Topics • Strategy • Identifying IT requirements, system selection and implementation • Computer Aided Production Management (CAPM) Systems
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References W • Checkland P.B. (1981), “Systems Theory, Systems Practice”, John Wiley and Sons Ltd. • Cutts G. (1991),” Structured Systems Analysis and Design Methodology”, Blackwell, England, ISBN 0-632-02831-9 • Howe D.R. (1983),”Data Analysis for Database Design”, Edward Arnold ISBN 0-7131-3481-X • Hutchinson G.K. (1975),Introduction to the Use of Activity Cycle Diagrams as a Basis for Systems Decomposition and Simulation, Simuletter 7(1) pp15-23
References (cont.) W • Johnson G. and Scholes (1998), “Exploring Corporate Strategy: Fifth Edition”, Prentice Hall Europe, ISBN 0-13-808739-0 • Monniot J.P., Rhodes D.H., Towill J.G and Waterlow J.G. (1987), Report of a Study of Computer Aided Production Management in UK Batch Manufacturing, Int. J. Op. Prod, Man. 7(2) pp2-57 • Ross D.T. (1977), Structured Analysis (SA): A Language for Communicating Ideas, IEEE Transactions on Software Engineering, Vol. SE3(1)
Strategy • Strategic decisions are concerned with or affect the long-term direction of an organisation • Strategic decisions are about trying to achieve competitive advantage for an organisation • The scope of an organisation determines the boundaries of the business in terms of the type of product, mode of service and geographical spread • Strategic fit is the matching of the activities of an organisation to the environment in which it operates
Strategy (cont) • Strategy can be seen as building on or “stretching” an organisations resources and competencies to create opportunities or to capitalise on them • Strategies may require major resource changes e.g. need for capital, balance of resources needed • Strategic decisions affect operational decisions.
Levels of Strategy • Corporate strategy, concerned with the overall purpose and scope of an organisation to meet the expectations of owners and major stakeholders and to add value to the different parts of the enterprise • Strategic Business Unit is a part of the organisation for which there is a distinct external market • Business unit strategy how to compete successfully in a particular market • Operational strategy concerned with how the component parts of the organisation deliver the business and corporate level strategic direction
In this context, Manufacturing Strategy and Information Technology Strategy are operational strategies.Information Technology can be seen as infrastructure that supports the various operational strategies within the organisation.In these lectures, we will focus particularly on how IT can support manufacturing strategy
Identifying IT requirements, selecting systems and IT implementation
Assumptions • Competitive criteria are known and understood in terms of qualifying, order winning and losing criteria. Remember profile analysis? • Basis of competition is known e.g. product excellence, operational excellence, customer intimacy • Manufacturing strategy is determined in terms of make/buy, processes, technology, focus and organisation. • IT support and infrastructure is to be reviewed.
Feasibility Study • Ensure commitment from top management • Planning phase • Estimate required budgets • Produce programme plan • Identify milestones • Estimate manpower requirements • Define management input • Identify key decision points • Estimate required contact with staff • Do not be optimistic, things will often take longer than expected and be more expensive! • Confirm management commitment
Managing the Process • Identify project leader • Champion responsible for “selling” project • Managing budget • Monitoring and controlling progress • Reporting to management • Identify business process improvement teams (representing the various business processes). • Organise management and reporting structures for teams
Identifying IT Requirements Steps: • Understand existing systems • Model existing systems • Redefine systems to streamline them and ensure that they support operational, business and corporate strategies • Produce models of proposed system • Develop a Functional Specification that defines requirements
Selecting systems and IT implementation • Select a package that satisfies Functional Specification • Purchase package • Implement package • Identify training requirements for all staff • Develop training material and training plans • Carefully manage change over to new system • Develop operational procedures to ensure successful continued operation
Understand Existing System • Meetings with business process improvement teams • Identify information flows through organisation • Identify role / purpose / objectives of business processes / job functions • Identify information requirements of each job function in terms of data inputs, data outputs and reporting requirements • Identify way in which data is processed and decisions are made
Understand Existing System (cont.) • Identify which decisions are totally delegated and those that require authorisation • Identify appropriate measures of performance associated with each business process / job function • Confirm with business process improvement teams.
