Enterprise Service Computing From Concept to Deployment_13 docx

372 Sabri Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis- sion of Idea Group Inc. is prohibited. real time to minimize the impact of disruptions on the supply chain, which means cost-effective, speedy, reliable, and almost-error-free SC activities. The automation of critical (core competency) business processes should be done after improving the as-is process by eliminating nonvalue activities, simplifying and streamlining processes, and removing barriers (disconnects) between processes or functions. This means the automation should be done for the redesigned modi- ed to-be process, and the software needs to be customized to follow and support the process to maintain the competitive advantage. On the other hand, automating noncore competency processes can be done by either using out-of-the-box work ows provided by software companies by which such processes are changed ac- cordingly (no value in tailoring the software to t the process), or by outsourcing the management of these processes to a third party. A good example of work-ow automation is the application of electronic exchange portals in the area of procurement, such as Covisint for the automobile industry, e2open for the electronics industry, and Transora for the grocery industry. Level 3: Integrated SC Planning The integrated-SC-planning level allows companies to respond quickly and effec- tively to unplanned supply and demand events that may disrupt information and material ow in the supply chain as one unit. It allows a company to plan based on real-time execution data, and execute based on an up-to-date plan. Integrated SC planning provides a process-centric view coordinating different business subprocesses like product introduction, forecasting, replenishment, manufacturing, fulllment, and procurement with suppliers and customers, while enabling event manage- ment. For example, it supports event-triggered planning and replanning. This level blends information gathered from users using collaboration in Level 2 and multiple transactions and planning systems to allow the exchange of knowledge by the SC partners and create synchronized plans and one global view of the supply chain. Each supply-chain member (buyer, supplier, carrier, third-party logistics, contract manufacturer, etc.) often operates independently and only responds to immediate requirements. If the Internet is integrated with the SC planning process, SC members can share needed information on a real-time basis, and react quickly and efciently to changes in demand, material shortages, transportation delays, and supplier inability to replenish. One example is the collaborative planning, forecasting, and replenishment (CPFR) initiative. McDonald’s Japan is a good example of the successful use of CPFR. McDonald’s Japan established a process around the Internet whereby stores, marketing, distribution centers, and suppliers would communicate and collaborate via the company’s Web Best Practice in Leveraging E-Business Technologies 373 Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. site to agree on order sizes and supply-replenishment delivery schedules (Ballou, 2004). TaylorMade (a large golf supplier) leveraged integrated SC planning to improve the order-fulllment process. TaylorMade adopted Provia Software as the warehouse- management system and integrated it smoothly with i2’s planning and fulllment systems to prioritize orders based on service level, order volume, promised delivery date, and transport mode (Bowman, 2002). Level 4: New Innovative Processes Once companies master e-business application levels, they start to think of adopting new strategies and models for conducting business, seeking not only incremental improvements, but drastic ones. They might seek to reengineer (redesign) their processes to leverage the most out of e-business technologies. Sometimes, companies start to dene new processes, seeking new business opportunities or trying to penetrate new markets and customer segments that were neither apparent nor possible prior to the e-business. Companies seek the new-generation business models to achieve competitive advantage and signicant benets. One example is what Dell Computer did when it adopted the build-to-order strategy and provided exible conguration capability for customers online. The following are examples that show the range of possibilities for companies that pioneered in these areas. Example 1: Mass Customization The Internet and e-business technologies facilitate mass customization and allow customers to congure specic order options tailored to their preferences. Mass customization is the centerpiece of a strategy that woke the big golf supplier TaylorMade and propelled it ahead of the competition in terms of agility and inno- vation. Today, TaylorMade can customize virtually any aspect of a club. The results to date are impressive (Bowman, 2002). Example 2: Public Marketplaces The Internet and e-business technologies helped many companies do business online using a secured specialized Web site. One example is World Chemical Exchange, providing a global market for chemical and plastic manufacturers and buyers. More than 2,500 members can now conduct around-the-clock trading of chemicals and plastics of all types (Lee & Whang, 2001). 