Enterprise Engineering by pengxuebo

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									     Enterprise Performance Management
                 Methodology




 Enterprise Engineering
       Larry Whitman
       whitman@imfge.twsu.edu
       (316) 691-5907
       (316) fax



   Industrial & Manufacturing Enterprise Department
   The Wichita State University
   http://www.mrc.twsu.edu/enteng


Enterprise Engineering
  Research Problem
   Justification of CIM/CIE
   not just economic
   need to consider cultural and
    organizational issues




Enterprise Engineering
Strategic Justification of Enterprise Technologies

   Developed by the Automation & Robotics
    Research Institute under funding from the
    National Center for Manufacturing Sciences
   A methodology for the strategic justification of
    investments in integrated enterprise technology
       Focuses on justification of technology and other
        innovations having pervasive enterprise-wide
        impact
       Integrates traditional and strategic analyses
       Considers both quantitative and qualitative
        benefits
       Incorporates both tangible and intangible impacts




Enterprise Engineering
  Enterprise Performance Management
  Methodology
     - extension of SJET tool to include post implementation audit and
      tracking




Enterprise Engineering
  Justification Issues

     High Capital Costs and Risks
     Myopic Approaches to Justification
     Inappropriate Capital Budgeting Procedures
     The Quantification Dilemma
     Long-term Benefit Prediction
     Technological Uncertainties
     Inadequacies of Costing Methods
     Differing Nature of Operations
     Analysis Based on Subsystems and Suboptimization




Enterprise Engineering
  Tool Requirements
   be strategic and consider financial aspects
   integrative vertically and horizontally
   consider resource availability of small/ medium
    enterprises
   serve dual purpose of learning device
   be flexible (diversity of enterprises and location on
    implementation path)
   require minimal training/ service/ ...etc.




Enterprise Engineering
     SJET Research Approach Approach
State of the Art
Literature Review
                                              Design
                                              Requirements
                    Customer                                 Part
                    Requirements                             Characteristics

                                   Product
                                   Planning
                      QFD          Matrix            Part
                      Analysis                       Deployment
                                                     Matrix




                                                              IDEF0
                                                              Specification
                                                                                                    SJET



                                                                               Workbook and
                                                                               Computerized
                                                                               Decision Support System




  Enterprise Engineering
  Development
   QFD House I
       Initial set of 259 customer requirements were
        consolidated into 52
       Relative importance rankings were established for
        these requirements using AHP
       63 design requirements were developed
   QFD House II
       Design requirements were categorized as
        methodology and tool requirements
       House II was separated into 2 houses - one for
        methodology, one for tool
       Parts requirements were established for each house




Enterprise Engineering
  Development
  Methodology Development
      ARRI Development Team developed IDEF "kits"
       for methodology
      Kits were circulated to rest of Development Team
       for review (Author-Reader Cycle)
  Workbook Development
      IDEF Specification was translated into workbook
        delivery tool containing
          5 Phases (62 steps) with examples
          A running tutorial example
          Glossary, Bibliography and Suggested Reading
          Forms and Templates




Enterprise Engineering
   SJET Methodology

Identify System
    Impact                                      A Comprehensive
                                                   Approach
             Identify Transition
                   Impact

                           Estimate Costs and
                                Benefits

                                        Perform Decision
                                            Analysis

      Integrates                                    Audit Decision
Financial and Strategic
    Considerations




Enterprise Engineering
   SJET Methodology
  Vision, Strategies,     C1 C2 Decision
  Objectives, & Plans           Constraints


