MANUFACTURING ENTERPRISE MODEL & PROCESS

SOCIETAL

ENVIRONMENTAL

LEGAL

21st Century Manufacturing Enterprise

PROCESSES

Customers

• The goal of the enterprise is to realize profits by delivering value to the customer

• The enterprise must have a range of processes and support systems that enable its people to manage customer relationships

• Key Processes– Marketing– Sales– Customer Support– Product Life Cycle

Management

PROCESSES

Suppliers

• Suppliers provide the inputs that the enterprise needs to deliver value to the customer

• The enterprise needs effective channels to work with its suppliers

• Key Processes– Sourcing– Forecasting– Procurement– Logistics Management

PROCESSES

Processes

• These are examples of the core business processes that enable the enterprise to create value

• Other supporting processes are needed to manage and conductthe operational goals of the enterprise

DEFINE

MARKET

SOURCE PLAN

MAKE

DELIVER

SUPPORT

SELL

RETURN

PROCURE

FORECAST

PROCESSES

Collaborative Communications

• Collaborative communications are increasingly being used to connect the actors across the extended enterprise

• Collaborative Engineering and Collaborative Forecasting are examples of these activities

Shared Knowledge Systems

• Integrated information services enable actors across the value chain to access information that provides a global view of the enterprise

• Shared knowledge systems can range from very broad enterprise applications such as Enterprise Resource Planning , Supply Chain Management, or Customer Relationship Management or process specific applications such as cell control, material handling, or machine tool control.

PROCESSES

CONTENT

INFRASTRUCTURE

APPLICATIONS

People

• People are the most important part of the enterprise. Managing the “human capital” of the enterprise is fundamental to the success of the organization.

• Key processes:– Planning– Staffing/Sourcing– Labor Relations– Education and Training– Compensation & Benefits– Recognition/Advancement

Stakeholders• The manufacturing enterprise

is part of a variety of communities. Those communities can be defined on the basis of their geographic, national, market, or industry.

• It has responsibilities to those communities and to other constituents such as:– Investors– Customers– Suppliers– Employees– Trading Partners– Government

Legal• The manufacturing enterprise

depends on a stable legal and regulatory environment. Business depends on a framework that promotes trust. Consistent enforcement of laws and regulations are the basis of that trust.

• Key Processes– Contract Management– Intellectual Property

Management– Risk and Liability Management– Labor Management– Dispute Resolution– Litigation

Environmental• Manufacturing Enterprises

have a special obligation to be stewards of the resources they employs to create and deliver value to their customers. The management of resources and wastes throughout their lifecycle is becoming increasingly important to ensuring a sustainable future (try to write it by own)

• Key processes:– Green Manufacturing– Recycling– Waste Stream Management– Regulatory Compliance– Environmental Product and

Process Design

Societal

• The 21st Century Manufacturing Enterprise exists in an increasingly global environment.

• Successful enterprises will consider how global factors influence their strategies, product/service offerings, and value chain relationships

• Key Processes– Currency Management– Sourcing and Procurement– Sales and Distribution– Cultural Integration– Community Relations

Integrated Business Management Model

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Customers, resellers…

Buyers, distributors…

E-business application architecture

LogisticsProductionDistribution

MarketingSalesCustomer service

SAP R3

Siebel

AribaPeopleSoft

Oracle

J.D.Edwards

Procurement

Business Process Management

Business Process Management

• Business Process Automation

• Business Process Improvement

• Business Process Transformation

• Business Process Management and the IS development cycle

Business Process Management

• Business process management is when the organization attempts to improve the efficiency and effectiveness of their operation by focusing on their business processes.– Companies normally hire when the economy

is booming.– Companies look for ways to cut costs during

down economic times.

Business Process Management

• Business Process Automation (BPA) involves automating some aspect of the business process through the application of information technology.

• Business Process Improvement (BPI) involves employees looking for ways to improve the process incrementally.

• Business Process Transformation (BPT) examines how the business operates and then looks for ways to fundamentally and radically change those operations.

Business Processes

• A process perspective encourages managers to: – See every aspect of the business as customer

driven.– Make employees responsible for the whole

process, rather than for just one task in it.– Focus on how work is done, rather than just

on what is done.

Business Process Automation

• Business process automation is where a manual process is replaced by one that is supported by an information system.– Automated order entry system replacing a

manual inventory count and manual order.– Using Quicken to process and print payroll

checks.– Using bar code scanners to replace keying in

the product code.

BPI and BPT

• Business Process Re-engineering (BPR) was the original term. ( fr slide 10)– “Re-engineering is the fundamental rethinking

and redesign of business processes to achieve dramatic improvements in critical measures of performance.” (Hammer and Champy 1990)

– Now it is called either BPI or BPT depending on the scope of the re-design effort.

Business Process Improvement

• Other Philosophies for change:– Continuous Improvement– Total Quality Management (TQM)– BPI is a more general term, and

encompasses both CI and TQM. – BPI takes longer to implement than

these other philosophies.– BPI tends to be driven by the bottom up

approach.

BPI

• Business Process Improvement (BPI) involves employees looking for ways to improve the process incrementally.

• Implies an ongoing search for excellence.• Involves everyone in the company continually

search for incremental improvements in everything the company does.

• BPI tends to be driven by the bottom up approach – with strong input from the workers.

Principles of Business Process Improvement

1. Quality is what the customer says it is.2. Think of yourself as the customer.3. Customer satisfaction is impossible without

employee satisfaction.4. Improve continuously.5. Leadership and accountability make quality

happen.6. Focusing on quality increases efficiency;

focusing on efficiency often decreases quality. 7. If you can’t measure it, you can’t manage it.

BPT

• Business Process Transformation (BPT) examines how the business operates and then looks for ways to fundamentally and radically change those operations.

• BPT tends to be driven by the top down.• Tends to be short-term and discrete (one-

shot) projects. • Usually most of the re-design work is done

by consultants from outside the company.

Principals of BPT( do it)

1. Organize around outcome, not tasks.2. Have those that use the output of the process

perform the process.3. Subsume information processing work into the

real work that produces the information.4. Treat geographically dispersed resources as if

they were centralized.5. Put the decision point where the work is

performed, and build control into the process.

IS and Business Process Management

• Developing information systems should not be viewed as a separate activity from business process management.

• First we need to redesign the process (if necessary)

• Then design the IS to support the new process. • Don’t automate unnecessary activities and

procedures. • Before paving the cowpaths, straighten it!

Implementing ERP Systems

• Should we change our business practices to match the way the software works, or should we try to change the software to match the way we currently do business?

• Customization issues

• Integration issues

• Upgrading issues