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Align your work tothe businessHow
More Details for our align Methodology refer to the SEI the Business IT Alignment Method (BITAM).
http://www.sei.cmu.edu/news-at-sei/columns/the_architect/2002/2q02/architect-2q02.htm
Share holders dont care about the IT unless it satisfies Increasing operating margins to meet competitive pressure Reinforcing innovation to expand or tap into new markets Complying on schedule with mandatory regulations
A very basic questionFor your ProductThink in the target ERP deployment policiesCentral-in-house license base use all on a license baseDistributed functionality ,with open-license/function-(departmental systems in the 80s)-good availabilitySoftware as a Service (SaaS)-very convenient for SMEs- I recommend it for Egyptian to escape the International competition.Build consortia with Internet-companies.
Two Opposite Align Strategies!!Change the way the company is doing his business! To match our softwareChange the software to match the way business is doingA Third Strategy??
What to Align? Why ERP is complicated?
Why ERP is complicatedData driven is an ITERP is a process driven system&AlignBusinessProductDevelop &
Strategy and KPIsPolicies and ProceduresControls
Remember what is an ERPWhat is an ERP System:A Reporting System-70s?A Central DB System-80s?A Workflow organizer-90s ?
IT IS A SYSTEM TO CREATE REAL_LIFE PLANS THAT CAN BE TRUSTED AND CONTROLLED
Change the way the company is doing his business! To match our software-can we really do it?
You needs a set of skills And experience:General Management ( Strategies and policies)MarketingManufacturing technologyMaterial technologyProduct developmentFinancial managementHR developmentPerformance improvement And measurement
Change the software to match the way business is doingThe magnitude of software maintenance costs to range from 40 to 80 percent of overall software life-cycle costsThe IEEE has estimated the annual cost of software maintenance in the United States to exceed $70 billon(2003)
Our approach= Align IT and Business, HOW?
Alignment needs two structure
We already have two StructuresThis is wrong
Our approach= Align IT and Business, HOW?ConditionsAlignment Must be PlannedAlignment Must Show Enhancements to a Business function or at least in lineAlignment Must Remain Updated as the Business Evolves
The first structure
The IT triangle of needsthe second structurePerformance in key areas(KPIs)Planning tool for the short and medium term operations, and perform what if analysis. Trend reports , and control Data driven:Collects data and generate operation reports and forms, along the workflow functions
StrategicOperation visibilityData transactions, Reports and formsMisalignmentDetection direction
The skill Gap to Align
StrategicOperation visibilityData transactions, Reports and formsAlignment directionThe SkillGAP In Egypt
First source of MisalignmentThe Classical starting pointThe data transaction level to deal with Sales order processingPurchase order processingManufacturing order processingInventory transactionsFinancial transactions
Session-2
Alignment needs two structures
AlignA disciplined approach to show the customer ,how his needs at any level can be coveredYour mapping should start from top-down .or bottom up in case you have a good diagnosis study that covers all inter-level dependenciesAccepting the implementation= accepting the diagnostic study
The IT triangle of needsthe second structurePerformance in key areas(KPIs)Planning tool for the short and medium term operations, and perform what if analysis. Trend reports , and control Data driven:Collects data and generate operation reports and forms, along the workflow functions
StrategicOperation visibilityData transactions, Reports and formsMisalignmentDetection direction
Dependency on the higher levels? You need to control customers deposit inventory (requirement, receiving,consumption),to fulfil customers rules?you need to control inventories releases to sisters companies? You need to control bulk material issues to shop-floor auxiliary stores ? You need to control consumption of bulk material from shop-floor auxiliary storage?Is the amount of data entry of sales orders high to be a Key-area Higher levels should have identified control requirements and key areas of concern
Dependency on the higher levels? Control:A/P transactions (of the same type) from different entities ? Control ;Each entity's ledger can have its own accounting periods opened and closed? Control : Each entity may choose between data collection and real time posting modes
The Visibility layerResponsible to guide the transactions level to secure that policies and control rules are translated intoprocedures that control data transactions
Global conclusion from Visibility levelsThis company business are in the hand ofMarketing and salesR&DResources scheduling
Expected Best result will come from these areas
Align ERP time gates/with businessPutting an order at T1 to be delivered at T1+TWhen &how can industrial details be checked ?When &how can industrial details be changed?When&how inventory record accuracy be checked?When&how can purchased Material be replaced?When&how should final product be produced?When&how should final product be shipped (customer order based, replenishing distribution stores, fixed shares ?When&how should semi-finished be manufactured?When &how can re-do be implemented ( remanufacture, re-deliver to customers)?When&how can we accept changes in sales order or forecast?When&how should money be collected ?When&how should vendor be paid?
