OMEGA Int. J. ofMgmt Sci., Vol. 21, No. 2, pp. 187-197, 1993 0305-0483/93 $6.00 + 0.

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Printed in Great Britain. All rights reserved Copyright © 1993 Pergamon Press Ltd

A Study on Manufacturing Resource

Planning (MRP II) Practices in Singapore
C-C SUM

K-K YANG
National University of Singapore

(Received February 1992; in revised form June 1992)

In response to the increasing regional and international competit/on, many manufacturing companies
in Singapore have adopted M R P II systems to improve on their business operations. Despite its
growing popularity, very little work has been done to monitor how companies are actually using M R P
II. This paper presents the largest survey study ever undertaken on the state-of-the-art application
of M R P II in Singapore. It describes the major survey findings on the practices, costs and benefits
obtained, and implementation process in M R P II companies. This study provides useful information
to managers, current users, potential users, vendors and promoters of M R P II. The study also serves
as a basis for future research. International readers are presented with valuable insights into how
manufacturing companies in a successful newly indnstrializln~ nation (NIE) like Singapore are
exploiting a powerful technology like M R P II to manage their operations. A comparison of the survey
findings with that of a similar study in the United States reveals an interesting difference.

Key words--inventory control, information systems, manufacturing, software, Singapore

INTRODUCTION countries [9]. From 1988 to 1990, the manufac-

SINCEGAININGINDEPENDENCEin 1965, Singapore
has developed from a entreport economy into a
highly dynamic and diversified centre of com-
merce, finance, manufacturing, distribution and
communications. Presently, Singaporeans enjoy
one of the highest standards of living in Asia.
Together with South Korea, Taiwan and
Hong Kong, Singapore is known as the "Asian
Dragons", a term used to acknowledge the
rapid and dramatic growth of these newly
industrializing economies (NIEs).
Over the past three decades, the manufactur-
ing sector has played an increasingly important
role in Singapore's economic growth. In 1960,
manufacturing accounted for only 11.3% of the
GDP. By 1990, its contribution had increased to
29.9%. During the depressed world economy in
the 1970s and mid-1980s, the manufacturing
sector achieved growth rates that were
surpassed only by the petroleum producing
187
turing sector registered impressive annual
growth rates of 18.4, 10.1 and 9.5% respect-
ively, and contributed to about 30% of the
GDP [6].
One reason for the outstanding performance
of the manufacturing sector is the government's
strong commitment to nurture manufacturing.
The government has viewed manufacturing as
the cornerstone of the economy and has been
very supportive by providing resources and
incentives for manufacturing to grow and excel.
The manufacturing companies have also shown
great resilience and responsiveness on their part
to new market conditions and challenges.
The increased globalization of markets and
operations in recent years has created pressure
on the Singapore manufacturing companies to
increase their operational efficiency so as to
remain competitive. The government and vari-
ous manufacturing associations have been ac-
tively encouraging manufacturing companies to
188 Sum, Yang--MRP H Practices in Singapore
upgrade themselves through mechanization,
automation and computerization. In response,
many manufacturing companies have im-
plemented MRW systems to enhance their pro-
duction capabilities and increase productivity.
The earliest MRP systems were installed in the
early 1980s [19].
MOTIVATION AND OBJECTIVES
Despite the growing popularity of MRP, very
little work has been done to monitor the state-
of-the-art application of MRP in Singapore.
The lack of work is possibly due to the novelty
of and lack of knowledge about the MRP
technology. To date, there are only a handful of
empirical studies on MRP practices [14, 19, 20].
The largest reported sample size is 36 [20].
This paper reports on the first extensive study
on MRP practices in Singapore. The major
objectives of the study are:
(1) to investigate MRP practices,
(2) to assess MRP costs and benefits and
(3) to understand the MRP implemen-
tation process.
The study has several important contributions.
The study represents the largest survey on MRP
practices in Singapore in terms of scope and scale.
Besides adding to the MRP literature, it also
provides ideas and a basis for future research.
The study acts as a vehicle of communications
for current MRP users to share information,
learn from one another and develop a better
understanding of the state-of-the-art usage of
MRP in Singapore. This sharing and exchange
of information is particularly important given
the novelty of MRP in Singapore.
For non-users and potential users of MRP,
this survey's findings are both educational and
informative. The experiences of the current
users provide a preview of what potential users
can expect to face and the pitfalls that they can
avoid when they adopt MRP. For non-users,
the findings create awareness and could trigger
interest in MRP.
~The term 'MRP' is used as a general term to denote all
versions of M R P II systems, namely, MRP I, closed-loop
MRP and manufacturing resource planning systems.
The findings are also important to top man-
agement and Singapore policy makers. As MRP
is increasingly adopted to achieve competitive
advantage, it is crucial for top management to
know how MRP is being used. On a national
level, the findings provide government policy
makers and other MRP promoters with a basis
to formulate and devise new strategies and
programs to assist the manufacturing sector to
enhance their use of MRP. Given the success of
the Singapore economy, the study offers valu-
able insights to international observers and
businessmen on how Singapore manufacturers
are exploiting a powerful technology such as
