide back-up maintenance support to both tactical and operational organizations in peace time, and
rarely deploy. It is also possible to see a system used in a deploying organization that has a strategic
orientation, such as at the theater sustainment command, brigade, or division headquarters; these
organizations help to cross level maintenance activities to sustain combat power in a theater of combat
operations.
a.
In some organizations, SAMS-1 and SAMS-2 have been combined into a single system SAMS-1E and
SAMS-2E, respectively. These systems will be found in organizations until they are completely subsumed.
b.
Denotes systems that are not part of the study because they were not part of the IOT&E event, but are
provided here for awareness.
status to SARSS in batch transactions, which are then sent to SAMS-1E in batch to
update these systems.
National vendors route these same data to the Army Material Command’s
Logistics Support Activity (LOGSA). LOGSA then reconfigures the data and uploads
and stores the data in a series of databases for retrieval by military users (Butler &
Latsko, 1999), which connects the operational Army to the National logistics pipeline.
Military logisticians then retrieve visibility information from LOGSA’s database to view
the logistics pipeline, but this information is often outdated and error laden. Also, because
these systems lack integration, no system exists on the battlefield that provides military
leaders with asset visibility information in near-real time that is accurate and reliable.
14. 4
Figure 1. Dataflow for legacy information systems.
To overcome these challenges, the Army is collapsing over 16 legacy LIS into an
enterprise resource planning (ERP) system, the Global Combat Support System – Army
(GCSS-Army). This ERP is perhaps the largest ERP implementation in a public
organization serving over 160,000 logistics personnel and military leaders on a global
footprint with a $3 billion budget. Implementing an ERP will be the first real attempt at
integrating the Army’s tactical and operational logistics business processes into a single
system. Once completed, the ERP has the potential to create a promising TAV capability
15. 5
and serving as a springboard for future improvements in its logistics capability (Al-
Mashari, Al-Mudimigh, & Zari, 2003).
Introduction to the Problem
For over 20 years the US Army, and its parent, the Department of Defense (DoD)
have been trying build an effective TAV Capability. For its part, the Army has developed
several information systems and databases to improve the TAV capability. So far, the
issues that plague TAV programs are the LIS used to manage the Army’s logistics
business processes. Anderson (2001) described many of the information systems the
Army has developed, which must interface with, and provide asset data to, various
databases to provide this capability, among them is “GCSS-Army” (p. 9). Further,
Anderson suggested that this will be “challenging” because improving the TAV
capability will require the Army to make significant changes to its information
technology (IT) infrastructure to create an improved TAV capability. One significant
change currently underway is the implementation of an ERP to integrate its logistics
processes.
The Government Accounting Office (GAO) (2007) reported that even though the
Army is well on its way to implementing an ERP to integrate its disparate legacy LIS and
create a TAV capability, the Army still lacks an integrative method for performing TAV
of its assets, which exceed $140 billion. In fact, the GAO reported that by continuing the
use of ineffective automated logistics information systems with antiquated business
processes, the Army will fail to improve its TAV capability and gain control over its
assets. GAO also reported that if the Army continues to use ineffective information
16. 6
systems and business processes, the agency is in danger of creating a system that (a) will
not provide the desired level of capability (b) does not interoperate with other agencies
efficiently (c) is stovepiped in its functionality and (d) will not contain efficient and
effective business processes. The GAO addressed many challenges in its 2007 Report,
such as those listed above. However, this study addresses two of the issues identified in
the Report, ineffective business processes and capabilities with regard to creating a TAV
capability.
The use of effective business processes in creating a sustained advantage has been
an ongoing discussion in academic literature for some time (Day 1994; Hammer and
Champy, 2001; Sullivan, Kelly, & Olson, 1999). Lockamy and Smith (1997) described
effective business process as those processes that are tied to an organization’s strategy.
For example, Lockamy and Smith suggest that processes must support the “achievement
of a competitive advantage” (p. 149), increase value for the customer, and result in
superior business performance. Hammer (1996) suggested that for an organization to
improve its efficiency and quality, leaders must focus on customer needs and the
“business processes that create value for them” (p. 191). This is because the overall
performance of a firm in its environment depends on the “net effect of the firm’s business
processes” (Ray, Barney, & Muhanna, 2007, p. 24). Nah, Lau, and Kuang (2001)
stipulated that when implementing an ERP, molding legacy business process “to fit the
system” (p. 293) is critical to the success of an ERP, so that when implemented, the
organization’s routines and practices are aligned with the system’s functionality, thus
creating an advantage over competitors. This analysis suggests that business processes
may be one of the keys to developing a viable TAV strategy for the Army.
17. 7
Capabilities have been a point of discussion among researchers since the early
1980’s. Researchers such as Wernerfelt (1984) discussed using the firm’s resources in
creating capabilities that can establish enduring strategic advantages over competitors. A
firm must look internally to assess the strengths and weaknesses that the firm may have,
which forces the firm to look at resources as a way to compete and to build competitive
advantages. Nelson and Winter (1997) suggested that “skills, organization, and
technology” among other resources are often organized in a manner as to create a
capability that cannot be emulated, thereby creating a competitive advantage. They
suggested that using resources in a competitive environment creates a “recipe of
productive capability” (p. 89), because competitors cannot easily break down a capability
into its components and replicate them.
It is generally accepted that capabilities are built using tangible and intangible
resources and that resources in a firm can be defined as anything described as a firm’s
“strength of weakness” (Wernerfelt, 1984, p. 172) and can include both “tangible and
intangible resources” (p. 172). Further, he identified intangible resources as “in-house
knowledge of technology and brand-names” and tangible resources as human capital,
“trade contracts, machinery, and capital” (p. 172). Resources can also include the use of
technology (IT systems, communications networks, etc.), technical and functional
expertise, regulatory guidance, and other resources.
Day (1994) proposed a link between business processes and capabilities. For
example, to create an effective capability, Day advocated that an organization can
combine routines and practices, technology, and know-how, etc. in such a way as to
create a sustaining advantage. Day recommended that to determine the effectiveness of a
18. 8
capability driven strategy, the firm must look at the output of a business process to judge
the success of a capability. Because of Day’s proposed link, this study recognizes that
organizational capabilities are dependent on effective business processes combined with
other organizational resources.
Total asset visibility is a capability that provides leaders with timely and accurate
information on the “status, location, movement, identity of units, personnel, equipment,
and supplies and having the ability to act on that information” (GAO, 2007, p. 2). The
DoD defines TAV differently. In defining TAV, the DoD excludes unit and personnel
identity because such information cannot be contained in an unclassified information
system. Therefore, the DoD (2003) defined TAV as a capability to “provide visibility of
all assets in process, that is, assets being acquired, in maintenance, in storage, or in
transit” (p. 18). This definition focuses on equipment (trucks, weapon systems, sets kits,
and outfits, etc.) assigned to an organization or is in use by the owning organization. This
definition also includes equipment in a maintenance status, or stored in inventory.
However, the Army includes force structure and authorizations in this definition, which
includes units and personnel (Department of the Army, 2007a). Finally, inventory
includes the stocks of equipment and repair parts stored in inventory by all three
components of the U.S. Army as well as those stocks the Army stores in prepositioned
stocks around the world.
The evidence above suggests several variations of the definition of TAV. This
study defines TAV as capability to “provide visibility of all assets in process, that is,
assets being acquired, in maintenance, in storage, or in transit” (Department of Defense,
2003, p. 18). A TAV capability is built using Army resources that are tangible and
19. 9
intangible in nature, such as logistics and maintenance expertise, established logistics
policies and procedures, the use of technology, human capital, communications networks,
and refined business processes embedded in an enterprise resource planning system. This
study seeks to use the Army as an example of the same issues seen in other industries in
creating a strategic capability.