374 Sabri Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis- sion of Idea Group Inc. is prohibited. Example 3: Supply-Chain Redesign A good example is what many remote discount computer-hardware and -supply houses did to compete with local retail stores. Many of them used the Internet technologies as a strategy to compress the order cycle time and improve the order-fulllment process: A customer enters the order through the company’s Web site, the inventory and payment are checked, and the order is lled from the warehouse and shipped using UPS, FedEx, or other carriers directly to the end customer. Example 4: Value-Added Replenishment Programs Companies as part of lean initiatives are trying to focus on value-added activities to cut waste in the supply chain and reduce overhead cost. Therefore, manufacturers are moving away from making products to stock and sell them later. They are moving away from procuring based only on forecast. Vendor-managed inventory (VMI) is a replenishment program that helps companies achieve their objectives. VMI delays the ownership of goods until the last possible moment and delegates managing the stock to the supplier. Western Publishing is using a VMI program in its Golden Book lines. It develops a relationship with its retailers in which these retailers give Western point-of-sale data. Ownership of the inventory shifts to the retailer once the product is shipped (Ballou, 2004). Kanban replenishment is another program in which replenishing parts is based on part consumption. It avoids the inaccuracy in forecasting and eliminates the need for inventory. Example 5: Online Retailing Amazon.com understood e-business technologies very well. It has based its business model around it. Amazon.com depends on its efcient supply chain to satisfy cus- tomer needs worldwide. It mastered the selling-management process by improving the Web shopping experience through providing quick and reliable promises, and suggesting product bundles, among many other features. This makes Amazon.com one of the biggest and early adopters of e-business technologies. Best Practice in Leveraging E-Business Technologies 375 Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. SRM Business Processes E-Business Application Levels Strategic Sourcing Product Design Procurement Benets SC Visibility Sharing AVL with design and procurement departments Real-time visibility on engineering change requests (ECRs) Sharing supplier and shipment information, real-time exception visibility, audit-trail notication, alerts, and tracking • Reducing part-inventory obsoleteness • Improving inventory turns • Reducing safety stock • Reducing expedition cost Work-Flow Automation A single user interface for design, sourcing, and procurement with exible and congurable work ows Shared design workbench Automated procurement subprocesses, bid analysis, and resolution work ow • Reducing design rework • Reducing process cycle time • Improving productivity Integrated SC Planning Consolidation of enterprise spend/demand across separate systems Tightly integrated to PDM and AVL Synchronized replenishment, supporting different replenishment types, and matching execution documents like purchase orders, ASN, and invoices • Increasing reuse of existing parts in the design • Improving on- time delivery Table 3. The impact of e-business application levels on SRM processes Benets of Adopting E-Business Application Levels Tables 3, 4, and 5 illustrate how the four application levels of e-business can address the challenges of SCM, SRM, and CRM business processes that were mentioned in the beginning of this section. These tables also show the potential benets of adopting e-business strategies. 376 Sabri Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis- sion of Idea Group Inc. is prohibited. SCM Business Processes E - B u s i n e s s A p p l i c a ti o n Levels Supply-Chain Design Sales and Operations Planning Order Fulllment Benets SC Visibility Providing an aggregated view on the SC performance and strategic information Real-time visibility to unexpected events in the SC and audit-trail data Real-time SC visibility for the order-delivery life cycle including contract manufacturers, distribution centers, and logistic providers • Reducing uncertainty and safety stock • Early issue detection Work-Flow Automation Consistent process with friendly user interface Unied demand plan across different departments Exception work- ow resolution for demand changes and fulllment delays • Increasing efciency • Fast response Integrated SC Planning Integration with strategic sourcing to reduce supplier base Synchronized marketing, sales, production, and procurement plans CPFR • Speed • Accuracy New Innovative Processes SC redesign Mass customization Build to order • Flexibility • Penetrating new markets • Customer satisfaction Table 4. The impact of e-business application levels on SCM processes New Innovative Processes Analyzing supplier and SC performance (slice and dice by site, commodity, time, supplier, and KPI) Design collaboration Auctions, marketplace exchanges • Reducing development cost • Improving time to market • Reducing part/ raw-material cost • Improving quality Table 3. continued Best Practice in Leveraging E-Business Technologies 377 Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Table 5. The impact of e-business application levels on CRM processes E-Business Application Levels Marketing Management Selling Management Customer-Service Management Benets SC Visibility (Information Sharing) Capturing feedback from the customers, providing a mix of products and service offerings customized to customer needs Providing up- sell and cross- sell product recommendations and product bundles, exible pricing models for markdown and rebates Providing service order status and highlighting exceptions • Publicizing product information • Increasing customer satisfaction • Reduce Inv. Work-Flow Automation Capturing log records for every visit of a user in the Web servers’ log le, including pages visited, duration of the visit, and whether there was a purchase, demand collaboration with customers Product conguration, quotation processing Service order logging, billing of services • Better prediction of customer demand • Improving response time • Improving productivity Integrated SC Planning Considering the supply-chain constraints while executing the marketing campaigns, providing customer proling and segmentation Supporting different channels for order capturing (Web based, call center, EDI, phone, e-mail, or personnel meeting) Warranty check, service order processing, integrating the call center • Increasing revenues and prot • Creating new market/ distribution