MRP for gaining competitive advantage.
The paper is organized as follows. The litera-
ture is reviewed in the next section, followed by
a description of the research methodology. The
survey findings are then presented. The paper
concludes with some implications of our
findings and future research directions.
LITERATURE
In countries such as the United States (US)
where MRP has been used for more than three
decades, there is an abundance of literature on
MRP usage. The most notable study on MRP
practices in the US is by Anderson et al. [1]
which surveyed 679 APICS members (see also
[2, 13, 17]). Other studies related to MRP usage
include [3-5, 8, 12].
As MRP is a relatively new technology, the
literature on MRP in Singapore is very scarce
and the earliest papers focused on the technical
aspects and mechanics of MRP [7, 10] and the
potential of MRP as a competitive weapon [11].
Empirical studies on MRP practices are very
limited. Yeo et al. [19] conducted a survey to
understand the level of implementation, degree
of success and implementation problems of
MRP users. Their sample size was 26. The
respondents identified reduced stock inventory,
reduced material waste and reliable delivery as
the major advantages of MRP. The critical
success factors were training in MRP concepts
and operations, top management support and
inter-departmental cooperation.
Other related empirical studies were con-
ducted by Yuen [20] and Sia [14]. Yuen [20]
developed an instrument for measuring MRP
effectiveness and tested the instrument on
36 respondents in her mail survey. The study
 Omega, Vol. 21, No. 2
proposed that M R P effectiveness can be
measured by the degree of data integrity, level
of management commitment and amount of
effort expended on education and training. Sia
[14] conducted a mail survey and collected 33
responses, of which only 21 had implemented
MRP.
SURVEY METHODOLOGY
It is not known how many companies in
Singapore have M R P systems. Several experts
and consultants estimated that the total number
of users with at least the basic M R P modules
like inventory control, bill of material, material
requirements planning and accounting is not
more than 150. As in Anderson et al. [2], the
primary intention of our study was to collect
information from as many companies as poss-
ible. With the short presence of M R P in Singa-
pore, this approach makes sense because it
enables us to obtain a wide assessment of M R P
practices in Singapore. A mail survey method-
ology was used to reach out to as many compa-
nies as possible. 2
The questionnaire was tested by practitioners,
consultants and academics before it was sent to
the companies. The target companies were com-
piled from various sources such as government
agencies, manufacturing associations, directo-
ries, vendors, consultants and personal contacts.
Due to the confidentiality agreements between
the vendors/consultants and their clients, ques-
tionnaires were sent to the vendors and consult-
ants to be re-directed to their clients. Because of
this arrangement, it is not known if some clients
are already on our own mailing list or how
many questionnaires were actually sent from the
vendors and consultants. We, therefore, do not
know exactly how many companies received the
questionnaire. We estimated that about 750
companies received our questionnaire.
A total of 128 responses was received, of
which 59 had implemented MRP. Typical
designations of the respondents included the
Materials Manager, Production and Inventory
Control Manager, Master Scheduler, MIS
Manager and Production Manager.
2The survey is jointly conducted by the Faculty of Business ational concerns and it is no surprise that M R P
Administration, National University of Singapore is more readily found in these industries.
and the National Computer Board which is a quasi-
government body responsible for the promotion and
application of information technologyin Singapore.
189
Assuming that 750 companies received our
questionnaire, the response rate is 17%. Though
this response rate is respectable, it is not a very
meaningful indicator of the degree of success of
our survey. The reason is that we do not know
how many non-responding companies have
M R P systems. Furthermore, we suspect that
a large percentage of the non-responding
companies have little or no interest in the M R P
technology to respond to the non-MRP cat-
egory in our questionnaire. We are also confi-
dent that quite a number of companies were
duplicated in our mailing list and the client lists
of the vendors and consultants. The sample size
of 128 should therefore be judged in relation to
our objective of capturing information from as
many companies as possible. Compared to pre-
vious work where the largest sample size is only
36 [20], the number of responses in our survey
is a very respectable one.
RESULTS AND DISCUSSION
This section describes the major findings of
the survey. To the best of our knowledge, there
are no publications of a similar nature on M R P
practices in the other "Asian Dragon"
countries. However, to present our findings in a
broader context, we have compared our find-
ings, whenever possible and meaningful, with
studies elsewhere and in particular, Anderson et
al.'s studies [1, 2, 13, 17]. To date, Anderson et
al. [1] represents the most comprehensive study
on M R P practices in the US and the papers
[2, 13, 17] based on the study are commonly
referenced in the M R P survey literature.
Company profile
A wide variety of industries was represented
in the responses. Table 1 shows the categoriz-
ation of the respondents using the SSIC
(Singapore Standard Industrial Classification)
scheme. The largest representation of M R P
companies was from the electronic products and
components, fabricated metal products and
electrical machinery, apparatus and supplies
industries. In these industries, materials man-
agement and scheduling are the primarily oper-
Figure 1 and Table 2 display the gross sales
in 1990 and company characteristics, respect-
190 Sum, Yang--MRP H Practices in Singapore

