IPPTF 2007 Saint Petersburg October 10 SOA for profit in the Pulp & Paper business Per Björkegren – Sogeti

Page 2IPPTF - SOA for profit in Pulp & Paper 2007-10-10

Welcome to this short journey

into SOAand its potential for the Pulp

& Paper industry

http://www.paperprovince.com/cgi-bin/webbverktyg2/ak_webbpub-s.cgi?CID=Intra&Sprak_ID=sv&funk=TPP_Start




IT strategistBusiness developerEnterprise ArchitectResearch principal

From Karlstad in Sweden

Working for

which is a service linewithin group

The largest consulting firmowned in Europe (France)

Formally appointed to the research institutein Netherlands

Per Björkegren





My grandmothers grandfather came from Russia

Ö:a Ämtervik





The ancestors on my fathers side came from Vallonia

Sunnemo

Ö:a Ämtervik





These movements created the industry in Wermland

Sunnemo

Ö:a Ämtervik





The paper industry in Wermland and its neighborhoods lately

became what is called the Paper Province

50 years ago there were more than 50 Pulp & Paper mills in this area

Today there are quite a few mills left. Instead Europes largest cluster of companies around Pulp and Paper has emerged..





OK, back on to the trail..

SOA.. Service Oriented

Architectureis todays way of implementing

Enterprise Architecture





How many have heard about SOA?

HANDS UP!





OK, back on to the trail..

SOA, Service Oriented

Architectureis todays way of implementing

Enterprise Architecture





Enterprise Architecture is a mechanism that helps you realise a business strategy

Todayssituation

Next

Next

NextNext

Next

Vision

ARCHITECTURE

ARCHITECTUREGUIDES YOUTOWARDS THEVISION





- ”A company can outperform rivals

only if it can establish a

difference that it can preserve”

The overall driving strategy

And what is the strategy to any company?

Michael Porter 1994

It is about differentiation!





What creates differentiation?

FLEXIBILITYAGILITY

EFFICIENCYTowards a real-time business





We are living in an ever-changing world .. Growth in AsiaGrowth in Asia Extended EUExtended EU Extended/Changed Extended/Changed regulationsregulations 24/7 government24/7 government 11th September11th September Sarbanes-Oxley act Sarbanes-Oxley act Iraq war Iraq war Storms in southern SwedenStorms in southern Sweden Energy marketEnergy market Earthquakes in PakistanEarthquakes in Pakistan Birds influenzaBirds influenza Floods in New OrleansFloods in New Orleans....

Growth Cost chasing Quarter’s economy Mergers & Acquisitions Partnership & Alliances Shared services Outsourcing New business models

.. The world seems to be more and more instable.. Change is even more the general condition

EXTERNAL FORCES INTERNAL FORCES





IT has evolved into a complex

structure





“Todays IT-structures, as hard as they are to understand,

are the perceived far most biggest hindrance many organisations face when they try to plan and perform strategic movements”

McKinsey “Flexible IT, Better Strategy”, John Seely Brown & John Hagel IIIBased on more than 1000 CEO interviews

Some even avoid to do necessary changes due to this complexity

MORE THAN 1000 CEO’s SAID:





Put it together with the heavy technology push..

Technology Push

I T has evolved into a complex

structure

The need for continous change is here to stay.. Growth in AsiaGrowth in Asia Extended EUExtended EU Extended/Changed regulationsExtended/Changed regulations 24/7 government24/7 government 11th September11th September SarbanesSarbanes--Oxley act Oxley act Iraq war Iraq war Storms in southern SwedenStorms in southern Sweden Energy marketEnergy market Earthquakes in PakistanEarthquakes in Pakistan Birds influenzaBirds influenza Floods in New OrleansFloods in New Orleans....

Growth Cost chasing Quarter’s economy Mergers & Acquisitions Partnership & Alliances Sharedservices Outsourcing New business models

.. The world seemsto be more and more instable.. Change is evenmore the general condition

ENVIRONMENT INTERNAL STRUCTURE

S O A ³Hokus pokus,

here’s the hype!





MaintainManufacturing

plants

ProcureRaw material

Manage Ledgers

PlanMill production

Make Paperboard

RefinePaperboard

ProcessSales orders

Distributeproducts

SecureCash

ManageCustomerRelations

QualityManagement

AnalyzeMarket

Manage Warehouses

ControlCorporate

KPI:s

ConsolidateFinances

Plan deliveries

Develop Products

Plan LogisticsCapacity

Manage EnvironmentalIssue

s

CreateBusiness

CRM

CustomerMaster

OrderEntry

MarketStock

BillingClose

Delivery

Delivery Monitoring / Control

Plan Operations

Make Paper

Convert Paper

WarehouseManagem.