channels • Accurate promising date 378 Sabri Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis- sion of Idea Group Inc. is prohibited. Tables 3, 4, and 5 show the operational and nancial benets of adopting e-business application levels. The operational benets can be grouped under inventory reduc- tions, cycle-time reductions, productivity increase, supplier performance improve- ment, and customer-service-level increase. The nancial benets are driven from the operational benets and can be grouped as follows. • Cost reduction due to cost savings. The tight integration of supply-chain pro - cesses reduces the cost and time needed to exchange transactions and allows efcient procurement, which helps the purchasing staff to focus more on stra- tegic activities like building supplier relationships than managing day-to-day transactions. • Revenue growth and prot increase due to increased customer satisfaction by delivering on every promise and responding quickly to customer needs, and the ability to penetrate new markets. • Better asset utilization by replacing inventory with real-time visibility • Higher shareholder value due to growing prot. The next section will provide the needed guidelines to implement e-business tech- nologies successfully. Finally, a case study will be presented. New Innovative Processes Real-time proling that tracks the user click stream, allows the analysis of customer behavior, and makes instantaneous adjustments to the site’s promotional offers and Web pages Online exible conguration and real-time promise date Dealing with products and services as one package during selling • Long-term relationship and trust with the customer • Gaining competitive advantage Table 5. continued Best Practice in Leveraging E-Business Technologies 379 Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. A Framework for Successful Implementation of E-Business Technologies Many companies are struggling with implementing e-business technologies and achieving the promised value or ROI. In addition, companies are looking for guidelines and strategies for ongoing operational management and support after the go-live, which includes rolling more customers, suppliers, and new business units when implementing e-business solutions to improve SRM, SCM, and CRM superprocesses. According to a survey of 451 senior executives, one in every ve users reported that their CRM initiatives not only had failed to deliver protable growth, but also had damaged long-standing customer relationships (Rigby et al., 2002). Currently, there is uncertainty and doubt among organizations regarding the new Internet technologies, and although the appeal for best practice and the benets of implementing e-business technologies are clear, enterprises struggle in integrating them into supply-chain operations because they are encountered by many challenges like the inability to master change management, the need for new skills to support processes that span across suppliers and partners, the need for e-business strategy and continuous upper management support, the lack of comprehensive metrics and continuous monitoring, and the inability to select the right software-providing partner. Figure 2. Framework for implementing e-business transformation programs 380 Sabri Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis- sion of Idea Group Inc. is prohibited. Figure 2 is proposed to address these challenges and provide best-practice guidelines to implement e-business program transformation successfully. E-Business Strategy and Goals A clear strategy is the rst step for a successful transformation. Executives need to understand the big picture, the interactions between all the processes, and the e-business applications to help them in creating an e-business strategy. Benchmarking Benchmarking is the process of comparing and evaluating a rm or a supply chain against others in the industry to help in identifying the gaps and areas of improve- ment. Benchmarking is used to validate the potential benet and gain in performance measures from implementing e-business applications. Process Analysis The purpose of process analysis (also called design and requirements) is to use modeling (process mapping) methods to analyze “as-is” business processes, capture the existing challenges and pain points in the current process and the supply chain, design and validate the to-be process improvements against best-practice benchmarks, determine the extent of process and technology changes possible in the currently existing systems, and identify the additional software (application) capabilities that are required to support the to-be process that cannot be supported by the existing systems. This requirements list will be the base for selecting the new software. Select the Right E-Business Software As a best practice, organizations need to identify the best-of-breed solution that is most suitable for the required functionality for their business, taking into consider- ation software-technology maturity and sustainability. Supporting leading industry standards for e-business technology like Java, XML, Linux, and Web services is crucial during the selection process. Best Practice in Leveraging E-Business Technologies 381 Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Cost and Benet Analysis Cost and benet analysis is the process that determines the potential benets from implementing the combination of the best-practice process and the new application or software. It addresses questions like the following. What is the potential value of increasing the loyalty of our customers when new marketing-management software is implemented? What is the cost of implementing the new solution? Adopt a Value-Driven Implementation Methodology Adopting a value-driven approach to conduct the e-business transformation programs like Six Sigma is very critical. An effective transformation program typically takes 2 to 5 years, with several intermediate checkpoints (go-lives) to achieve the value needed to pay for the