Strategic Cost Management using AI and ERP Systems: A Case Study of Composite Textile Factories"
Description
This paper investigates how the convergence of Artificial Intelligence (AI) and Enterprise Resource Planning (ERP) systems reshapes strategic cost management (SCM) in composite textile factories — vertically integrated facilities combining spinning, knitting/weaving, dyeing-finishing, and garment manufacturing. Using a mixed-methods case-study design across six composite mills in Bangladesh (combined turnover ≈ USD 612 M), the study triangulates 142 practitioner surveys, 18 semi-structured executive interviews, 24 months of plant-level ERP transaction data, and a curated open dataset hosted on Mendeley Data. Results show that AI–ERP integration reduced unit conversion cost by 9.4%, lifted forecast accuracy from 68% to 89%, improved Overall Equipment Effectiveness (OEE) by 16 percentage points, and produced an average payback of 13 months. The paper contributes (i) a conceptual framework linking AI–ERP capabilities to Activity-Based Costing, Target Costing and Kaizen Costing; (ii) empirically validated adoption barriers; and (iii) a practitioner playbook for South-Asian textile manufacturers under margin pressure from compliance, energy, and ESG mandates.
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Institutions
- University of ChittagongChittagong, Chittagong