                                                               Decision & Audit Feedback
 IET System                                   Analysis Plan
 Configuration/Data
       I2
                            Identify
                            System                                                                                                 Decision
      I1
                            Impact                                                                                                 Feedback
Needs/Requirements                 A1
Analysis                                                                    Analysis Plan
                                   Analysis Matrix      Identify
                                                       Transition
           I4                                           Impact
     Transition Plan/Data
                                                               A2
                                                                     Analysis
                                                                     Matrix
                                                                                  Estimate                                                           Audit
                                                                                  Costs and                                                          Feedback
                                                    I3                            Benefits
                                                  Operational/Market Data
                                                                                              A3
                                                     MIRC
                                                                                                                                                         Decision
                                                                                                                 Perform
                                                                                                                 Decision                           Transition Plan
                                                                                                                                                                    O2
                                                                                                                 Analysis                           Documentation
                                                                                            Estimated Costs                                                         O4
                                                                                                                         A4
                                                                                            & Benefits
                                                                                            (Populated Matrix)

                                                                                                                                         Audit
                                                                                       Actual Decision Results
                                                                                                                                        Decision                O3
                                                                                                                                                      Decision Audit
                         M3                                                                                                                    A5
                 NCMS Enterprise
                 Model /MIRC

                                                                                                                      M2
                                 M1
                                                                                                           Decision Models/Tools
                      Analysis Team/Decision Maker




Enterprise Engineering
  SJET Methodology
   Designed to support middle to upper level
    managers
   Uses activity based approach
   Promotes team-based analysis
   Includes a mechanism for comparison of
    alternatives
   Provides for the relative importance weighting of
    strategies and metrics
   Uses the concept of utility functions




Enterprise Engineering
   SJET Process



     FORMS               LINKAGE MATRICES                 ANALYSIS MATRICES
Vision                Strategies to Objectives            Traditional Analysis
Objectives            Strategies to Attributes            Cash Flow Analysis
Strategies            Strategies to Traditional Metrics   Strategic Analysis
Needs                 Strategies to Strategic Metrics     Alternative Comparison
Requirements          Activities to Components
Attributes
Components
Strategic Metrics
Traditional Metrics
Activities
Cost Categories
Assumptions
Constraints




Enterprise Engineering
  Forms
               Form                Content
               Vision              High level statement of future state enterprise desires
                                   to achieve.
               Objectives          Broadly defined long term results desired by
                                   management
               Strategies          The integrated means by which an enterprise will meet
                                   its objectives.
               Needs               Higher level business needs that the system is to
                                   satisfy. Needs are shortcomings or weaknesses of
                                   current processes and denote what should be done.
               Requirements        Actual performance criteria the system is to meet.
                                   Requirements define how an system will fulfill defined
                                   needs.
               Attributes          Characteristics of the system which are difficult to tie to
                                   specific components of system but which relate to
                                   company strategies.
               Components          Physical and logical breakdown of the system.
               Strategic Metrics   Metrics to be used in the strategic (integrative) analysis.
                                   Strategic metrics fall into one of three categories:
                                   Financial Quantitative, Quantitative, and Qualitative.
               Traditional         Metrics which will be used in the traditional (financial)
               Metrics             analysis. These metrics will assist in defining the
                                   savings of performing enterprise activities.
               Activities          Activities performed by the business to accomplish its
                                   business goals. Identified independently of performing
                                   functions or organization.
               Cost Categories     The components making up the cost of performing
                                   enterprise activities. Examples include labor, materials,
                                   etc.




Enterprise Engineering
  Matrices
            Matrix                        Purpose
            Strategies to Objectives      Used to determine how strategies support objectives.
            Matrix                        Helps the team gain an understanding of the
                                          company's strategic plan.
            Activities to Components      Used to link activities to components and to choose
            Matrix                        the activities and components to be used in the
                                          analysis
            Strategies to Attributes      Used to link strategies to attributes and to choose the
            Matrix                        attributes to be used in the analysis.
            Strategies to Traditional     Used to link strategies to traditional metrics and to
            Metrics Matrix                choose the traditional metrics which will be used in
                                          the Traditional Analysis Matrix
            Strategies to Strategic       Used to link strategies to strategic metrics..
            Metrics Matrix
            Traditional Analysis Matrix   Used to determine the economic impact on the
                                          activities of the enterprise. These is one matrix for
                                          each year of the analysis.
            Cash Flow Analysis Matrix     Used to calculate the annual cash flows for the
                                          alternative
            Strategic Analysis Matrix     Used to perform the strategic analysis portion of the
                                          analysis
            Alternatives Comparison       Used to compare the scores of different alternatives.
            Matrix




