Centre for Strategic Manufacturing Assessing the impact of e-business on the business processes of manufacturing companies: A simulation approach Pável Albores Dr. Peter D. Ball Dr. Jillian MacBryde

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Agenda l Introduction l Modelling requirements for e-business l Levels of BPS l Project aims l Current BP models and generic e-business templates l Summary and Conclusions

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Business process approach to e-business analysis l E-business as way of simplifying business processes l Need to understand the dynamics of processes and their interaction l Evaluate the real benefit of e-business l Functional to process view

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Some modelling approaches l Process mapping è E.g. IDEF è Diagrammatic l Static tools è E.g. spreadsheets l Dynamic tools è Queuing theory è Simulation (discrete event) è System dynamics (continuous)

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Requirements for modelling l Multi-level / hierarchical è Gradually add detail in design or è Aggregate detail in operation for speed/simplicity l Randomness è Recognise real world is not predicable l Passage of time è Recognise the dynamics of the real world has critical impact l Flow of information AND product è Few true examples of this and yet this coordination has key performance impact l Modelling of e-business systems è Question of how to model

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January Conceptual Business process simulation 1 Levels of BPS application 2 2.Manufacturing systems simulation 3 3.Process Specific simulation 4 4.Enterprise-wide simulation 5 5.Supply-chain-wide Simulation

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Project aims l To investigate the suitability of simulation as a technique to analyse the effects that e-business has on the business processes of manufacturing companies. l To look at the differences between traditional and e-business processes for different e-business scenarios in the manufacturing sector. l To develop the methodology for the use of these tools and techniques.

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Research Approach l Research Methodology è Case Study l Primary (Concept feasibility) l Secondary (Construct building) l Primary (Construct testing) è Survey (Construct testing) l Modelling methodology è Simulation (General purpose tool) è Interviews è ERP system data

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Generic business process models l MIT (Business process repository) SuppliersCustomersSuppliers’ Supplier DeliverSourceMake Sourc e Delive r Company Plan Delive r Sourc e Delive r Sourc e Make Customer’s Customer l SCOR (Supply Chain Operations Reference model) l Open University (e-business processes in service sector) l Childe et al 1994 (CIMOSA)

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Analysis of Current Process models l Comparison of models against case studies. è Find differences between process models and cases (especially related to e-business) l Development of templates/components for e-business. è Initially thought templates would be all encompassing high level è Found templates do not adjust rigidly to proposed business process models è Decided to use smaller clusters that represent e- business activities

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Template operationalisation l Components developed in Simul8 l Testing Phase underway l User Survey l Further cases: Flextronics-2-, Kay Graphics, Coca Cola?

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Summary l Analysis of BPS levels l Description of e-modelling requirements l Change observed mainly in dynamics of processes è Change in dynamics (<time, <human involvement, < redundancy) è Change in performance metrics (>reliability, > quality of information) l Analysis of current business process models l Creation of e-process templates

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Conclusions l Simulation proved to be useful for the analysis of e-business implementation – highlighting potential benefits/problems. l Generic activities can be identified for e- processes and can be operationalised. l Are they useful? We’ll find out.

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Questions? Pavel Albores

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004 Contributions l Use of simulation in a new context l Description of e-process dynamics l Generic e-processes and study of their applicability. l Methods and procedures for integration of tools and techniques

Centre for Strategic Manufacturing © Pavel Albores 2004 RPD 22 January 2004