Table 1. Type of industries

MRP Non-MRP
Description companies (%) companies (%) Overall (%)
Food 1.7 5.8 3.9
Textile & textile manufacturers 1.7 2.9 2.3
Wearing apparel 0.0 1.4 0.8
Furniture & fixtures 1.7 1.4 1.6
Paper & paper products 5.1 1.4 3.1
Printing & publishing 0.0 10.1 5.5
Paints, pharmaceutical, 6.8 4.3 5.5
& other chemical products
Petroleum refineries/products 5.1 0.0 2.3
Plastic products 3.4 4.3 3.9
Non-metallic mineral products 0.0 1.4 0.8
Iron & steel 0.0 2.9 1.6
Fabricated metal products 10.2 11.6 10.9
Machinery 3.4 2.9 3.1
Electrical machinery, apparatus, 10.2 10.1 10.2
appliances & supplies
Electronic products & components 40.7 21.7 30.5
Transport equipment 6.8 1.4 3.9
Instrumentation equipment, 3.4 8.7 6.2
photographic & optical goods
Other manufacturing industries 0.0 2.9 1.6
Others 0.0 4.3 2.3
Total 100.0% 100.0% 100.0%
n= 59 69 128

ively. A few observations can be made about the
profiles of the MRP and non-MRP companies.
Size and age. Figure 1 suggests that as a
company increases in size as measured by gross
sales, it has a greater tendency to adopt MRP.
The percentage of companies with MRP in-
creases from 18.4% for sales less than S$10
million to as high as 83.3% for sales between
S$200 and S$500 million. As a company grows
in size, the manufacturing operations become
larger in scale and more complex and the need
for computerization is greater. Also, bigger
companies could better afford MRP systems
which are not cheap. A similar trend of MRP
ownership in relation to size is also reported in
Anderson et al. [2].
The age profile in Table 2 suggests that MRP
is more readily found in older companies. The
reason could be that as a company matures and
35 1~ aq,,
30
•- 25
~ 20
o 15
5 while an equal percentage (20.3%) run on
0 microcomputers and mainframes. A majority of
<10 10-50 50-100 100-200 200-500
Sales (S$ million)
Fig. 1. 1990 g r o s s sales.
becomes more established, it is more willing to
invest in longer term enhancement projects such
as MRP.
Product, process and layout. A major obser-
vation drawn from Table 2 is that MRP is more
prevalent in companies with relatively complex
manufacturing processes and operations. A
majority of the MRP companies manufacture
to-order or a combination of to-order and to-
stock products. These companies operate in a
complex environment of meeting delivery dates,
material coordination, priority scheduling and
high inventories. MRP is also more widespread
in companies that engage in complicated manu-
facturing processes (assembly and fabrication
operations, job shop layouts) than in companies
with simpler continuous flow processes. It ap-
pears, therefore, that the level of MRP commit-
ment is closely related to the complexity of the
manufacturing operations and environment.
The higher level of MRP commitment for
companies operating in complex environments
was also observed in Anderson et al. [2].
M R P system characteristics
Hardware and software. About half (49.2%)
of the MRP systems run on minicomputers
>500 the companies (71.1%) source their MRP soft-