Background of the Study
To improve its logistics capabilities, the Army is implementing three enterprise
resource planning (ERP) systems; GCSS-Army, the Logistics Modernization Program
(LMP), and the General Fund Enterprise Business System (GFEBS). These systems focus
on different parts of the Army’s logistics pipeline, but together, they significantly
transform the way the Army conducts logistics sustainment operations, which the
Government Accounting Office (2007) called the “factory to foxhole” (p. 9) logistics
chain of the Army. For instance, the focus of LMP is on the wholesale portion of the
Army’s logistics chain. It connects the Army to the National Economy and its
manufacturing capacity. GCSS-Army is the retail, or tactical portion, of the Army’s
logistics system. The tactical system is much like a retail store, like Wal-Mart or Advance
Auto Parts, because logisticians can go direct to these organizations to receive equipment
and repair parts as a source of supply. Retail supply organizations are found around the
world in the many sustainment organizations that provide organic logistics capabilities to
the warfighter; the number of retail supply support activities (SSAs) approaches 300. The
services an SSA provide combat organizations are supply, resupply, and retrograde
logistics (the removal of unserviceable assets from the battlefield). The final component
20. 10
is GFEBS, which provides the “financial visibility” (Government Accounting Office,
2007, p. 9) of the Army’s $140 billion in assets.
After its one year investigation, the GAO (2007) suggested that even with
implementing these ERPs, the Army is only achieving “incremental improvements” (p.
21) in its TAV capabilities. According to the Agency, this is because the Army is not
taking full advantage of, and adopting, enterprise processes. Further, the Agency reported
the processes implemented in the ERPs are a copy of those found in many of the “16
stovepiped legacy systems” (p. 11) and are “cumbersome and ineffective” (p. 6). Finally,
the Agency advocated the “Army will diminish its ability to achieve TAV and improve
accountability over its assets” (p. 22). The Program Manager (PM) implementing the
ERP disagrees. In the overview of the program, the PM’s website stipulates that GCSS-
Army will provide the Army with “improved visibility” (PM GCSS-Army, 2013).
Statement of the Problem
Total Asset Visibility has received much attention in recent years by many
defense organizations. For example, the United States Armed Forces and Canadian
Armed Forces are researching TAV capabilities as a way to improve logistics
responsiveness and reduce logistics costs (Miksa & Carlson, 2007). The United States
Armed Forces are transforming their logistics capabilities because of fiscal constraints
and the need to rapidly deploy forces to hot spots around the world. To enable rapid
deployment, a Military organization must have the ability to sustain its forces with a
reduced logistics footprint. For rapid deployments to be successful, commanders must
have timely and accurate information of the supply chain so that timely and accurate
21. 11
deployment decisions can be made. Accurate and timely logistics information increases
leadership’s confidence that the logistics chain will provide the necessary assets to enable
victory on the battlefield when and where needed. The PM suggests the GCSS-Army
ERP will provide universal asset visibility, although the GAO report would suggest
otherwise.
Because of the multiple components associated with TAV, this study examined
the effectiveness of logistics and maintenance business processes in delivering a
component of TAV, that is, visibility over the organization’s maintenance processes and
the assets affected by them. To examine this phenomenon, this study investigated the
relationship between the information effect of effective maintenance management
business processes and the capability of visibility of assets in maintenance. In this study,
business processes, defined in the view of the user population, are effective when a user
completes a logistics or maintenance management business process and the output is
correct allowing the user to perform his or her job, which in this study is considered to be
the information effect of the maintenance business processes.
To investigate this phenomenon, this study used a database generated from
computer-assisted self-reporting task performance and survey data taken by the U.S.
Army Test and Evaluation Command (ATEC) to measure the suitability, effectiveness,
and sustainability of GCSS-Army in an operational environment. The data were captured
during an initial operational test and evaluation (IOT&E) event from September 1, 2011
to October 20, 2012. To assist ATEC in gathering data during the IOT&E, the Army
provided an independent third party data collection agency, the Operational Test
Command (OTC), which employed data collection observer/controllers to assist users in
22. 12
completing task performance forms that recorded tasks performed during the IOT&E
event (Army Test and Evaluation Command, 2011).
Purpose of the Study
How does the resource based view of the firm explain the relationship between
visibility of assets in maintenance (dependent variable) and the information effective of
maintenance business processes (independent variables)? The statistical model used to
test the hypothesis is correlation and regression analysis using a purposefully selected
sample of ERP logistics users taken from a statistical database. Specifically, this
quantitative study analyzed the relationship of the information effect of specific mission
critical functions (MCFs), critical mission functions (CMFs), and the Army’s strategic
objective of TAV to investigate the GAO’s claim that the Army’s TAV capabilities have
been diminished with the implementation of GCSS-Army. This study utilized a statistical
database of survey and task performance data taken from an operational test event
conducted by the United States Army Test and Evaluation Command (ATEC) from one
of two GCSS-Army ERP implementations. The first implementation was completed in
September 2010 and the second implementation was completed in October 2011. The
goal of this study is to determine whether effective business processes developed within
the ERP have diminished the Army’s visibility over its assets in the maintenance process
by using a critical factor matrix, Mission Critical Function (MCF)/Critical Mission
Function (CMF) Matrix, developed by the researcher and used by ATEC in the
evaluation of GCSS-Army during the operational test event.
23. 13
In this study, a MCF is generally defined as a high-level logistics capability an
Army organization needs to be successful on the battlefield. The capability reflects a
process that is system agnostic, meaning the processes can be performed manually or by
information systems (IS) developed with no specific vendor in mind. A CMF is generally
defined as a high-level business process, such as work order management, configuration
management, issuing supplies, or conducting an inspection or inventory. Each CMF is
supported by one or many subprocesses, or more generally, the process steps required in
completing a business process. Information effect is generally defined as the information
produced by the subprocesses within each CMF, such as an output used as input to new
processes or the output used to produce maintenance reports.
Rationale
The rationale for selecting these concepts came from a literature search on ERP
success and critical success factors (CSF), which are used to determine the success of
ERP systems in meeting the goals and objectives of the implementing organization. This
researcher developed a critical factor MCF and CMF methodology to help ATEC
quantify the success of the enterprise logistics system in mission based test and
evaluation (MBT&E) activities. This methodology is significant because GCSS-Army is
the first ERP to undergo MBT&E using a critical factor approach and the first to receive
a positive review from the Secretary of Defense’s Director, Operational Test &
Evaluation (DOT&E). The MCF and CMF methodology used for this study makes a
significant contribution to ERP literature because the IOT&E event was the first
successful operational evaluation of an ERP in the Army. Accordingly, it is postulated
24. 14
the MCF and CMF methodology would provide a link between business processes and
strategic capabilities as defined by an organization’s strategic objectives. Overall, the
model contains 5 MCFs with 20 CMFs (see Appendix A for the complete model) with
194 subprocesses identified to measure the system’s success at meeting the operational
needs (capabilities) for logistics management in the Army. This research project used a
statistical database containing survey and task performance data collected by ATEC to
investigate whether a specific capability, such as TAV, has been diminished.
Research Questions
Focusing on the information effect of the maintenance management business
processes developed in the ERP at the tactical and operational level of strategy, this
research study seeks to determine whether GCSS-Army “will diminish the Army’s
capability to achieve TAV and improve accountability over its assets” (GAO, 2007, p.
22). This leads to the following research questions:
Research question #1: Is there a correlation between the information effect of
maintenance management business processes and the visibility of assets in maintenance
at the tactical level?
Research question #2: Is there a correlation between the information effect of
maintenance management business processes and the visibility of assets in maintenance
at the operational level?
H1o: An increase in the effectiveness of a TAV capability (dependent variable) at
the tactical level is not related to the information effect (independent variable) of
25. 15
correctly developed maintenance management critical mission functions (CMFs)
(independent variable) developed in the solution.
H1a: An increase in the effectiveness of a TAV capability (dependent variable) at
the tactical level is related to the information effect (independent variable) of correctly
developed maintenance management critical mission functions (CMFs) (independent
variable) developed in the solution.
H2o: An increase in the effectiveness of a TAV capability (dependent variable) at
the operational level is not related to the information effect (independent variable) of
correctly developed maintenance management critical mission functions (CMFs)
developed in the solution.
H2a: an increase in the effectiveness of a TAV capability (dependent variable) at
the operational level is related to the information effect (independent variable) of
correctly developed maintenance management critical mission functions (CMFs)
developed in the solution.
