The key question at this point becomes: How do supply chain processes create
more value as the enterprise matures and expands? With determining how to
improve business process at the forefront of management thinking,
Along the way, the firm moving toward the intelligent value network
wants to quantify the potential value of the transformation. That effort requires
the creation of a process maturity roadmap, which follows the maturity model
and leads the firm to becoming part of the best process-enabled extended
enterprise and eventually an intelligent value network.
To create such a map, we need a process model of the extended enterprise,
one that in particular illustrates the key supply chain processes that the enterprise
executes. A process model that has become a standard in many industries
over the last few years is the Supply-Chain Operations Reference (SCOR�)
model, developed by the Supply-Chain Council, an independent, not-for-profit,
global corporation with membership open to all companies and organizations
interested in applying and advancing the state-of-the-art in supply chain management
systems and practices. The SCOR� model captures the council�s consensus
view of supply chain management.
For the supply chain practitioner, SCOR� provides an excellent starting
point for developing supply chain thinking, and we have adopted it to guide our
thinking about process maturity. SCOR� covers the processes associated directly
with the supply chain � its design, planning, and execution. In the
authors� experience, the way in which a product is designed for manufacture
has a marked effect on the subsequent effectiveness of the supply chain. The
time to get a new product to market is often critical in maximizing the return
from the product, and the way in which changes are managed can make or break
a product�s long-term profitability.
We have augmented SCOR� with a set of processes that impact the Make
portion of the model and cover the engineering steps � processes that determine
the product design, how it is to be manufactured, and how the design will
be modified over time. These processes are illustrated in Figure 1.3, between
the need to manage the supply chain and the need to manage the products
manufactured. They are indicated as the linked arrows impacting the Make
phase and include (a) the design phase that is impacted by manage product
portfolio, design product, configure product (concurrently), and change product
and (b) the production engineering phase that is affected by design process and
tooling and maintain process. Getting these processes done correctly is as
important as any of the other major processes contained in the SCOR� model.
Deliver completes the traditional supply chain, getting the goods to the
customer. It encompasses many of the �order-to-cash� processes, from inquiry
and order processing through final product configuration, warehousing, order
picking, and logistics planning (load building, routing, dispatch planning) to
collecting proof of delivery or installation and invoicing. A version of Deliver
deals with the delivery of retail products to the back room of the store, onto
the shelves, and through the cash registers via the shopping cart.
Recent additions to the SCOR� model are the Return processes � a need
driven by new legislation on recycling and packaging, along with the need to
provide ever-higher levels of after-care service to customers, at an affordable
cost. The process elements deal with authorizing the return of a product (warranty
claim, replace or refund), organizing the receipt of the product back into
the supply chain, and planning the most cost-effective way of dealing with the
defective product (whether to repair or scrap). Of course, repaired products need
to reenter the supply chain, to flow back in the customer direction, so the Return
process ultimately links back to Plan, where this additional source of product
can be taken into account.
The engineering processes that complete our enterprise model are comprised
of:
_ Manage product portfolio
_ Design product
_ Configure product
_ Design (manufacturing) process and tooling
_ Change product design
_ Maintain (manufacturing) process
The Manage product portfolio process encompasses all the activities associated
with deciding what products to provide through the supply chain. It
includes the generation and testing of research ideas, proof of concept, and the
management of linked groups of products through options and features.
The Design product process takes a chosen product idea through to a viable
product design ready for release to manufacturing. The process covers not only
a complete finished product, but also the parts and assemblies that go to make
the finished product. The process includes concept design, the development of
the design (including testing of materials, piece parts, and assemblies), through
to a production design, released to manufacturing. Product designs are first
conceived as ideas in the concept stage. The process model for concept design
must be highly flexible and nondeterministic in nature, with design ideas moving
between suppliers and team members in a free-flowing, synchronous manner.
Once the design ideas and concepts have converged, design intent then moves
to the design/redesign stage. Here, the number of unknowns has lessened to the
point where a controlled work flow model can be implemented with more
formal approval and release control.
Configure product governs the way in which products are configured to
ensure maximum value of common and standardized components and the reuse
of previous design ideas. Configuration management controls the content of the
product from design through manufacture and throughout its service life. It
includes the creation of bills of material, support for revision and version control,
support for �where used� searches, and multiple bill of material views. The
product data integrate with enterprise resource planning systems, and more
advanced companies will have support for rules-driven configurations. Product
configuration management does not stop once the product is released from
manufacture � it continues as an essential part of the management of the
product�s entire life cycle.
The Design process and tooling processes take us from a design to a set of
manufacturing instructions and the necessary tooling to support the manufacture.
Traditionally, this was a �one-hit� process or at best a two-hit! For example,
British automotive manufacturers could take up to six months to produce
a new set of tooling to iron out production problems. A the same time, Japanese
manufacturers had cut the time to six weeks, so prototyping became the accepted
way of developing the production process. Thus, for more mature companies,
this process interacts with the Design and Configure processes. Finally,
the completed product design is ready for production release, where the production
process model takes over.
Finally, we have two processes that deal with the changing product design:
Change product design and Maintain (manufacturing) process. Change management
is critical to both the longevity of the product�s profitability and the
continued effectiveness of the supply chain to deliver the product. While we
have shown the Change process starting after the product is released for manufacture,
in fact best practice dictates that change control is applied from the
beginning of the design process. Version control and change effectivity dates
are crucial to managing the evolution of the design both pre- and post-production.
In parallel with changes to the product�s design, manufacturing processes
must be kept up to date, both in terms of their own effectiveness and to keep
in line with changes to the design. Our final process � Maintain process �
deals with this requirement by establishing processes that make certain the
designs and products are still viable years into their life cycle.
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