ware from vendors. Apparently, companies
prefer to buy turn-key systems to shorten the
 Omega, Vol. 21, No. 2 191

Table 2. Company characteristics

MRP Non-MRP
Characteristic companies (%) companies (%) Overall (%)
Ownership
Government 3.4 0.0 1.6
Private, with <30% local equity 5.1 10.3 7.9
Private, with />30% local equity 25.4 47.1 37.0
Multi-national corporation 59.3 29.4 43.3
Others 6.8 13.2 10.2
Total 100.0% 100.0% 100.0%
Age
Less than 3 years 10.2 7.4 8.6
4-5 years 10.2 7.4 8.6
6-10 years 16.9 26.5 21.9
11-15 years 32.2 25.0 28.1
More than 15 years 30.5 35.3 32.8
Total 100.0% 100.0% 100.0%
Type of products
Make-to-order only 33.9 39.1 36.7
Make-to-stock only 18.6 14.5 16.4
Make-to-stock and make-to-order 47.5 36.2 41.4
Others 0.0 10.1 5.5
Total 100.0% 100.0% 100.0%
Manufacturing process
Assembly only 28.8 11.6 19.5
Fabrication only 6.8 10.1 8.6
Assembly and fabrication 33.9 20.3 26.6
Repair/service 8.5 7.2 7.8
Continuous/process flow 13.6 37.7 26.6
Others 16.9 14.5 15.6
Total 108.5%' 101.4%' 104.7%'
Layout
Job shop 32.2 30.4 31.3
Continuous process 22.0 39.1 31.3
Assembly line 35.6 23.2 28.9
Others 10.2 11.6 10.9
Total 100.0% 104.3% a 102.4%'
'Percentages do not add up to 100 because several companies gave multiple answers.

MRP implementation time frame. These com- planning (CRP). The basic modules are also the
panies could also take advantage of the consul- easiest to computerize as they represent the key
tancy services offered by most vendors. Only a essential activities in any manufacturing
small percentage of companies (13.6%) develop company and, hence, information is readily
the entire software in-house. available for computerization.
Degree of computerization. Computerization
is the essence of the MRP implementation pro- Table 3. Degr~ of computerization of MRP modules
cess. Given the wide array of MRP modules, Mean
Module score'
companies will only install those that meet their
Inventory control 4.26
specific requirements. Table 3 presents the de- Bills of material 4.18
gree of computerization for various MRP mod- Purchasing and receiving 3.74
Material requirements planning
ules. (parts explosion) 3.57
Considering that companies have different Accounting 3.35
Cost accounting 3.20
implementation time frames, Table 3 suggests Sales order processing 3.18
that companies adopted a sequential approach, Routing/work centers 2.98
Financial analysis 2.73
as advocated by Wallace [16], in computerizing Payroll/personnel 2.61
the modules. The basic MRP modules such as Master production schedule 2.56
Shop floor control 2.12
inventory control, bill of material, purchas- Detailed operations scheduling 1.79
ing/receiving and material requirements plan- Capacity requirements planning (CRP) 1.53
Forecasting 1.3 l
ning are implemented first to build a foundation Rough-cut capacity planning (RCCP) 1.27
for the more advanced modules such as routing, "Based on a six-point Liken scale, score '0' for 'not at all', '1' for
shop floor control and capacity requirements '1-20%', .... "5' for '81-100%'.
192 Sum, Y a n g - - M R P H Practices in Singapore