Significance of the Study
Finney and Corbett (2007) conducted a study on critical success factors (CSFs) of
ERPs and revealed 23 CSFs that could potentially increase the success of an ERP
implementation, however, the study focused on the stakeholder’s perspective. One
significant finding from this study was that most research on CSFs used “secondary
sources” (p. 340), such as literature reviews. Al-Mashari (2003) identified this as a
problem too when he suggested that more empirical studies are needed on ERP
implementations and that the gap in this area of research is “huge” (p. 22). Further, he
26. 16
investigated the literature gap and developed a taxonomy identifying 24 areas where
research on ERP is lacking. He suggested that a critical factor approach to investigating
ERP implementation “would be interesting” (p. 22). This study closes this gap by using a
critical factor approach to investigate the strategic implications of using an ERP in a
public sector organization, which are three areas in Al-Mashari’s taxonomy.
Esteves (2007) reviewed over 600 ERP journal articles and conference
proceedings. Esteves developed an extensive bibliography of articles related to eight
categories of enterprise systems topic areas, such as “general, ERP adoption, ERP
acquisition, ERP implementation” (p. 390). Further, Finney and Corbett (2007) suggested
critical success factor research has concentrated on a specific aspect of an ERP
implementation or a particular critical success factor. The researchers also suggest that
this research in this area has failed to encompass all significant critical success factor
considerations. One finding is that none of the articles took the approach of measuring
ERP success from a critical mission function perspective or using the resource based
view (RBV) using a capabilities perspective. Johansson and Helstrom (2007) also add
that academic research on asset visibility is “scarce” (p 801). This research study adds to
this academic knowledge base by using a statistical database containing primary data
taken from an ERP implementation to study the relationship between the effectiveness of
the Army’s strategic capability of asset visibility and business processes using a critical
factor approach.
27. 17
Definition of Terms
SAP security audit log is a log that lists the transactions that a user completed in
the ERP. Each transaction completed in the system is identified by a unique user
identification code, the SAP transaction code, time and date the transaction was
completed, and whether the transaction was successful.
Business process is a mixture of resources that a firm combines in an efforts to
accomplish its business objectives (Ray, Barney, & Muhanna, 2004).
Capability is the capacity of an organization to execute its activities in a
predictive, efficient, and a repetitive manner (Smith, 2008).
Critical Mission Function (CMF) is a high-level business process that must be
completed successfully for an organization to create an effective business capability.
Dependent (outcome) variable is a variable that depends on the independent
variable’s manipulation to provide the outcome or results of the study (Creswell, 2009).
Doctrine defines how the Army operates; it facilitates communication among all
personnel by providing a common language and understanding of how the Army
conducts operations.
Enterprise resource planning (ERP) is a system that is multi-dimensional in
nature and is based on predefined business models as designed by the manufacturer.
These systems assist firms in planning, control, and resource optimization (Jarrar, Al-
Mudimigh, & Zairi, 2002).
Field Manuals are manuals that instruct Soldiers “on all aspects of Army life”
(Whitehouse.gov, n.d, para. 1).
29. 19
Military Occupational Specialty (MOS) is the specialty that a member of the
military holds. This translates to a specific combat or business function, such as a supply
clerk or warehouse clerk. For example, a 92A is an Automated Logistical Specialist, who
operates a maintenance information system. This MOS performs maintenance
management related tasks in a maintenance activity or maintenance section within an
organization. The civilian counterpart would be a parts or service representative in an
auto dealership.
Mission based test and evaluation (MBT&E) is a test method that focuses test and
evaluation (T&E) activities on the capabilities developed and provided to the warfighter.
It provides a framework and procedures to link the materiel system attributes to the
operational capabilities of the system implemented to mission based scenarios and
requirements (Department of the Army, 2010).
Mission Critical Function is a business capability that an organization must
accomplish successfully to perform its business strategy. A combination of mission
critical functions can be used to create a specific capability.
Operational strategy is a level of strategy designed and employed at the brigade
and below. Operational strategy provides brigade sized elements and below with
direction, and the command and control necessary to conduct combat operations and win
on the battlefield in a regional area.
Reliability is the degree to which a measure is consistent with what it is supposed
to measure (Swanson & Holton, 2005).
31. 21
Seddon, Calvert, and Yang (2010) defined fit as the match between the organization’s
needs and the internal configuration of the enterprise system. They suggested the “greater
the fit the more effective and efficient the organization’s processes will be” (p. 312).
Morton and Hu (2008) suggested in order to implement an ERP, a firm will have to
reengineer its business processes to fit the internal processes of the enterprise system,
which required requires the organization to move from a “functional based organization
structure” to a “process-oriented structure” (p. 391). According to these researchers, the
fit between the organization and the design of the system is critical to the success of an
information system. This fit is important because commercial off the shelf software
products are not typically aligned to the firm’s structures or processes, which will require
significant organizational changes to adapt to an ERP. Also, since ERPs have different
configurations and are known by different names, such as MRP, and “supply chain
management (SCM)” (Tsai, Chen, Hwang, & Hsu, 2010, p. 26) this study focuses on the
configuration and implementation rather than the name of the ERP solution.
The business processes developed in the ERP are effective. The Army conducted
a test to measure the effectiveness, suitability, and survivability of the ERP in an
operational (tactical) environment. Twenty critical mission functions (business processes)
were evaluated during this event with approximately 300 participants, who completed
task performance forms containing quantitative and qualitative data to measure the
effectiveness of each business process. The outcome of the test event suggested that all
20 business processes were effective.
Since this study used a database containing statistical data taken from a unique
operational test event, the assumption is that this database is valid and accurate. This
32. 22
assumption is supported by the fact that a Data Authentication Group (DAG) employed
by ATEC authenticated each data element as valid before the data elements were entered
into the database. Further, it was assumed that the database had not been sufficiently
analyzed to answer the research questions proposed in this study, because the database
was used in the IOT&E to access the system’s effectiveness, survivability, and
sustainability in performing logistics on the battlefield. A secondary analysis of the
dataset is necessary, performed at the level of the business process, to determine if
business processes can contribute to a firm’s strategic capabilities, such as TAV. Finally,
Hakim (1983) suggested that this methodology would be a good fit for the analysis of
administrative data by “applying a somewhat different perspective” (p. 503) to the topic
at hand, which is to achieve a different outcome.
Limitations
This study was designed to use a database of existing primary observational data
taken from an operational test event. Using this database may impose a limitation due to
the age of the database. However, since the business processes under investigation are
sufficiently complex and no changes or enhancements have been introduced to the
business processes since the test event, it is assumed that the age of the database would
not affect the findings or the study’s outcome. Also, system logs could be used to
evaluate inflated process counts identified in the database, which could be considered by
some to be subjective and introduce bias, and this fact is identified as a limitation in this
study. However, Hakim (1983) recognized this possibility and suggests that having
knowledge of this bias does not “invalidate the data” (p. 509). Having this knowledge
provides “justification for a somewhat different interpretation of the findings” (p. 509).
33. 23
This study also used the original instruments used in the operational test event to
serve as a point of departure to identify the data elements contained in the database to be
included in the study. The original instruments contained in the database includes a Task
Performance Form used to record MCF and CMF transactions completed by the users
and verified by data collection/observers from the Operational Test Command (OTC).
This documentation also includes an End of Record Test Survey instrument that was
developed by ATEC with some participation from this researcher and a committee of
logistics management specialists. These instruments were administered to the participants
by OTC and ATEC without participation from this researcher. The validity and reliability
of the instruments used by ATEC and OTC to collect data during the IOT&E event
cannot be determined, and therefore constitute a limitation of this study.
A final limitation is whether the data recorded in the database were designed by
ATEC to fit some research methodology. It could be assumed that since the data
collection was based on the mission critical function and critical mission function
methodology, some form of methodology was associated with the data collection, and
recording activities and would not impose any limitations to this study’s outcome. Hakim
(1983) suggested that the connection of a “post hoc” (p. 505) methodology still allows
the researcher to draw conclusions from the dataset under analysis.
Conceptual Framework
This study employed an extract of a conceptual framework designed by the
researcher to guide ATEC in quantifying the operational effectiveness, operational
suitability, and operational survivability of the ERP during the operational event (see
34. 24
Appendix A for the complete framework). The conceptual framework developed for the
test event links business processes within an information system (IS) being developed to
specific capabilities within an organization’s enterprise architecture (EA) that defines a
high-level strategic objective. In this case, the Army is trying to improve a high-level
strategic capability to provide operational level commanders and decision makers with
visibility of assets owned by an organization in the logistics pipeline.