Enterprise Engineering
  Strategies to Objectives Matrix


        Alternative 1                                       Objectives




                                                                        Shipping Errors
                                Assumptions

                                              Constraints




                                                                                                Employees
                                                             Delivery




                                                                                          JIT
        Strategies




                                                                                                            ...
        BPE / CQI               û             û              û          û                 û     û
        Cellular Processes      û             û              û                            û     û
        Communications          û                            û
        Corporate Culture       û                            û          û                       û
        Financial Performance   û
        ...




Enterprise Engineering
  Types of Strategic Metrics
   Financial Quantitative

   Quantitative

   Qualitative




Enterprise Engineering
  Traditional Analysis Matrix

                                                                                          Financial             Quantitative Qualitative




                                                                                                                  % Customer Queries Answered




                                                                                                                                                              Better Communications

                                                                                                                                                                                      Better Information
                                                                        Strategy Weight




                                                                                                                                                Reduced WIP
                                           Assumptions

                                                         Constraints




                                                                                                      Payback
                                                                                            NPV
         Strategies
         BPE / CQI                         û                           0.2                                       0.1                            0.3           0.3                     0.3
         Cellular Processes                              û             0.1                                                                      0.5           0.3                     0.2
         Communications                                                0.1                                       0.2                                          0.5                     0.3
         Corporate Culture                 û             û             0.1                                       0.4                                          0.3                     0.3
         Financial Performance                       0.5                                   0.8   0.2
                                 Strategic Metric Weight                                  0.400 0.100 0.080 0.110 0.170 0.140
                                                  Target                                  >= 0    0    100    0     5     5
                                                   Upper                                  100K 3       100 1000     5     5
                                                  Lower                                     0     0     75    0     0     0
                                                    Type                                    I     D      I    D     I     I




Enterprise Engineering
  Strategic Analysis Matrix

  Alternative 1 / Year 1                                      Components                                                                      Metrics                                                                      Cost/Savings Categories




                                                                                                           Data Collection/Monitoring
                                                              Order Review/Release
                                                                                     Detailed Assignment




                                                                                                                                                                                 Reduced Lead Time
                                                                                                                                                            Reduced Expediting




                                                                                                                                                                                                                                                                                             Activity Total
                                                                                                                                              Reduced WIP




                                                                                                                                                                                                     Training Time




                                                                                                                                                                                                                                                                           Infrastructure
                                  Assumptions
                                                Constraints




                                                                                                                                                                                                                                      Materials




                                                                                                                                                                                                                                                             Facilities
                                                                                                                                                                                                                                                   Travel
                                                                                                                                                                                                                             Labor
  Activities




                                                                                                                                        ...




                                                                                                                                                                                                                     ...
  Manage Cost Accounting                                      û                                                                                                                                      û                      $3.6     $1.8                                                   $5.4
  Secure/Accept/Manage Orders                                 û                        û                     û                                û             û                    û                   û                     $28.7                  $17.0      $.5          $7.0              $53.2
  Schedule Shop Floor                                         û                        û                     û                                û             û                    û                   û                     $13.0     $.5                                  -$1.1             $12.4
  Review/Release Orders                         û             û                                                                               û             û                    û                   û                      $8.2     $.4                                                    $8.6
  Supervise Shop Floor                                        û                        û                     û                                û             û                    û                   û                     $16.0                                          -$.4              $15.6
  Do Work                                                     û                        û                     û                                û             û                    û                   û                     $55.0     $3.0                   $12.0         $3.0              $73.0
  Collect Data/Monitor Progress   û                                                                          û                                              û                                        û                      $9.6     $.4                     $2.0                           $12.0
  Perform Control Actions                                                                                    û                                              û                                        û                     $18.8                                                            $18.8
  Process Order Completion                      û             û                                                                                             û                                        û                      $6.8                            $4.0          $3.6              $14.4