In Anderson et al. [2], the most highly com-
puterized modules were bills of material, inven-
tory stock control and parts explosion which
match our findings. It appears, then, that the
pattern of module adoption for Singapore users
and their US counterparts is similar. This simi-
larity in adoption strategy can be explained by
the fact that the current Singapore MRP 'move-
ment' or 'crusade' is spearheaded by promoters
and consultants who subscribe heavily to the
ideas developed by MRP gurus such as Joe
Orlicky, George Plossl and Oliver Wight who
pioneered the MRP 'crusade' in the US.
Table 3 indicates that the mean scores for the
more sophisticated modules such as financial
analysis, CRP, RCCP, are quite low. This
suggests that not many MRP systems are
closed-looped or integrated with other func-
tional business areas. In other words, most
companies are Class B, C or D users according
to Oliver Wight's classification [18].
The operational effectiveness of the MRP
system is measured not only by what has been
computerized and the degree of computeriza-
tion, but also the degree of integration among
the computerized modules. Fifty-six percent of
the respondents reported a degree of integration
of at least 60%, suggesting that the MRP
systems are quite integrated. About 31% of the
respondents indicated that 80% or more of their
computerised modules are fully integrated.
System features. Table 4 presents some com-
mon MRP system features. For comparative
purposes, the findings in Anderson et al. [2] are
displayed alongside our responses. Table 4 illus-
trates that the MRP systems in Singapore are
generally smaller than those in the US as
measured by the number of items in the bills of
material. The pattern of responses for the other
features between the Singapore and US users
appear to be quite similar. Table 4 indicates that
a higher percentage of Singapore systems have
pegging capabilities and a higher percentage of
users employ cycle counting compared to their
US counterparts. Most Singapore users update
their systems on a weekly basis using both net
change and regenerative methods. While a ma-
jority of the US systems plan in weekly time
buckets, almost one-third of the Singapore sys-
tems plan in daily time buckets, a feature that
increases the accuracy of planning and is made
possible by the recent advances in computer
storage and processing technologies.
Definition of 'MRP'. The earliest MRP sys-
tems were developed as a tool primarily for the
manufacturing department only. The MRP sys-
tems today are much more broader in scope and
encompass the planning and implementation
activities in other business areas such as market-
ing, purchasing and finance. According to
Wight [18], the latest regeneration of MRP
systems provides a game plan for the entire
company. The effective use of MRP depends to
a large extent on how a company perceives the
role and scope of the MRP system. We investi-
gated this perception by asking the respondents

Table 4. MRP system features

Singapore
Feature Description (present study) United States'
Number of end-items 860 3002
Number of components/parts 4756 25,782
Number of BOM levels 5.1 6.9
Pegging Yes 80.9% 55.1%
No 19.1% 44.9%
Cycle counting Yes 75.5% 61.4%
No 24.5% 38.6%
Update method Net change 32.0% 30.3%
Regenerative 24.0% 69.7%
Both 44.0% NA b
MPS update frequency Weekly 41.5% 56.7%
Daily 28.3% 16.4%
Other 30.2% 27.0%
MPS (in weeks) 22.8 40
Timebucket size Monthly NA 12.5°/*
Weekly 55.4% 70.4%
Daily 30.3% NA
Other 14.3% 27.0%
Most common lot Lot-for-lot NA
Sizing technique
aResults extracted from Anderson et al. [2].
b'NA' m e a n s response is not available because option was not reported in Anderson et al. [2] or not
included in our survey.
 Omega, Vol. 21, No. 2 193

