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g Assessing the impact of e-business in business

processes :

a simulation approach

Pável Albores

Peter D. Ball

Jillian MacBryde

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Agenda

Research Need Project Aims/Plan Project Elements Project Framework Pilot Case Study Conclusions and Future Work

        

  

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© Pavel Albores 2002 RPD 24 January 2002

E-business involvement by

sector

0% 20% 40% 60% 80% 100%

Manufacturing

Financial Services

Professional / Consulting

Retail

Telecom/Utilities

Transportation

Travel/Tourism

Pioneer Follower Laggard

Source: Farish 2001,Engineering

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Drivers and issues of e-business

Key business drivers for e-business

Key issues in developing an e-business strategy

Source: PMP Conspectus Dec 2001

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Research Need

Reduce uncertainty of e-business implementation in manufacturing companies

Need to understand the dynamics of processes and their interaction

Evaluate the real benefit of e-business

Speed-up adoption of e-business

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Project aims

To investigate the suitability of simulation as a technique to analyse the effects that e-business has on the business processes of manufacturing companies.

To develop e-business templates of different e-business scenarios in the manufacturing sector.

To develop the methodology for the use of these tools and techniques.

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Project plan First Year

Literature Review Gap analysis Software analysis Pilot Study

Second Year Theoretical Templates development Validation of the templates (Case Studies) Analysis of the data obtained from the Case

Studies Third Year

Review of Templates Formalisation of implementation

methodology Thesis writing

        

  

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Contributions

Use of simulation in a new context

e-process templates Methods and procedures for

integration of tools and techniques

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Project Elements E-business

Demand is erratic and difficult to predict Last-second orders and expectation of overnight fulfilment

Internet as a complement to, not a cannibal of, traditional ways of competing

Business Processes ModellingWell established methodologyCIMOSA BP model: Operate, Manage and Support

Simulation work in BPR

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Project Elements Simulation

•Mimics the behaviour of a real system, generally with a computer and appropriate software

•Decision support tool (“What-if” Scenarios)

•Applications: Design, optimisation, training, risk reduction

•Allows the study of the system under specific conditions.

•Has the ability to model the behaviour of a system as time progress.

        

  

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E-business Scenarios Traditional Business Processes

Simulation

Visualisation of dynamic interactionsEffect on internal resources- People, MachinesEffect on external resources- Suppliers, subcontractors, distributorsPlanning and control implications

Confident adoption of e-business strategies

B2B

B2C

DTO

MTO

MTS

e- business process templates BusinessPerformance MeasuresStrategic PrioritiesStrategic Options

e-FACTORY FRAMEWORK

Met

hods

and

Pro

cedu

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for

inte

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of

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© Pavel Albores 2002 RPD 24 January 2002

Pilot Case Study Highland Spring. Leading UK water bottling company Approx. 250 employees ERP system in place Order processing

Telephone Fax EDI Process of interest: Purchase order for

haulier

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Process Map Comparison of current process

Vs e-enabled process

        

  

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Conclusions

A methodology to adopt e-business is required

Strategic and operational considerations should be addressed by the models.

Simulation has been applied to BPR efforts, reducing the uncertainty of implementation. Can it be applied to e-business?

Eureka

        

  

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Future Work

Theoretical templates development Case Studies Data analysis Validation/Review of templates Simulation workshop / Tools

comparison

        

  

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Questions?

Pavel Albores

pavel.albores@strath.ac.uk

http://www.dmem.strath.ac.uk/csm/pavel

        

  

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Research Approach Research Methodology

Case Study Action Research

Modelling methodology Simulation (General purpose tool) Interviews ERP system data

        

  

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E-process templates

        

  

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© Pavel Albores 2002 RPD 24 January 2002

POH Experiment Results

Average of 10 iterations of 1 month, considering 8 hours shifts.

Cost base £30/hour salary

Current e-process

Units processed 2052 2052

Units remaining in system 54.4 36

Processing time /unit 272 min 215 min

Staff Utilisation (POH) 77.66% 17.90%

Cost/unit £ 4.58 £ 2.9

Cost/month £ 8755 £ 5650

        

  

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Project ScopeOPERATE PROCESSES

Develop Product

Generate Order

Fulfil Order

Support Product

Electronic Commerce impact

Integrated approach needed: E-business + Simulation

Current Simulation research

        

  

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Evaluated Simulation Tools

General Purpose Arena Witness Simul8 Extend ServiceModel Ithink

Business process Work Flow

Modeler Simprocess Process Charter Igrafx Processmodel Showflow

        

  

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© Pavel Albores 2002 RPD 24 January 2002

Performance Measurement

“...is the process of quantifying purposeful action where the process of quantification is measurement and purposeful action equates with performance”. Neely et al (1996)

Quantification and comparison simulation model.

Finding the "purposeful actions" business process management.

        

  

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Process Map