To achieve this capability, the ERP being developed must include business
processes that contribute successfully to a business capability. The conceptual framework
presented in this study identifies the business process areas as critical mission functions
(CMFs). These are the business processes that must be successfully executed for the
Army to achieve minimum effectiveness in five specific business areas, which are
maintenance, retail supply, finance, logistics management, and property book and unit
supply. Each business capability must be executed successfully for the Army to achieve
its strategy of logistics management. These five business capabilities are identified in the
complete conceptual framework (see Appendix A for the complete framework) as
mission critical functions (MCF).
In this study, TAV is concerned with the visibility of assets in maintenance,
which is in line with the DoD’s definition of TAV. One mission critical function
(capability) that contributes to the effectiveness of visibility of assets in maintenance is
maintenance management. The mission critical function of maintenance management
contains six critical mission functions (business processes), which are (a) update
equipment record (b) manage platform configuration (c) manage work orders (d) manage
35. 25
scheduled maintenance (e) manage configuration and maintenance and (f) manage
maintenance supply transactions.
For visibility of assets in maintenance to be effective and contribute to the Army’s
strategic objective of TAV, each critical mission function must work as designed and
provide the information required for organizational users to make informed decisions
about maintenance capacity and equipment readiness. This is the information effect of the
business processes, which means that each of the process steps in a critical mission
function must provide the ERP user with the accurate, timely, and usable output desired.
If each process step in a critical mission function is working as designed, the critical
mission function would add to a capability. For example, if the critical mission function
of work order management is working as designed, the informational output from the
process can be used in accomplishing specific strategic goals.
In this study, visibility of assets in maintenance is a strategic capability that
allows management to support combat operations by assessing and predicting equipment
readiness based on current equipment configuration and maintenance status (equipment
in maintenance) and future maintenance needs (scheduled maintenance). For example, if
all process steps within the critical mission functions of work order management and
manage scheduled maintenance are working as designed, management at higher levels of
the Army hierarchy can use the information produced by these business processes to
determine current maintenance requirements across the organization’s maintenance
facilities, current maintenance status, and plan for future preventative maintenance such
as when an equipment item is due for a service. This visibility facilitates maintenance
capacity and load planning to ensure equipment readiness rates meet mission
36. 26
requirements. Figure 2 provides a partial mapping of the mission critical function (MCF)
and critical mission function (CMF) matrix, which serves as the conceptual framework
for this study.
Figure 2. Conceptual framework describing an ERP with several business modules
with a proposed relationship between information effect of CMFs and visibility of
maintenance.
Organization of the Remainder of the Study
Chapter 2 provides a review of the scholarly knowledge base on total asset
visibility, Army maintenance and logistics processes, enterprise resource planning
systems, process management, critical success factors, and the resource based view of the
firm.
Chapter 3 discusses the quantitative methodology chosen for this study. This
chapter also presents statistical analysis procedures that were used to investigate the
37. 27
relationship between the effectiveness of total asset visibility and the processes the ERP
uses to contribute to the capability.
Chapter 4 provides a detailed discussion of the analysis procedures, significant
including statistical results with all necessary charts and graphs.
Chapter 5 discusses the results, implications, and areas for future research.
38. 28
CHAPTER 2. LITERATURE REVIEW
Government agencies are implementing enterprise resource planning (ERP)
platforms as a way to improve cost effectiveness and develop improved capabilities. The
Army is just one example of a Government agency that is transforming its logistics
business processes using an ERP to reduce costs to build improved warfighting support
capabilities, such as total asset visibility. To investigate this phenomenon, this study
presents an exhaustive literature review that crosses many bodies of knowledge. Figure 3
presents a graphical representation of the topics found in this literature review. Four main
knowledge areas were investigated. These topics include total asset visibility, enterprise
resource planning systems, critical success factors, and the resource based view of the
firm. Figure 3 also provides an indication of the supporting topic areas that are discussed
in this literature review, which includes topics such as ERP integration and process
management.
39. 29
Figure 3. Literature Review Map
Total Asset Visibility (TAV)
Total asset visibility (TAV) is an important concept for an agile and mobile
military force. This is especially true in the post-cold war era where conflict is
characterized by small hot spots scattered around the world requiring swift military
action. Swift action requires military logisticians to develop innovative methods to move
personnel and equipment rapidly to these hot spots. Simon (2001) suggested that moving
an agile force requires a military to develop and implement just-in-time supply chain
processes, which is postulated to generate a significant advantage over adversaries. Such
a system will require a military force to develop and implement a capability that provides
40. 30
an organization a common view of its assets in the logistics pipeline. Such a capability is
not limited to military organizations; corporate organizations have a need for TAV as
well.
Corporate organizations also find TAV to be an important capability. For
instance, Johansson and Helstrom (2007) suggested that in corporate organizations, TAV
can be more important than having visibility over its products (p. 801). Currie, Heminger,
Pohlen, and Vaughan (1996) defined the commercial version of TAV as “total supply
chain visibility” (p. 23), which provides organizations visibility of assets in the logistics
pipeline from the distribution center to the point of sale.
Simon (2001) defined TAV as a capability allowing military leaders to assess
operational and logistics situations on the battlefield. This includes (a) the “operational
readiness of material and equipment” (b) the ability to “rapidly acquire, pack, and ship
supplies and equipment to maintain supply levels” (c) the ability to “predict equipment
failures using forecasting and simulation” (p. 64) and (d) the ability to monitor and
enhance the movement of unserviceable material and equipment from the battlefield to
repair facilities. Such a capability is critical to ensure that combat forces have the
equipment and material necessary to conduct combat operations decisively. Not knowing
where material and equipment are in the logistics pipeline could lead to poor decisions
that could alter the outcome of a campaign.
Joint Warfare Center (2000) suggested that visibility systems are capability
enablers. These enablers increase combat effectiveness by providing leaders accurate and
timely information to increase battlefield effectiveness. For example, TAV is an
important component of distribution operations because it provides a means to increase
41. 31
the responsiveness of the Army logistics systems to meet the customer’s needs through
the use of timely and accurate supply chain information. This component increases
combat effectiveness by providing leaders a common view of the overall distribution
enterprise from source of supply to the user on the battlefield. However, the lens through
which the Joint Warfare Center defined TAV is the transportation community’s view of
visibility. This view considers assets that are in the transportation pipeline. This includes
port to port visibility, where a unit’s assets and cargo conveyed from one point on the
globe to another.
In principle, the differing definitions above align to the same goal, which is to
provide the information necessary to provide logistics support to the combat commander.
This support enables logistics organizations to help sustain combat power through
increased control and reliability of the logistics pipeline. It is postulated that a TAV
capability will increase Army leadership’s confidence in the logistics system. Confidence
can be increased by providing near-real time information about the material and
equipment in the logistics pipeline that is usable and accurate (Currie, Heminger, Pohlen,
& Vaughan, 1996; Simon, 2001).
Significant limitations in the past have limited the Army’s ability to create a TAV
capability. One of the limitations is the LIS currently used to automate the Army’s
logistics processes. Simon (2001) provided a detailed discussion of high-level limitations
at the DoD level. However, Simon suggested the Army has found it difficult to develop a
TAV capability in part because of the use of outdated information systems that are
incompatible with internal and external agencies, and contain redundant data and
antiquated logistics processes. The use of “stovepiped systems” significantly limits
42. 32
Army’s visibility of the logistics pipeline; this limits the Army’s ability to conduct “rapid
replanning and redirection” (p. 64) of material and equipment required to support the
responsiveness needed by combat forces. Simon’s view of the limitations in developing a
TAV capability aligns with the GAOs (2007) findings.
Also, antiquated logistics processes that have not maintained pace with current
technology advances is another limitation, which prevents the creation of a TAV
capability. For instance, the Army’s concept for TAV is stated in Army Regulation (AR)
710-2 (2008). This regulation defines the Army’s supply policy at the operational level.