Modelling Systems • Process maps to define data flow • Functional model - decomposes a complex system using a hierarchical top down approach - provides a means of understanding activities and their inter-relationships • Information model - enables the structure of information required to be understood • Dynamic model - shows changing behaviour over time
W Process Map Examples
Common Methodologies • Functional model • Structured Systems Analysis and Design Methodology (Cutts 1991) • SADT (Ross 1977), IDEF0, .... • Information View • Entity- relationship diagrams (Howe 1983),IDEF1 • Dynamic view* • Activity cycle diagram (Hutchinson 1975), IDEF2 *Mainly used in simulation
W Structured Systems Analysis and Design Methodology (SSADM) Examples
Other Functional Modelling Methods • SSADM • GRAI • Checkland “soft systems models” provides a way of seeing patterns in diffuse problems and allows different views to be represented
Entity-Relationship Modelling • Describes data structures for database systems • An entity is an object which one wants to describe in terms of data • An entitytype describes some class of object • An instance describes particular objects. Example: A payroll system may use an entity type EMPLOYEE, with each particular person being an instance of that type.
Relationships • Different entities will have relationships between them • For example in manufacturing there would be people and machines. The relationship may define which people are capable of operating which machines. • Relationships are also defined in terms of type and instances
Attributes • Entities and relationships have attributes Example: Employees have the attributes: • Name • Address • National insurance number • Date of birth • Sex • Salary etc. Relationships also have attributes
Primary and secondary keys • The primary key is an attribute that uniquely identifies a particular instance of an entity • A secondary key is some combination of attributes that uniquely define a particular instance of an entity
Entity-Relationship Diagram W MACHINE EMPLOYEE Works on Primary key 1 Primary key 2 Primary key 1 m n Other Other Primary key 2 attributes attributes Other attributes
Redefine Systems • Produce process maps that define streamlined systems • Produce functional models that define relationships between subsystems in proposed system • Produce data models that define data structures for proposed system. Care should be taken to: • Eliminate redundant processes • Eliminate redundant data
Develop Functional Specification Describe system requirements • Process maps • Functional models • Data models • Description of processes to be supported • Required reports • Description of job functions under new system • Required performance indicators • Security • Volume of data
Commercial Issues • Size, turnover, liquidity, profitability of software vendor • Package cost and maintenance • Purchase / lease arrangements • Stage payments • Support arrangements • Software / hardware updates • In-house / bought in analysis, implementation and training support • Trade / bank (beware) references • Trading Period
Technical Issues • Platform PC / Workstation / mainframe • Operating systems • Networking Ethernet / token ring • Data storage requirements • Data processing requirements • Backup • Security • Ability to customise • Standard database / bespoke? • Internet / intranet / Email?
Select Package • Listing of available packages in Computer Users Yearbook • Identify packages that appear to have required functionality / features • Obtain annual reports for commercial analysis • Postal / telephone survey • Generate spreadsheet • Get vendors to demonstrate packages using your data • Visit test sites with similar requirements • Visit software company
Purchase Package • Specify requirements as clearly as possible - many software houses aim to make money on “extras” • Make payment in stages • Clearly identify responsibilities • Do not scrimp on training
Implement Package • Training and involvement is key • Make sure the people who use the system feel they own it • Ensure staff have plenty of time to learn new system • During implementation frequently check the validity of data and identify further training requirements • Keep backup system during implementation Approaches: • Implement in stages e.g business by business or process by process • “Big bang” - avoid if possible
Making it a Success • Try to satisfy user requirements if it is not possible explain why - it should be their system • Ensure that the data model is correct • Continually measure system performance • Be prepared to make changes. • Ensure that the system is stable
Computer Aided Production Management Systems • “All computer aids supplied to the production manager” (Monniot et al 1987) • Main information processing activities • specification of tasks • planning and control • recording and reporting • Information systems • transaction processing • management information • automated decision making
CAPM System Integration • Technical integration • Information integration • Strategic integration • Functional integration
5 Levels of CAPM Integration • No CAPM • No integration • Partial integration • Full integration • Full integration of manufacturing systems
Prerequisites for Success • Data accuracy • Real time data • Shared data • Networked systems