rest of the program. Performance-Management System A performance-management system consists of two phases. The rst phase is to establish a consistent metrics-tracking and -publishing process, and this phase should nish before the implementation of the transformation program. The second phase is to continue measuring the benets and ROI, which should start during and after the implementation. Since the performance-management system depends mainly on monitoring the metrics (KPIs), it is critical to spend enough time on dening these metrics. The performance-management system should manage and coordinate the development of these metrics. Melnyk, Stewart, and Swink (2004) mentioned that metrics provide the following three basic functions. • Control: Metrics enable managers to evaluate and control the performance of the resources. • Communication: Metrics communicate performance to internal and external stakeholders. • Improvement: Metrics identify gaps (between actual performance and ex- pectation) that ideally point the way for intervention and improvement. Sabri and Rehman (2004) provided guidelines for identifying and maintaining met- rics based on best practice, recommended to capture all operational metrics because improvement in one area could be at the expense of another, and suggested to sum- [...]... Projects on Web Services and Context 391 Figure 1 Service chart diagram of a component Web service Layers Layers 1 Web service Web service Previous Previous services (M/O) services (M/O) B 2 State 11 State in 3 Business Business State State 22 State State 33 Data from Perfor type Perfor type Data from previous services (local or remote) previous services (local or remote) Next Next services (M/O) services... regard to the current Web services • Current Web services: indicates which Web services of the composite service are currently under execution • Next Web services: indicates which Web services of the composite service will be called for execution with regard to the current Web services • Beginning time: informs when the execution of the composite service started • Status per Web service: corresponds to. .. Projects on Web Services and Context 397 Figure 5 Web services engaged in context-driven conversations Service- agent i Web service instance i Execution C-context I -context Conversation 0 Web service needed Master -service- agent j Composite -service- agent Conversation Web service j W -context 1 Request to join a composite service Monitoring Request considered 2.2.1 Accept to delay Reject to delay/decline... made 2.1 Decline to join Conversation 2.2 Request to delay Invitation accepted 2.3 Accept to join Service to get ready Conversation Preparation Service- agent j later on Web service instance i done Deployment Conversation Invocation Web service instance j I -context Web service instance j Execution sations have two aims: to invite master service agents and, thus, their Web service to participate in... Master service agentj of Web servicej declines the request of the composite service agent A conversation message is sent back from master service agentj to the composite service agent for notification (2.1) Based on this response, the composite service agent enters again the conversation state, asking the master service agent for another Web servicek to join the composite service (1) Option b Master service. .. submitted to a Web service These requests originate from composite service agents that identify the composite services to set up For instance, the master service agent makes decisions on whether a Web service is authorized Figure 4 Agent deployment during the contextualizing of Web-services composition C-context Access Repository of composite service specifications Interactions Session of composite service. .. service • Master -service- agent label: corresponds to the identifier of the master service agent in charge of the Web service • Number of instances allowed: corresponds to the maximum number of service instances that can be created from the Web service • Number of instances running: corresponds to the number of service instances of the Web service that are currently running • Next service- instance availability:... (Figure 3) In ConCWS, Web-services composition results in identifying three types of software agents: composite service agent, master service agent, and service agent The role of the master service agent is to track the multiple Web -service instances, which are obtained out of a Web service Master service agents, Web services, and W-contexts are all stored in a pool (Figure 4) A master service agent processes... Masterservice-agents 1 Update Update I -context SCD-Web service 1 Composite -service- agent SCD-Web service 2 SCD-Web service 4 Service- agent W -context I -context SCD-Web service 3 Master -service- agent SCD: Service Chart Diagram Copyright © 2007, Idea Group Inc Copying or distributing in print or electronic forms without written permission of Idea Group Inc is prohibited 394 Maamar to join a composite service. .. for the composite service, and identifies the first Web services to be triggered When the first Web service is identified, the composite service agent interacts with the master service agent of this Web service, asking for a Web -service instantiation If the master service agent agrees on the instantiation upon checking the W-context, a service agent and I-context are both created The service agent initiates . Management Customer -Service Management Benets SC Visibility (Information Sharing) Capturing feedback from the customers, providing a mix of products and service offerings customized to customer. from product design and procurement to marketing and customer -service management, in order to be more responsive to customer needs. The new trend of mergers and acquisitions will continue to. capacity of a Web service to resist change while maintaining function and to recover to normal levels of function after a disturbance. To meet these requirements, Web services have to assess their