Table 5. Definition of term 'MRP' 20-50

% of
Definition companies
Computerized materials/production 17.2 50-100 <10
planning and control system for
production only
Primarily computerized materials/production 67.2
planning and control system
integrated with other business areas
to achieve a total business system
General system for computerizing 12.1 >500
any business function
Others 3.5
100-200 ~
Total 100.0%
200-500

how their companies define the term 'MRP'. Investment (S$'000)

Table 5 indicates that most companies (67.2%)
regard MRP as a total business system. This is
a healthy sign as it suggests that most Singapore
users understand the extensive scope of MRP
and are in a better position to exploit its stra-
tegic potential.
Costs and benefits
Figures 2 and 3 show the current MRP
investment (hardware and software) and the
additional investment planned for the next 3
years, respectively.
Figure 2 suggests that there are two major
groups of users. The first group comprises
smaller users who had spent between S$100,000
and S$300,000 while the other group of larger
users had spent more than S$500,000. Further
analysis revealed that the smaller systems be-
long to small and medium enterprises while the
larger systems are owned by the multi-national
corporations and bigger enterprises. The ad-
ditional system investment is more evenly
spread among the different types of enterprises
(Fig. 3), indicating that the smaller companies
100-200
200-3
Fig. 3. A d d i t i o n a l i n v e s t m e n t over the next 3 years.
are also prepared to further invest large
amounts in their MRP systems.
The major MRP benefits are displayed
in Table 6. As the benefits should be related
to the implementation reasons, we have
presented the implementation reasons in
Table 7. The major implementation reasons are
similar to those reported in White et al. [17]. Of
interest is the observation that improving com-
petitive position was not a top reason for imple-
menting MRP. The top reasons are primarily
operational in nature. It appears that there are
companies that, while recognizing the strategic
potential of MRP (see Table 5), are intending to
employ MRP as a tool for improving oper-
ational efficiency rather than as a means for
increasing competitiveness.
While most of the benefits match the im-
plementation reasons, few companies reported
any significant increase in competitive position
(Table 6). Companies, therefore, are reaping
real operational benefits (better delivery, better
scheduling, better response to changes, etc) but
have not perceived any strategic or competitive

<I00 Table 6. Major MRP benefits

Mean
Benefit scorea
300-400 Better meeting of delivery dates 3.96
Better production scheduling 3.87
400-50 Better ability to meet volume/product changes 3.83
Better cost estimation 3.69
Improved productivity 3.66
Lower inventory costs 3.65
Shorter delivery lead time 3.52
>500 Increase throughput 3.48
Reduced safety stocks 3.46
Improved competitive position 3.40
Investment (S$'000)
abased on a five-point Likert scale, score '1' for 'low benefit', '5' for
Fig. 2. System investment. 'high benefit'.
194 Sum, Y a n g - - M R P H Practices in Singapore

Table 7. Major implementation reasons Table 9. Implementation problems

Mean Mean
Reason scorea Problem score a
Meet delivery dates better 4.25 Lack of company expertise in MRP 3.02
Lower inventory costs 4.06 Lack of training/education on MRP 3.00
Improve productivity 3.98 Lack of communication 2.68
React better to changes in volume/product mix 3.91 Lack of suitability of software 2.62
Shorten delivery lead times 3.74 Lack of support from vendor 2.53
Improve competitive position 3.74 Lack of information technology expertise 2.52
Increase throughput 3.60 High cost of MRP system 2.49
Improve quality of products 2.77 abased on a five-point Likert scale, score '1' for 'weak problem', '5'
aBased on a six-point Likert scale, score "0' for 'not at all', '1' for for "strong problem'.
'weak reason', '5' for 'strong reason'.