ExecuteTransport

Plan Transport

WarehouseManagem.

ReceiveGoods

Mill responsibility

What is SOA for a Pulp & Paper business?

FIRST You need to look at your business

with new glasses..





Well, a new way of modelling your business

is needed to enable flexibility and agility..

SOA has to start from a well defined business model

What do I mean?





Don’t set detailed processes as guiding architecture

Define business capabilities!!

Viewstock

Updateplan

Registerorder

Allocatecapacity

Recieveparameters

Optimiseproduction

Registerprospect

Recieveparameters

Controlprocess

Controlprocess

Dispatchgoods

Transportgoods

Un-loadgoods

Store goods

Prepareloading

Load goods

Confirmdispatch

SendInvoice

ControlAPL

The capabilities are the things you DO in your business





MaintainManufacturing

plants

Make Pulp

Manage Ledgers

PlanMill production

Make Paper

RefinePaper

ProcessSales orders

Distributeproducts

SecureCash

ManageCustomerRelations

ManageQuality

AnalyzeMarket

Manage Warehouses

ControlCorporate

KPI:s

ConsolidateFinances

Plan deliveries

Develop Products

Plan LogisticsCapacity

Manage Environmental

Issues

CreateBusiness

Structure the capabilities into

relevant domains!





Warehouse Management

GoodsIn

Move goods

Pack goods

StockInventory

GoodsOut

Repairgoods

Information Interface

Receiveadvice

ReportGoods move

ReportGoods received

Cross-dock

Handlepallets

ReportInventory

RecieveInstruction

Physical goods Interface

Road Loading dock Railroad Loading dock

A domain is described with capabilities and information

flows in and out





If this is done right, you have a

Reference model that can support

guidance in your strategic

journey





SOA Principle:

Secure that your information

systems follow the domain

demarcations





SOA Principle:

Secure that the information

interfaces are created according

to the model





If you follow these principles, the new IT structure will enable you to set up almost

any business scenario





The domains are high-level building blocks for business processes

OrderEntry Billing

CloseDelivery

OperationsPlanning

PaperProduction

PaperConverting

TransportManageme

nt

TransportOperations

WarehouseManageme

nt

SalesManageme

nt

OrderEntry

WarehouseManageme

nt

TransportOperations

Scenario 1 – Stock order

CloseDelivery

Operations

Planning

PaperProductio

n

TransportManageme

nt

OrderEntry

WarehouseManageme

nt

OrderEntry

WarehouseManageme

nt

Scenario 2 – Converting order

CloseDelivery

Scenario 3 – Production order

PaperConverting

WarehouseManageme

nt

TransportOperations

OperationsPlanning

PaperConvertin

g

WarehouseManageme

nt

TransportManageme

nt

CloseDelivery

TransportOperation

s

TransportManageme

nt

A simple setup ofdomains





OrderEntry

WarehouseManageme

nt

CloseDelivery

PaperConverting

WarehouseManageme

nt

TransportOperations

OperationsPlanning

TransportManageme

nt

External Warehouse provider

External Transport provider

The same interfaces shall be used to all domains whether they are internal or external

Internal activities

The domains also make it easier to handle extended enterprise

scenarios





The information interfaces are key..

Information Interface

Receiveadvice

ReportGoods move

ReportGoods received

ReportInventory

RecieveInstruction

To standardise the information

interfaces to each domain will create

magic!

This is SOA at the core!





The domains can be used to describe business units configuration

A typical sales company

OrderEntry

BillingClose

Delivery

SalesManageme

nt

A typical converting unit

WarehouseManageme

nt

PaperConverting

TransportManageme

nt

OperationsPlanning

Finance HR

Finance HR

A typical production unit

WarehouseManageme

nt

PaperConverting

TransportManageme

nt

OperationsPlanning

Finance HR

PaperProduction

Plant Maintenanc

e

SupplyPurchasing

PulpProduction





We have now looked into SOA

from the business level and how it can provide the needed business

agility





There are other benefits to gain:

- More cost efficient IT in a longer term

- Better use of data in a more real-time style





I strongly believe that SOA has a huge potential

for the Pulp and Paper industry





I then mean the SOA that starts on the business level,

NOT the SOA that is presented by many vendors as a new

technology





So, let’s start to re-think your business

modelsAND secure that

Informations System are built according to

them





If you want to know more, don’t hesitate

to contact me!I brought 10 copies of the book

The book is also available free in PDF-format on the net

http://blogg.sogeti.se/soa





THANK YOU!

SOA isfor profit!




Documents

IPPTF 2007 Saint Petersburg October 10 SOA for profit in the Pulp & Paper business Per Björkegren – Sogeti