According to the Regulation, the capability for visibility of assets resides in the
“Logistics Integrated Database” (p. 98) (LIDB) maintained by the Army Material
Command’s (AMC) Logistics Support Agency (LOGSA). However, it can be postulated
that the capability provided by the LIDB is limited because it does not provide real time
logistics data. This is because LIS systems send daily, weekly, and monthly data to
LOGSA, who then uploads and stores the data in the LIDB. This sporadic uploading of
data cannot provide a real-time view of logistics data; it is accurate only as to the last
update received from LIS.
Rhodes (2004) suggested that systems such as the LIDB provide a limited TAV
capability because of the lack of integration among the legacy systems. This issue is
compounded by the many organizations that have developed homegrown information
systems that retrieve, upload, and manipulate logistics and financial data from databases
such as the LIDB to create a TAV capability with logistics and finance data that are often
outdated. He provided an example of the “Financial and Logistical Interface Program
(FINLOG)” (p. 7) that Forces Command built to compensate for the Army’s inability to
43. 33
furnish the data necessary to supply up-to-date logistics and financial data. Additionally,
this tool combines logistics data with financial data from financial systems of record with
supply data from LIS and LOGSA. It is important to note that current Army legacy LIS
contain no financial data. They contain only logistics transactional data that have to be
reconciled with standalone financial systems such as the Standard Army Financial
Information System (STANFINS), which is being replaced by GFEBS. Even with the
replacement of STANFINS, LIS transactional data will still require reconciliation with
GFEBS, which is time consuming and often creates data errors. When fully implemented,
GCSS-Army will provide journal-level financial data to GFEBS on a daily basis through
interfaces, which eliminates the need to reconcile transactional level data with financial
systems of record.
Also, AR 710-2 (2008) suggested the use of TAV and automatic identification
technology will increase the effectiveness of the Army’s redistribution processes.
Redistribution processes facilitate the “redistribution of assets in inventory during an
emergency situation” (p. 98) to units in critical need of material and equipment. For
example, if an organization is taking on considerable battle losses, the Army can redirect
material and equipment that is due in to other organizations to the organization taking
losses to maintain the organization’s combat effectiveness.
The TAV capability as described above includes several components. These
components include (a) visibility of material and equipment maintained in operational
inventories (b) visibility of material and equipment in the logistics pipeline, and (c)
visibility of assets (material and equipment) in repair. Investigating supplies in
operational inventory and in the logistics pipeline is outside the scope of this study.
44. 34
However, because the TAV capability is composed of several parts, a basic discussion of
visibility of supplies in operational inventories and in the logistics pipeline appears here
to facilitate a basic understanding of the complete capability.
Visibility of Operational Inventories
The Army suggests the visibility of assets in operational inventories includes
material and equipment in inventory, moving in a warehouse, and moving throughout an
organization. Included are the quantities of material on-hand, due-in, and due-out to
customers. This also includes visibility of when a material condition code or ownership
or purpose code for a material has changed or when the stockage code or requesting
objective is changed. When movement of property assets (tools, trucks, tent, diagnostic
equipment, etc.) are involved, visibility over these assets provide leaders with
notifications when equipment arrives at the retail supply activity and when an issue or
receipt transaction occurs. Otherwise, Property Accountable Officers prepare and submit
a manual report to the LOGSA for input into the LIDB to update asset records
(Department of the Army, 2008).
The Army’s TAV capability as currently designed provides logistics managers
with visibility of excess material, which affords Item Managers nationally a capability to
redistribute the excess material according to operational needs. Finally, it is suggested
that this capability is still in development. For example, “it is envisioned that as the
TAV/LIDB is fully developed and implemented that it would create the data required to
fulfill this objective” (Department of the Army, 2008, p. 102).
45. 35
Visibility of Supplies in the Pipeline
Visibility of supplies in the pipeline is provided by what Estevez (2005) described
as “radio frequency identification (RFID)” (p. 24). The use of RFID promises to increase
the visibility of the material stored in warehouses, and of its movements internal to the
warehouse, and increase the accuracy of inventories. It also promises to provide areas for
increased productivity as well as methods of integrating information into end-to-end
processes. As hinted to in this study, the information provided by the RFID capability is
integrated into an enterprise system, which complements the TAV capability and
facilitates further enhancements to the transformation of the Army’s logistics processes.
Finally, RFID is not contained within current LIS, third party servers gather and store
RFID data, which is fed to the LIDB and other LIS, providing a limited, albeit functional,
in-transit visibility (ITV) to support decision making.
Visibility of Assets in Maintenance
The last component of TAV, and the focus of this study, is the visibility of assets
in the maintenance process. The LIDB contains a “maintenance module” (Department of
the Army, 2010-2011, p. 94), which provides maintenance managers historical equipment
maintenance data generated by maintenance organizations. The historical data contained
in the module are generated from equipment maintenance work orders sent to LOGSA by
the Army’s standard Army management information systems (STAMIS) from different
levels of the organizational hierarchy. These LIS provide maintenance managers with
data to measure performance at different levels of the maintenance hierarchy. This
includes “mean-time-to-repair, repair parts consumption, and reasons for maintenance
46. 36
action” (p. 94), etc. However, this data does not provide visibility of equipment status in
repair. Much like the other visibility components discussed so far, these LIS provide
maintenance data to the LIDB for historical research and other purposes required by
higher level Department of the Army organizational needs. Finally, to establish a
foundation for the research on the capability of TAV and using this capability to establish
a competitive advantage, Table 2 provides a list of variables that are relevant to this
study.
Table 2. Variables Relevant to This Study
Variable Description Variable Type Prior Research
Visibility of assets in
maintenance (VISMNT)
Dependent Department of the Army, 2007b, 2008, 2010-2011;
Estevez, 2005; Johansson & Helstrom, 2007;
Rhodes, 2004; Simon, 2001
Information Effect
(INFEFF)
Independent Crow, 2002; Department of the Army, 2005, 2008;
Gattiker & Goodhue, 2000; Karim, Somers, &
Bhattacherjee, 2007; Ng, Ip, & Lee, 1999; PM LIS,
2005; Pettit & Beresford, 2009; Trkman, 2010;
Uemura, Oiki, Oka, & Nishioka, 2006
Army Maintenance and Logistics Processes
The Army has four core maintenance processes, which are (a) “performance
observation (b) equipment services (c) fault repair and (d) a single-standard repair
(Department of the Army, 2011, p. 1-2). Every organization in the Army that owns and
operates equipment follows these four maintenance processes. All maintenance
information generated by these maintenance processes is recorded and stored in LIS in
each organization (see Figure 1). The first three processes are of particular interest to this
study, because it is postulated that efficiencies created in these processes through process
improvements can increase the effectiveness of visibility of assets in maintenance. These
47. 37
processes allow management at all levels to manage the Army Maintenance Management
System (TAMMS) to ensure equipment readiness is maintained to meet Army standards.
In general, these core processes allow maintenance managers and logisticians to plan,
prioritize, conduct, and record maintenance transactions.
Performance Observation Process
The purpose of the performance observation process is the “foundation”
(Department of the Army, 2011, p. 1-2) of the Army’s maintenance program. This
process is mostly a manual process, but is supported by information systems, diagnostic
equipment, and in the future, on-board sensors to record equipment faults and
deficiencies. For example, every equipment item must be inspected by the operator
before, during, and after the equipment is operated. This is known as the “preventive
maintenance checks and services (PMCS)” (p. 1-2). All PMCS operations are recorded
on the maintenance and inspection worksheet or Department of the Army (DA) Form
5988-E. When no fault exists, the operator annotates the date the inspection was
completed on the form, where it is maintained in the equipment file with the vehicle
while in operation. When the vehicle is returned, the operator annotates the equipment
record with usage information, fuel and oil added, and the form is returned to the LIS
operator, who enters the data into the SAMS-1E system. Finally, when a fault is noted
during operation, the operator annotates the fault on the equipment’s maintenance
inspection worksheet. Upon returning to the organization, the worksheet is returned to the
LIS operator, who records the fault on the equipment record in the LIS (Department of
the Army, 2006).
48. 38
Fault Repair Process
The fault repair process is used to restore equipment to original specifications,
including any deficiency that would prevent equipment from performing as designed, and
includes any attached components, radio and communications equipment, and weapons.