                                                                                                                                                                                                                                                                                            $213.4




Enterprise Engineering
  Alternatives Comparison Matrix

      Alternative 1                                              Strategic AttributesUtility Functions                                                                                            Values                                 Calculations




                                                                                                                                                                                                                                                     Strategic Metric Total
                                                                 Support JIT & Cellular




                                                                                                                                                                                                                      Normalized Value
                                                                                                                                                                                                   Observed Value
                                                                                                                                                                                 Type (I, D, P)
                                                                                                                      Dependability
                                                                                                                                      Expandability
                                     Assumptions
                                                   Constraints




                                                                                                        Information
                                                                                          Integration




                                                                                                                                                                                                                                           Weight
                                                                                                                                                       Target


                                                                                                                                                                 Upper


                                                                                                                                                                         Lower
       Metrics
     Financial Quantitative
       NPV                           û                           û                        û             û             û               û               >= 0 100K          0        I               80k                  4                  0.40      1.6
       Payback                       û             û             û                        û             û             û               û                0     3           0        D               1.64                 2                  0.10      0.2
     Quantitative
       % Customer Queries Answered   û                             û                      û             û             û                               100       100      75       I                93                  4                  0.08      0.32
       Reduced WIP                   û                             û                                    û                                              0        1000     0        D               325                  3                  0.11      0.33
     Qualitative
       Better Communications         û             û             û                        û             û             û               û                5         5       0            I             4                  4                  0.17      0.68
       Better Information            û                                                    û             û             û               û                5         5       0            I             5                  5                  0.14      0.7
                                                                                                                                                                                                                                                      0
                                                                                                                                                                                                                    Total                           3.83




Enterprise Engineering
  Deployment
   IDEF0 - Used as Specification

   Translated well into workbook

   Activity model used to develop metrics




Enterprise Engineering
  Why do I care?
   Justification - more than just Engr Econ

   Another use of IDEF0




Enterprise Engineering
  IE880I - Topics
 IE880I - Final Exam
 Extra Credit Option
    One-Two page summaries of five articles
    Worth 10 points on any exam (You made a 90 on an exam, you
     do the five articles and I like your summaries, you get credited
     for a 100 on the exam.)
    Only for ONE exam (you can do it for the final if you want!)




Enterprise Engineering
  Paper

  Order
      Title page, abstract, intro, body, conclusion, bib/ref,
        app (IDEF0 model - check syntax!), copies of papers,
        previous markups
  Figure captions and numbers below figure
  Explain figure in text
  Requirements - at least two papers I have not seen
   and turn in copies of those papers. (be sure they
   are in endnote)
  Save on IE880I directory and give paper copy.
  Turn in borrowed materials - (or no grade!!)



Enterprise Engineering
  Paper

    Use page numbers - 1,2,3,etc.
    Abstract <150 words - what’s the big idea???
    Format bib/ref consistently
    Bib/Ref - use journal first, then conf, then web.
    Look at other papers (SJET paper)
    No lists (few) WRITE!!!
    Spelling/grammar
    If you don’t understand something - don’t write
     about it!!!!!




Enterprise Engineering
  Paper suggestions
   Give it to a friend and they ask “what does this
    mean?” If they can’t answer, then rewrite!!!
   Do not impress me! Make it so your friend
    understands it. If they don’t understand it, remove
    it!!!
   Do I understand what the paper says?”
   10 minute review - 48 hour turnaround
   Don’t kill yourself!!!




Enterprise Engineering
  Plagiarism
   If it is not your words (if you copy word for word)
    must be in quotes with ref at the end.
   If it is mostly from one or two papers, you need to
    put the ref at the end.
   If I find ONE place of plagiarism, the paper gets a
    zero
   You have one week to fix it, if I find another place
    with plagiarism, you still get a zero, if not your
    score is half what it would have been.




Enterprise Engineering

								
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