Implementation problems. Table 9 highlights

advantage from using MRP. Interestingly, in
Schroeder et al. [13], the major benefits were
also mainly operational and very few companies
recorded any improvement in competitive
position.
Implementation
Initiator of MRP. The person or department
championing MRP can affect the extent and
rate of acceptance of the system in a company.
Most Singapore companies mentioned that top
management played a major role in introducing
MRP into their companies (Table 8). Top
management's early involvement indicates that
it is enthusiastic about and committed to the
implementation of MRP. This is a good sign as
the lack of top management commitment has
often been identified as a major implementation
problem [3, 5, 17].
In Table 8, 67.8% of the Singapore com-
panies, while only 18% of the US companies,
cited top management as the MRP initiator.
The huge difference of almost 50 percentage
points implies that the Singapore top
management is more involved than their US
counterparts in championing MRP. Table 8
also shows that the Singapore P&IC manage-
ment plays a less significant role in bringing
MRP into the company compared to its
US counterparts.
the major organizational and system problems
encountered during implementation.
The low values of the mean scores in Table 9
imply that the implementation problems en-
countered are not very serious. The major im-
plementation obstacle is the lack of company
expertise in MRP which can be attributed to
insufficient education and training on MRP
within the company or at a national level. The
lack of top management commitment, which
has been reported in several studies [2, 5] as a
major obstacle, was not cited as a predominant
problem. This is consistent with Table 8 which
suggests that top management is involved at the
onset of the MRP implementation process and
is likely to be committed to MRP.
It is also interesting to note that the cost of
MRP systems is not a major barrier to MRP
implementation. Companies appear to be more
concerned with operational and technical issues
such as lack of MRP expertise and suitability of
software than with the high cost of the MRP
system. This suggests that the companies might
be strongly aware of the need to upgrade and
are committed to use MRP to improve on their
operations.
Growth of M R P
Figure 4 provides a perspective on the growth
of MRP users in Singapore. The earliest MRP

Table 8. Initiator of MRP

% of companies
Singapore
Initiator (present study) United States a
Top management 67.8 18.0
Production & inventory control (P&IC) management 6.8 31.0
Both top management and P&IC management 18.6 31.0
Data processing personnel 3.4 10.0
Software/hardware vendors 5.1 NA b
Other 0.0 10.0
Total 101,7% c 100.0%
aResults extracted from White et al. [17].
b'NA' means response is not available because option was not reported in White et aL [17].
CPereentages do not add up to 100 because several companies gave multiple answers.
 Omega, Vol. 21, No. 2 195
25
of information are high promotion priorities for
eL
20 m

MRP companies while non-MRP companies

felt that low cost consultancy should be
°u 15 K)
available.
lO

s IMPLICATIONS AND CONCLUSION

o As global competition becomes intense,
1981 1 9 8 2 1 9 8 3 1 9 8 4 1985
Implementation year
Fig. 4. Growth of MRP II users.
systems in our sample were installed in 1981.
Figure 4 exhibits a sharp growing trend in the
ownership of MRP, especially between 1988 and
1990. The upward trend is a reflection of the
increasing commitment shown by manufactur-
ing companies in using MRP. The growing
ownership can be attributed to factors such as
the need to upgrade so as to stay competitive,
increased education and promotion of MRP by
government authorities and MRP pioneers, and
the availability of affordable systems for small
to medium sized companies.
Promoting MRP in Singapore
Of interest to government authorities, manu-
facturing associations, vendors and consultants
is the promotion of MRP in Singapore. The
respondents were asked to indicate the areas
that are important in promoting MRP in Singa-
pore. The rankings for the various areas for
MRP and non-MRP companies are shown in
Table 10.
Both MRP and non-MRP companies share a
common opinion that government support is
paramount to the promotion of MRP. The
reliance on government support could be a
positive acknowledgement of the government's
past contributions in setting directions and
providing initiatives for changes in the manufac-
turing sector. Education, training and exchange
×> ,~
X.> ,..
1986 1987 1988 1989 1990
more and more manufacturing companies in
Singapore are committed to use MRP to
manage their operations. Since its introduction
in the early 1980s, MRP has been implemented
in companies from a wide variety of industries.
Though MRP is owned by both large and small
companies, the survey findings suggested that
MRP is more commonly found in larger compa-
nies and companies that operate in complex
manufacturing environments.
A majority of the MRP companies have
installed the basic MRP modules such as inven-
tory control, bill of material, material require-
ments planning and accounting. The benefits
obtained from MRP are real and derived mainly
from the basic modules. While most companies
consider MRP as a total business system, few
have implemented advanced modules such as
CRP, shop floor control and finance to achieve
Class A status yet.
While most of our findings paralleled those in
the Anderson et al. study [1, 2, 13, 17] in terms
of ownership trends, system features, implemen-
tation strategy, implementation reasons, and
benefits, an interesting difference emerged in the
degree of top management commitment. The
Singapore top management seems to be more
committed to MRP than their US counterparts.
Compared to the US results, a higher percent-
age of Singapore top management championed
MRP and the lack of top management commit-
ment was not a major implementation problem.
As the Singapore MRP companies are generally
smaller than the US ones, the relatively higher