Fault repair can be performed by the equipment operator or crew, the organization’s
maintenance personnel, or support maintenance personnel. For example, if an operator
found a broken light bulb during a preoperative inspection, the operator would request a
light bulb from the organization’s SAMS-1E operator, and then install the light bulb. If
the light bulb did not correct the fault, the operator notes the fault on the equipment’s DA
Form 5988-E. The operator then presents the form to the SAMS-1E operator, who
presents the form to the maintenance supervisor for assessment. The maintenance
supervisor presents the form to a maintenance technician to verify the fault. Once
verified, the maintenance form is returned to the maintenance supervisor, who directs the
SAMS-1E operator to record a fault on the equipment’s equipment record in the LIS,
which then generates a work order to correct the fault (Department of the Army, 2006).
Equipment Service Process
The purpose of the equipment service process is to maintain and extend the
operational life of material and equipment and to “increase equipment readiness”
(Department of the Army, 2007, p. 14). Services are maintenance actions performed on
equipment at some predetermined interval. Intervals range from operation time in miles
and hours to specific intervals such as daily, weekly, monthly, quarterly, or other
predetermined intervals as defined by the original equipment manufacturer (OEM). The
LIS captures and stores all service related data for future analysis until purged. Based on
49. 39
the service requirements, services are conducted locally. For example, most equipment
services are conducted in the maintenance facility of the owning organization. Once a
service is completed, the LIS operator annotates the completed service on the equipment
record in the SAMS-1E. Next, the LIS operator updates the equipment record in SAMS-
1E with the next service due. Also, the DA Form 5988-E contains a list of all service
related information, which is updated regularly following regulatory guidance
(Department of the Army, 2006).
Single-Standard Repair
The single-standard repair is not a process but the policies and procedures
followed by all maintenance personnel. Every equipment item has a technical manual
(TM) developed by the OEM and adapted to fit the single-standard repair process for the
Army. For example, each TM lists the before, during, and after inspection items that all
operators must visually inspect while utilizing equipment. The TM also lists the
maintenance allocation chart (MAC) that describes the levels of maintenance required to
correct a fault. The TM also provides a list of procedures and tools needed to correct a
fault at the different levels of maintenance. For example, if an alternator was found to be
broken, the TM would describe the procedures to remove and replace the defective
alternator, and the level of repair. To support the single-standard repair process, the Army
established four different levels of technical manuals. For example, equipment operators
use the -10, or operators manual to perform operator level maintenance. Organizational
level maintenance activities use the -20 manual for component replacement (on-platform
repair). Support and depot level organizations follow the -30 and -40 level manuals for
component repair (off-platform repair) (Department of the Army, 2006).
50. 40
Finally, the four core maintenance processes assist maintenance personnel in
managing the Army’s maintenance program. These processes, initially manual, were
automated over the past 20 years in the LIS to streamline maintenance processes to create
efficiencies in managing maintenance. However, these processes do not provide visibility
of asset in maintenance to support decision making. To enable visibility of assets in
maintenance activities, seven supporting processes performed in an ERP are postulated to
increase the visibility over these core maintenance processes.
Supporting Logistics Business Processes
To support decision making and provide visibility over the core maintenance
processes, legacy LIS allowed users to record daily logistics transactions in individual
disconnected information systems through automated business processes. At
predetermined time intervals, these transactions are rolled up and sent to the next
organizational maintenance echelon, where an LIS compiles and sends the data to the
LIDB at LOGSA for retrieval, analysis, and decision making.
GCSS-Army dramatically improves legacy LIS supporting business processes
through business process reengineering (BPR). In GCSS-Army, the logistics and
maintenance management module provides six supporting maintenance business
processes, which enhance the Army’s maintenance and logistics business capabilities.
These business capabilities are identified in this study as being a mission critical function
(MCF). A combination of mission critical functions can be used to create a specific
capability. For example, by combining MCFs of retail supply, property book/unit supply,
maintenance, and logistics management, the Army has created a logistics capability
51. 41
within an ERP that enables its combat service support function on the battlefield. Table 3
lists the business processes implemented in GCSS-Army that support the four core
maintenance processes.
Update Equipment Record Process
Legacy LIS contains an equipment record for every equipment item owned by a
unit. LOGSA’s material master data file (MMDF) provides the equipment record to LIS.
Once data is input into the LIS, the LIS operator builds an equipment record on each
equipment item authorized for and maintained by an organization. The equipment record
contains the details on the equipment such as any warranty, the equipment registration
number, serial number, current usage reading, equipment category code, and equipment
readiness code. The equipment record also identifies the equipment’s assigned operator
and his or her supervisor, and facilitates readiness reporting. For example, if an
equipment item or component on an equipment item is not available for administrative
Table 3. Business Processes that Support the Four Core Maintenance Processes
Maintenance MCF Process Description
Update equipment record process Allows a user to update equipment records.
Manage platform configuration process Allows a user to update equipment configuration.
Work order management process Allows a user to create, update, and close
maintenance work orders.
Manage scheduled maintenance process Allows a user to manage equipment scheduled
maintenance activities.
Configuration & maintenance management process Allows a user to maintain the equipment’s master
data.
Maintenance supply process Allows a user to order repair parts to correct faults.
Note: MCF = mission critical function
52. 42
purposes or is inoperative, SAMS-1E assigns the equipment a status. Equipment status
ratings include fully mission capable, partially mission capable, or non-mission capable.
This process allows a user to update the status of equipment when its status changes.
Creating an equipment record manually in each LIS for each equipment item introduces
data inconsistencies propagated in each LIS as data files are transferred (Department of
the Army, 2005).
GCSS-Army is subsuming the MMDF and will become the authoritative data
source (ADS) for all equipment records. Additionally, since the ERP is integrated, data
conversion activities will ensure equipment record master data, such as serial number,
model number, and other master data inconsistencies are investigated and resolved, and
an enterprise equipment record is created in GCSS-Army, which is aligned to an asset
number obtained from GFEBS. This provides an initialized data set for the equipment
record. Since GCSS-Army will become the ADS for equipment master data, this process
is expected to provide the user with more reliable data and timelier status updates. In fact,
Uemura, Oiki, Oka, and Nishioka (2006) provided evidence that standardized equipment
records contained in an ERP contribute to standardization, improved efficiencies, and
timelier equipment status updates. According to the researchers, standardized equipment
records provide an organization with improved visibility of equipment status throughout
an organization in near real-time. It is proposed that the enhancements made to this
process increase the effectiveness of visibility of assets in maintenance.
53. 43
Manage Platform Configuration Process
The platform configuration processes report the exact documented configuration
of an equipment end item, prime system, or miscellaneous item. This process allows a
user to configure and reconfigure equipment to facilitate the removal of a defective
component and install a new component. For example, a prime system is a system
composed of “equipment end items, assemblies, components, modules, and parts” (PM
LIS, 2005, p. 5-32) to perform a specific mission. Prime Systems are readiness reportable
as individual equipment items. An equipment end item is a separate item of equipment
that “functions independently from other items” (p. 5-32). When equipment is
reconfigured, the configuration of the equipment is reported to LOGSA for readiness
reporting. Reporting of these changes is delayed because this information is rolled up
monthly to each hierarchy and reported to LOGSA. It is postulated that near real-time
visibility of equipment configuration changes is positively related to an increase in the
effectiveness of visibility of assets in maintenance (Department of the Army, 2005).
Work Order Management Process
The maintenance work order process spans every core process. For example, no
work can be performed on equipment that expends more than a quarter of an hour of
labor without a maintenance work order. This process also allows a user to create,
change, and close work orders on equipment, which updates the equipment’s status on
the equipment record maintained in LIS, because the Army must track direct and indirect
labor hours and the repair parts consumed in correcting faults and performing scheduled
services. For example, when a fault is found that cannot be corrected by the equipment
operator, a maintenance work order is opened to correct the fault. If the fault requires
54. 44
repair parts, parts are ordered against the maintenance work order, which records the
consumption of the parts against the work order in the LIS (Department of the Army,
2005), which contributes to the total cost of ownership for the equipment under repair.
In legacy LIS, when the repair is completed, the labor hours are recorded, parts
are issued and installed, and the maintenance work order is closed. Financial data are
applied to the maintenance order later by the installation resource management office.
