Business Process ReengineeringBusiness Process Reengineering

Office Furniture IndustryOffice Furniture Industry

Team 4

Alejandra

Valeria

Kevin

Karen

IntroductionIntroduction

• The Furniture Industry is classified as one of the most important

manufacturing industries in the world.

• Modular furniture industries are normally small or medium size.

• Shorten lead times and accurate deliver time are the most important

things to achieve competitive advantage.

• Because of the changing economic environment, these companies

have a motivation to adopt BPR for reengineering their original process • Cost reduction

• Better performance

• Customer satisfaction

• Flexibility

• Innovation

Office Furniture Industry ChallengesOffice Furniture Industry Challenges

• Furniture manufacturers share many common characteristics

• Challenges

• Mass customization

• Reduced lead times

• Sales automation

• Access to business information

• Technology integration

•Highly competitive•Price and delivery critical•Demand driven – flexiblemanufacturing

•Variety of products

•Variety of finishes ⇒ highly customized

•Labor intensive•Large-scale automation difficult to achieve

•Low stock holding•Long lead times

•Highly competitive•Price and delivery critical•Demand driven – flexiblemanufacturing

•Variety of products

•Variety of finishes ⇒ highly customized

•Labor intensive•Large-scale automation difficult to achieve

•Low stock holding•Long lead times

• Solutions• Implementing ERP system

• Modifying the manufacturing process to create high flexibility

• Moving towards mass customization approach

• Providing a customized service

Key elements to achieve Key elements to achieve

competitive advantagecompetitive advantage

• Improve designing process ⇒ innovative methods such as digital design

• Reduce complexity of product designs ⇒reduce product offering without eliminating different options such as colors and configurations to achieve mass customization

• Cross-functional integration of different areas of the company ⇒ ERP system

• Implementation of Just-in-time in the logistics process ⇒ decrease inventory and improve productivity

Case StudyCase Study

• Research Objectives: Try to improve existed problems, simplify manufacturing process, reengineer original business process and shorten the lead time.

• Sample Company: Herman Miller SQ&A

• Subsidiary specialized on Office Furniture

• Core competences: Innovation and customer service

As Is Design Process

• Mockups , 2D views • Old catalogue & show rooms

Improvement of designing process & Improvement of designing process &

Reduction of complexityReduction of complexity

• Design software 3D view

Improvement of designing process & Improvement of designing process &

Reduction of complexityReduction of complexity• A customer applies for several kinds of designs

which have been well arranged and choreographed.

• More standardized designs with different options (color & configuration)

As is business modelAs is business model

As Is Order As Is Order

Fulfillment Fulfillment

ProcessProcess

Information ModelInformation Model

- Invoice code

Order Information

Invoice

- Name

- Department

- Function

- Address

- Work

Schedule

Human

Resource

Product Style

Material Requirement

Inventory Information

Machine Requirement

Human Resource

Manufacturing due date

Manufacturing

Information- Name- Quantity

- Price

- Color

- Style

Product

Style

Organization ModelOrganization Model

As Is Simulation ParametersAs Is Simulation Parameters

• Initial quantity of objects

(Customer’s request)=

10

• Simulation Time = 2

months

Activity Average Time

Selecting furniture 0.6

Designing 1

Designing Verification 1

Checking Inventory Status 2

Checking Manufacturing Capacity

1

Checking delivery Schedule 1

Verifying Costs 1

Offer confirmation 1

Order Placement 0.25

Manufacturing 7.5

Delivery and Installation 1

Total time (Days) 17.35

As Is Behavior As Is Behavior

ModelModel

-- Order fulfillment Order fulfillment

As Is Result AnalysisAs Is Result Analysis

Activity Flowing objects

Selecting furniture 10

Designing 10

Designing Verification 10

Checking Inventory

Status

7

Checking

Manufacturing Capacity

7

Checking delivery

Schedule

6

Verifying Costs 5

Offer confirmation 4

Order Placement 3

Manufacturing 2

Delivery and

Installation

2

Total time (Days) 81.75

As Is Result AnalysisAs Is Result Analysis

Activity Time * # Objects (t)

As Is Result AnalysisAs Is Result Analysis

1527.5Manufacturing

1472Checking Inventory Status

10101Design Verification

10101Designing

Total# ObjectsAverage timeMost time consuming Activities

AsAs--Is Manufacturing ProcessIs Manufacturing Process

• Main products: bookcases, cabinets,

desks, chairs, tables.

