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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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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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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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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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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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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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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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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
grat
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of
tool
s an
d te
chni
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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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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
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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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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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