When equipment cannot be repaired locally, the equipment and maintenance order are
forwarded to the next level of maintenance. This process supports the readiness reporting
process as the Army tracks equipment in maintenance at different levels of repair, such as
organizational, support, and depot. Work order data are rolled up and sent to LOGSA
weekly where they are loaded into the Work Order Logistics File (WOLF) in the LIDB.
However, legacy systems do not support near real-time visibility of work in progress.
Gattiker and Goodhue (2000) suggested that an ERP can enhance the maintenance
production processes of an organization by providing visibility of work order status,
which facilitates better control of work in progress.
In GCSS-Army, enhancements to the work order process have been made using
best business practices provided by the ERP software. No longer will a work order have
to be sent by a batch file; maintenance work orders contained in the ERP allow
management to forward maintenance work orders to the next level of maintenance in real
time. When the orders are forwarded, all maintenance related information is added to the
work order in near real-time. When a maintenance order is completed, all parts are
installed, labor hours are applied, and the maintenance order is technically closed, which
means that all financial data are applied to the order at the time it is closed, eliminating
55. 45
the need for financial reconciliations. Ng, Ip, and Lee (1999) suggested that a
maintenance work order process encapsulated in an ERP allows an organization to track
the maintenance operations, “procedures, and the labor expended” (2104) in a production
process. This functionality allows leaders to monitor the progress of jobs, thereby,
enhancing the maintenance process to the point to allow better “capacity planning and
capacity loading” (p. 2104) of the organization’s resources and providing real time
visibility of all work in progress. Finally, it is expected the enhancements made in this
process are positively related to the increase in the effectiveness of visibility of assets in
maintenance.
Manage Scheduled Maintenance Process
Equipment services process is a core process as described previously, and the
manage scheduled maintenance supporting process allows users to manage the complete
end-to-end process. All operator level services “are scheduled one year out” and a
tolerance of “10%” (Department of the Army, 2005, p. 38) is allowed before or after the
service is due. This process allows a user to create maintenance plans, set the interval
when the service is conducted, record completed services on the equipment’s preventive
maintenance schedule, and record Department of Defense (DD) Form 314. This process
also allows the SAMS-1E user to create a maintenance work order when an interval is
reached, assign the necessary resources, and order the necessary parts to complete the
service. When a service is completed, the DD Form 314 is annotated and the next service
is scheduled. However, service schedules are not visible outside the organization that
performs the services. For example, services and inspections are managed locally as
directed by the organization’s leadership. An enterprise wide view of scheduled
56. 46
maintenance will allow managers to better plan maintenance capacity and react to
changing maintenance requirements faster in a hostile environment. As a result of these
enhancements, it is postulated that having visibility over the scheduled maintenance
process in near real-time is positively related to an increase in the effectiveness of
visibility of assets in maintenance (Department of the Army, 2005).
Configuration & Maintenance Management Process
The configuration and maintenance management process allows users to view or
modify the equipment’s master data record when permanent configuration changes are
necessary. For example, when a modification work order (MWO) is applied to an
equipment item, it can change its configuration so that its model number, serial number,
or national stock number changes. This requires the equipment’s master data record to be
updated with the new configuration information. This process is also includes recording
and tracking software changes for equipment that contains embedded software programs.
Configuration changes are recorded on a DA Form 2408-4 that is maintained in a
separate information system, the “Modification Management Information System”
(Department of the Army, 2005, p. 132) (MMIS), which will be subsumed by GCSS-
Army. In legacy, users access MMIS through a web portal to retrieve configuration
information and manually input the data into LIS. It is proposed when these data are
contained in an enterprise system, equipment configuration will be easier to maintain and
more accurate. For example, when a new object is configured to a weapons system, it is
instantiated in the ERP and aligned to the system’s serial number instantly. It is proposed
that enhancements made to this process will increase the effectiveness of the process. As
57. 47
a result, it is expected to be positively related to an increase in the effectiveness of
visibility of assets in maintenance (Department of the Army, 2005).
Maintenance Supply Process
The maintenance supply process supports the four core maintenance processes by
providing the repair parts necessary to correct faults and perform services. Several
subprocesses are contained in the maintenance supply process area. These subprocesses
provide logisticians with a capability to issue, receive, and store material and retrograde
unserviceable repair parts back to national repair facilities. For example, if an equipment
operator finds a light bulb inoperative on a piece of equipment, the operator annotates the
fault on the equipment’s maintenance and inspection worksheet, and submits the form to
the SAMS-1E user, who checks the organization’s repair parts inventory, and issues the
light bulb to the operator, and decrements the inventory stock, and generates a
replenishment order for the part. If the light bulb is not on-hand at the organization, the
SAMS-1E system generates a parts request. The parts request is sent to the Standard
Army Retail Supply System-1 (SARSS-1) at the supply support activity via SFTP or by
removable media. When SARSS-1 converts the parts request to a purchase order and
sends the order to the national source of supply, the source of supply sends a supply
status to SARSS-1 and subsequently to SAMS-1E through the same communications
protocol the parts request was sent to SARSS-1. SAMS-1E then updates the equipment
record and DA Form 5988E with the supply status, which notifies the operator and
management that the part is on order.
If the part is on hand at the SSA, the part is issued to the customer, and the
SAMS-1E operator either replenishes the organization’s inventory for the consumed part
58. 48
or issues the part to the maintenance order, and updates the work order status. If the part
is issued to the work order, the technician installs the part, notifies the SAMS-1E operator
the part is installed, and the SAMS-1E operator updates the work order status in SAMS-
1E. The technician notifies the maintenance supervisor of the completed maintenance
action, and the maintenance supervisor performs a final inspection. If the final inspection
confirms that the work is completed, the SAMS-1E operator closes the work order and
notifies the owning unit that the equipment is ready for pick-up. This action updates the
equipment status in the equipment record to operational.
If the part is not on-hand at the SSA, the SSA generates a purchase order to the
national level supply system. When the national level supply system generates a supply
status for the repair part, SARSS-1 generates a supply status and sends the status to the
customer’s SAMS-1E. This supply status is updated regularly, based on predefined
system parameters until the part is received at the SSA and the customer picks the part
up. It is important to note that each status update for the part on order is done as a batch
file process. This batch file is transmitted to the system by means of removable media or
SFTP on a daily basis, and the operators of the systems must take action for the status
updates to take effect.
The maintenance supply processes in SAMS-1E were reengineered using best
business practices contained in the ERP. This reengineering collapsed many of the
inefficient processes contained in the SAMS-1E LIS to include the SSA retail supply
functionality. Having the maintenance supply and retail supply functionality within the
same enterprise eliminates the need for batch processing, because the material
requirements planning (MRP) module runs on a predetermined schedule picking up
59. 49
pending parts requests, converting them to stock transport orders (if the part is on hand)
or purchase orders (if the part is not on hand) and providing near real-time supply status
several times a day. It is proposed that this process will increase the effectiveness of the
maintenance process by providing near real-time supply status, facilitating better
maintenance planning. As a result of the supply process enhancements, it is expected that
the effectiveness of this process is positively related to an increase in the effectiveness of
visibility of assets in maintenance (Department of the Army, 2005; Department of the
Army, 2008).
Business Information
The outputs of the six supporting maintenance processes described above, in the
form of information, allow managers to assess maintenance capabilities, equipment
status, and prioritize maintenance and associated repair parts based on organizational
priorities. The information output of these processes allows organizational users to peer
into the maintenance processes to prioritize work and repair parts based on equipment
faults and urgency of equipment need. For example, the information provided by the
work order process allows management to assess current workload and what work is
backlogged, to shift work to different areas based on current and future priorities. If a
supported organization’s priorities change based on mission changes, managers can
assess workload and backlog and shift assets to different organizations for maintenance,
increasing equipment readiness.