• The flow present in the modular

furniture industries is lineal.

• The manufacturing plant works with

assembly lines, supplied with semi-

finished products and produce

finished modules.

ModularityModularity

• Common components are

used in the design of a

product

• The modules can be

combined in different ways.

AsAs--Is Manufacturing ProcessIs Manufacturing Process

Yes

No

Production schedules based

on product categories (i.e.

chairs, desks) that were

directly to warehouses.

As Is Simulation Parameters As Is Simulation Parameters --

ManufacturingManufacturing

Activity Average Time

Verifying manufacturing order 0.5

Checking availability of materials 1

Ordering materials to suppliers 3

Subassembly 1 0.6

Subassembly 2 0.6

Subassembly 3 0.6

Transportation of materials from warehouse

0.3

Final assembly 0.9

TOTAL TIME (days) 7.5

AsAs--Is Behavior Model Is Behavior Model -- Manufacturing Manufacturing

Process Process

To be business modelTo be business model

ToTo--Be Manufacturing ProcessBe Manufacturing Process

ImprovementsImprovements

• Mass customization approach• The means for achieving customization at mass production costs

• Flexible computer-aided manufacturing systems

• Order-center approach• Just in Time and

• Kanban systems

Modularity(mass

productioncosts)

+ Cosmetic

Customization

Improvements in MImprovements in Manufacturing Processanufacturing Process

Combining Kanban systems and

Just In Time production, one

complete order can be built at a

time.

ToTo--Be Manufacturing ProcessBe Manufacturing Process

Reconfiguration of

Subassembly stages, to

produce one order at a time

To Be Simulation Parameters To Be Simulation Parameters --

ManufacturingManufacturing

Activity Average Time

Verifying manufacturing order 0.2

Checking availability of materials 0.2

Subassembly 1 0.6

Subassembly 2 0.6

Subassembly 3 0.6

Final assembly 0.9

TOTAL TIME (days) 3.1

From 7.5 to 3.1 days

ToTo--Be Manufacturing ProcessBe Manufacturing Process

JIT and Kanban

To Be Order Fulfillment ProcessTo Be Order Fulfillment Process

ERP systemERP system

y

y

y

Job material requirements

and availability

Job status and material

requirements

Inventory availability and

status

Assembly capacity

Job sequencing

Shipping schedules and

installation

JIT material’s flow

FINANCE AND

ACCOUNTING

SALES AND

DISTRIBUTION

MATERIALS

MANAGEMENT

ERP SYSTEM

To Be Order Fulfillment ProcessTo Be Order Fulfillment Process

To Be Behavior Model To Be Behavior Model –– Order Fulfillment Order Fulfillment

processprocess

To Be Simulation ParametersTo Be Simulation Parameters

6.85TOTAL

1Delivery and Installation

3.1Manufacturing0.25Placing order2.0Confirming offer

0.25Verifying order (ERP)

0.25Designing processTime (days)Time (days)Time (days)Time (days)ActivityActivityActivityActivity

TOTOTOTO----BE ModelBE ModelBE ModelBE Model• Initial quantity of objects (Customer’s request)=

10

• Simulation Time = 2

months

To Be Simulation Parameters To Be Simulation Parameters

(comparison)

6.85TOTAL1Delivery and Installation

3.1Manufacturing0.25Placing order2.0Confirming offer

0.25Verifying order (ERP)0.25Designing process

Time (days)Time (days)Time (days)Time (days)ActivityActivityActivityActivityTOTOTOTO----BE ModelBE ModelBE ModelBE Model

To Be Result AnalysisTo Be Result Analysis

Activity Flowing objects

Designing Process 10

Verifying offer (ERP) 10

Confirming offer 10

Placing order 8

Manufacturing 8

Delivering order 8

Total 54

To Be Result AnalysisTo Be Result Analysis

Activity Time * # Objects (t)

ConclusionsConclusions

• A process reengineering is a “must-be-done” task for every company that wants to be competitive.

• Tools such as INCOME 4 can be useful to identify bottlenecks to work on.

• A BPR process can definitely cut down costs and improve customer satisfaction, as shown by the results of our project. (From 17.35 days to fulfill and order to 6.85 days).

• The implementation of an ERP system is critical to improve the flow of information and accelerate the movement of the whole business process.

• Modular manufacturing and JIT systems, combined can be a successful tool to reduce production times, eliminate unnecessary inventories and reach the benefits of a mass customization.