Effect on lower levelGeneration of procedures to implement policies and the required controls( Can your product store and force these policies)?.However, policies should have been defined at the upper operation levelMore focus on higher priorities to the customer
Session-3
The IT triangle of needsthe second structurePerformance in key areas(KPIs)Planning tool for the short and medium term operations, and perform what if analysis. Trend reports , and control Data driven:Collects data and generate operation reports and forms, along the workflow functions
StrategicOperation visibilityData transactions, Reports and formsMisalignmentDetection direction
Operation LevelPlanning tool for the short and medium term operations, and perform what if analysis.Define policies,guided by the top level strategy and target KPIs
The ERP must start here and include all lower levels
PoliciesUse the same operation matrix to state the policiesThe visibility level is responsible for the procedures that implement the policies.At the visibility level ERP should store the policies and apply it ( simple example are lot size, economic batch quantity, workshop calendar assignment rules to order types or work-centres or order volumes;CNC; )
What is a plan?Professional MIXStandardproductsOrderSpecificBuildsSolutionAssemblyPlanning
Planning Input Forces?Customer ChangesNew Specifications IntroductionDefine the customer prioritiesMaintenance planningSupplier/PartnerdeliveriesMachine Loading Sequence rulesOperation Managers SkillsDesignKnowledgestorageAvailableTo PromiseControl ofInternal WIPExternalWIPLoad balanceOn Work CentersEconomic ManufacturingBatch QuantityMaterial requiredType and quantity
A Good PlanRealizable i.e., can be implemented within external and internal environmentsMaintainable: measurable ,allows for changes and recovery
In case of manufacturing???
The Nature of the ManufacturingPlanning Process
A plan is a formalization of what is intended to happen at some time in the future, within the top constraints. A plan is a life object that must accommodate changes:
Changes:Externally Forced1-Customers Change their mind-hours2-Suppliers dont deliver on time-days3-Authorities decisions-months4-forced production orders-days5-Customer replacement-days
Internally Generated1-Organization changes-months2-Investments changes-months3-Operations procedures-days4-Process improvement programs-years5-Management decisions- days6-Equipment may fail-hours7-Staff absenteeism-daily
In Manufacturing Every ThingCan change
Handling variables from Real Life
GenerateMPSMPSRunMRPShopFloorPurchaseSalesInventoryWORKOrdersPOCustomersDeliveriesInventory Actions(Picking/additions/Transfers)SalesForecastAccumulatedResources Capacity ChangesException Sales ATPWO dates ChangesMaterial AvailabilityChanges Material AvailabilityChanges Changes in Internal ExpediteResources Capacity ChangesCriticalOnly
No data accuracy=No PlanningSimple example:
Jobbing=ETO
Low accuracy of inventory valuesDistorted BOMAbsence of Alternative BOMNo accurate updateFor material deliveries
The Paradigm Shift__ Making It Happen
A PRACTICAL AGENDA
PREDICTABILITY IS ONLY POSSIBLE IN THE PRESENCE OF PLANNING AND CONTROL
Understand the Nature of planning and control Define uncertaintiesWhat is your Resources StrategyFocus on Top source of changes Focus on Top source of constraintsClearly differentiate between long, medium and short terms. EACH has its own tools and valuesApply the self-control-ModelINTEGRATE, INTEGRATE, INTEGRATE ( will show it in detail in the detailed training) ,
*This is not about bits or bytes of technology, software, communication protocols, or the latest server technology or programming languages. It is about the #2.In order to hopefully spark some innovative ideas for IT applications in your companies, I will present to you and we will discuss together some success stories of IT-driven innovations in a range of different companies: Companies that are considered the old economy companies , those that were born in the industrial and the so called old economy era. Companies that have been 100 or 150 years old. At the other extreme , we will look at the new economy companies and those that were born in the so called the Internet economy and really used the new business models that were enabled by IT, particularly the Internet and the WWW. The likes of E-Bay and Cisco.We will cover a wide variety of industries: the financial industry, retail industry, the high-tech industry and the gaming industry. The idea is that IT-driven innovations are limited to a particular industry or size or type of the companies. The winning idea can come from a variety of sources and take many different forms.