60. 50
In Army doctrine, the information produced from legacy systems is used for many
purposes at different levels of the Army hierarchy. For example, non-supervisor
maintenance personnel such as clerks and mechanics use maintenance information to
create and manage maintenance work orders, replenish inventories, and resource
maintenance orders with appropriate repair parts, taking advantage of tactical level report
functions. Leaders and maintenance supervisors use maintenance information to
distribute maintenance activities and to ensure resources are available to resource
maintenance facilities adequately. These personnel also use information further up in the
hierarchy to ensure maintenance resources are adequately utilized and maintenance
organizations are performing work according to organizational priorities. Information at
this level is used to analyze capacity gaps and move assets around to ensure that
maintenance organizations distribute work load adequately across the operational
landscape. Also, at this level, maintenance information is used as input into the military
decision making process (MDMP) for exercise, deployment, and sustainment planning
and execution. Information used by leaders is considered to be operational information
(Department of the Army, 2005).
Because information is a critical output of maintenance processes, maintenance
reporting is the heart of the legacy LIS, because LIS were prone to data errors and
inconsistencies owing to errors, as well as to the need for a global view of equipment
readiness to aid in maintenance planning and decision making. This logistics reporting
requirement originates with manual maintenance processes and is still in force today to
resolve inconsistencies that exist because of isolated and disconnected LIS. Many of the
reports existing in legacy LIS are exact replications of the reports generated in the manual
61. 51
system. In many instances, once a report is generated, the legacy LIS purges the data used
to generate the reports, which remove historical data from the LIS. The only way to
review historical data is to log into the LIDB and search for the data (Department of the
Army, 2005).
GCSS-Army produces much of the same data that legacy systems produced, and
in many cases, GCSS-Army provides improved data sources for reporting. Unlike legacy
systems in which reports were static, GCSS-Army provides interactive screen displays
and reports that can be manipulated, resorted, and filtered as well as exported to standard
office automation software, such as Excel. Further, GCSS-Army’s screen view is
interactive, meaning that with no additional configuration, most maintenance processes
provide visual indicators (icons showing status) of equipment readiness, easing the
comprehension of data on the screen. In legacy, when leaders in higher echelon
organizations want to view equipment readiness for subordinate organizations, LIS
operators must send batch data files from one LIS to the other and then run a program in
the LIS to generate the reports. In GCSS-Army, anyone with the proper roles and
permissions can view maintenance capacity, backlog, and equipment readiness data for
an organization from any terminal on the military network.
In the context of this study, the enhancements made in the supporting
maintenance processes are expected to increase the accuracy, timeliness, and usability of
maintenance information, enhancing tactical and operational decision making. For
instance, an important finding in Karim, Somers, and Bhattacherjee’s (2007) research
suggested the information created by the six supporting maintenance processes can
improve tactical and operational level effectiveness of an organization by increasing the
62. 52
effectiveness of management decisions with regard to resource utilization, waste
reduction, responsiveness to customer demands, and improved quality. In light of this
finding, it is expected that the business processes will create the information necessary to
allow organizational users to assess an organization’s maintenance capabilities, which is
positively related to an increase in the effectiveness of visibility of assets in maintenance.
The information output of maintenance processes described above is generally defined in
this study as the information effect of business processes, and is the independent variable
in this study (Karim, Somers, & Bhattacherjee, 2007).
Enterprise Resource Planning Systems
Enterprise resource planning (ERP) systems are integrated systems that are multi-
dimensional in nature and are based on predefined business models as designed by the
manufacturer. These systems assist firms in planning, control, and resource optimization
(Jarrar, Al-Mudimigh, & Zairi, 2002). Further, Jarrar, Al-Mudimigh, and Zairi suggested
that an ERP is used as an “umbrella” (p. 124) for process integration allowing a single
view of operations from a single IT infrastructure. Integration allows a firm to share
common data allowing all users of the organization access to integrated data in “near
real-time” (Tsai, Chen, Hwang, & Hsu, 2010, p. 26). Jarrar, Al-Mudimigh, and Zairi’s
definition of an ERP aligns with other researchers in the field. However, other
researchers define ERP differently. For instance, Bendoly and Jacobs (2004) defined ERP
as an “approach” (p. 99) rather than a tool for organizational optimization. Finally, these
researchers suggested the purpose of an ERP is to track the status of daily transactions
and business activities.
63. 53
Motivations for Using an ERP
Enterprise resource planning systems are becoming valuable assets for firms
across many industries. Government agencies across the globe are realizing the
capabilities these systems offer to improve organizational performance and effectiveness.
Pabedinskaitė (2010) suggested ERPs are important to an organization’s survival; without
them, “enterprises could no longer function” (p. 691). Further, ERPs can create the
organizational “synergy” that provides organizations with the “stimulus” (p. 691) to
develop effective business processes leading to organizational success. Other researchers
identified many other motivations that drive companies to adopt an ERP.
Al-Mashari, Mudimigh, and Zairi (2002) suggested that the first of two
motivations for using an ERP is technological. Technological motivations include
meeting compliancy requirements, such as government regulatory requirements and the
“replacement of obsolete systems, improved visibility, and the integration of business
processes and systems” (p. 354). The second motivation is operational. Operational
motivations include “improving responsiveness to customers, improving inadequate
business performance, and reducing high costs structures” (p. 354).
The Army’s motivation to adopt an ERP solution fits into both categories. For
instance, over 16 legacy LIS are being replaced with GCSS-Army. Technologically, the
Army hopes the ERP platform will provide improved visibility over its logistics
processes, a single repository for logistics data, and integration of financial data.
Operationally, the Army needs to reduce its logistics foot print, reduce its logistics costs,
and improve its TAV capability, and the organization is planning on the ERP to help in
improving its capabilities for streamlined logistics. For example, Umble, Haft, and
64. 54
Umble (2003) suggested that an ERP can trim operating costs and “generate more
accurate demand forecast” (p. 244), which can add millions to the bottom line of an
organization. With respect to the Army’s logistics processes, costs can be reduced with
more accurate demand forecasting by reducing the size of its inventories carried forward
by combat service support organizations. The result of smaller inventories is a smaller
logistics footprint as well as a reduction in transportation costs associated with moving
these stocks across the battlefield. Umble, Haft, and Umble provided evidence that ERP
software implemented in Owens Corning saved the firm “$50 million in logistics,
material management, and sourcing” (p. 244).
Other researchers suggested different motivations for the use of enterprise
systems. For example, Nah, Lau, and Kuang (2001) suggested for most firms, the
aggressive use of IT in the pursuit of its business objectives is an effective strategy.
Accordingly, an ERP enables a firm to manage its resources more efficiently through
standardization and process oriented operations. Further, Jarrar, Al-Mudimigh, and Zairi
(2002) suggested ERP’s are used in a broad strategy to integrate business processes
allowing management to view and manage all aspects of operations from a single
infrastructure. Nikolopoulos, Metaxiotis, Lekatis, and Assimakopoulos (2003) agreed and
suggested that when firms implement an ERP, they “seek to streamline and integrate
operational processes and information flows” (p. 184). This comment aligns with
Pabedinskaitė’s (2000) suggestion that ERPs assist firms in creating synergy for more
effective operations.
65. 55
Tsai, Chen, Hwang, and Hsu (2010) suggested that in many cases, a firm will
choose to implement an ERP to “integrate and modernize” (p. 27). Modernization is
another motivation for the use of an ERP in the Army. The Army hopes to modernize its
logistics capabilities by collapsing over 16 LIS into a single enterprise system. Piggee
(2011) named this the “revolution in military logistics” (pp. 1-2), because the Army can
no longer afford to work with its isolated information systems. Gulledge and Sommer
(2002) suggested that using isolated information systems can reduce an organization’s
effectiveness in meeting its strategic goals. Further, modernizing the Army’s logistics
information systems will provide leaders with more accurate logistics information,
increased visibility of logistics processes, and increased accuracy in decision making.
In a government setting, Crisostomo (2008a) suggested that the main motivation
behind the use of an ERP is the incompatibility of its legacy systems with each other.
Allen, Kern, and Havenhand (2002) suggested the motivation for the use of an ERP in
higher education institutions is the elimination of “duplication of efforts and resources”
as well as to “to increase operational efficiency and effectiveness” of its business
processes (p. 227). This duplication of effort and resources typically stem from using
non-integrated information systems, which in many instances, duplicate the same services
provided to customers. The Army is experiencing problems with disparate legacy
systems. For instance, the Army has over 16 legacy logistics information systems that are
not integrated, which duplicates transactions, services, capabilities, and often creates data
inconsistencies across the organization.