Table 10. Areas for promoting MRP in Singapore

Rank
MRP Non-MRP
Area companies companies
Government support I 1
(e.g. grants, tax incentives)
Low cost consultancy 5 2
Education and training provided 3 3
by software/hardware vendors
Education and training provided 2 4
by government/prnfessional bodies
Information sharing among users 4 5

OME 21/2--E
196 Sum, Yang--MRP H Practices in Singapore
M R P investment could have caused the Singa-
pore top management to be more concerned
a b o u t the outcome o f M R P . In addition, M R P
was introduced much later in Singapore than in
the US, and this allows the Singapore top
management to be more informed a b o u t the
importance o f top m a n a g e m e n t commitment
from a larger accumulation o f implementation
literature.
A major implication o f our findings is that the
majority o f the Singapore companies are not
employing M R P as a competitive weapon. The
implementation reasons are primarily oper-
ational rather than strategic in nature. In ad-
dition, few companies observed an increase in
competitiveness after implementing M R P .
There exist, therefore, opportunities for the
current M R P users to enhance the competitive
use o f M R P .
Lack o f M R P expertise, training and edu-
cation were identified as the major problems
facing M R P implementers. M R P training and
education was also highlighted as a significant
factor in p r o m o t i n g M R P in Singapore. The
need for M R P education and training is
understandable given the newness of the M R P
technology. In this regard, manufacturing
associations, educational institutions and
private and government training agencies can
address this need through appropriate training
p r o g r a m s and courses. Education on the
competitive use o f M R P is also needed.
A n o t h e r implication o f our findings is that the
government will continue to be a major player
in the development o f the manufacturing sector.
M o s t companies rely on the government to
p r o m o t e M R P in Singapore, reflecting the
amiable and dependent relationship between
the government and the manufacturing sector.
As M R P system cost is still a major impediment
to n o n - M R P users, the government should
continue to make available current incentives
such as tax reliefs, financial assistance, grants,
subsidies and low cost training and consultancy
services [15] to assist the manufacturing
companies to adopt M R P .
This paper has provided an overview o f the
state-of-the-art M R P practices in Singapore.
Future research could take several directions.
Empirical research could take the form o f
periodic surveys to monitor the progress
and status o f M R P usage in Singapore. Case
studies could be carried out to better understand
the complexities of the implementation process
and to study how companies cope with organiz-
ational changes that accompany M R P adoption.
More research needs to be conducted to discover
how companies could use M R P to compete
better. Comparative studies could also be carried
out to assess differences and similarities o f M R P
practices a m o n g the other N I E s and developed
countries.
ACKNOWLEDGEMENTS
We are grateful to Professors Roger Schroeder and John
Anderson for their assistance in the development of the
survey questionnaire. This research was supported by a
grant from the National University of Singapore.
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ADDRESS FOR CORRESPONDENCE: Dr C-C Sum, Department
of Decision Sciences, Faculty of Business Adminis-
tration, National University of Singapore, 10 Kent Ridge
Crescent, Singapore 0511, Singapore.