enterprise engineering

Enterprise Engineering

Industrial & Manufacturing Enterprise DepartmentThe Wichita State Universityhttp://www.mrc.twsu.edu/enteng

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

IE880I

Text The Great Transition : Using the Seven

Disciplines of Enterprise Engineering to Align People, Technology, and Strategy

by James Martin Hardcover - 503 pages (September 1995) AMACOM; ISBN: 0814403158

Also, significant outside articles will be assigned.

IE880I - Topics

Overview of Enterprise Engineering (3 weeks)

Basic overview of what is enterprise engineering and its benefits. Students will learn the advantages of EntEng and associated terminology and philosophy.

IE880I - Exam 1 - February 5, 1999.Test will be closed book/notes - fill in the

blank/essay format.One hour long, then we begin the next topic.

We will have class Feb 26, 1999 Dr. Mahlzahn will be guest speaker on

Activity Based Costing

What is an Enterprise?

An Enterprise is a complex systemof cultural, process, and technology components ...

... a system engineered to accomplish organizational goals.

EnterpriseEnterprise

What do Engineers do?

Same as other engineers, Enterprise Engineers design things.

Only their thing is the enterprise

Design things!

Systems Approach

feedback

YourSupplier

YourCustomer

feedback

input output

EnterpriseGoals

PeopleTools

Machines

YourProcess

System

Environment

ExternalSuppliers

ExternalCustomers

Martin Chapter 3-5 IE and IT Article by Davenport and Short EntEng: A Discipline? Article by Liles, et

al. Verndat Chapter 1

Wrong use of Automation (Chap 3)

How can we automatewhat already exists?

Design

Replace to make fundamentally betterReplace to make fundamentally better

Wrong use of Automation (Chap 3)System must fit the users and not

the reverse?

Not always, frequently the users must change their ways in order to maximize profits from automation

Redesign, then automate!

Little change, little payoff Big change, big payoff

A small change with some payoff may mean it is much more difficult to make the right change later.

Russell Ackoff

“If each part of a system, considered separately, is made to operate as efficiently as possible, the system as a whole will not operate as effectively as possible.

Martin

“It is appalling how many authorities on “business process reengineering” advocate modeling and modifying an existing business process when the right thing to do is scrap the process and take an integrated approach to building cyber-crop value streams (discussed later)

Raise questions about … overall architecture, culture, and IT

Electronic Organism (chap 4)

As systems become more complex, the design of these systems must be automated.

Automation of Automation

Reaction times shrink, complexity increases, decisions become less intuitive.

Key concept

JOINT creativity of business and computer people

Architecture - Martin

“The architecture of an enterprise is the basic overall organization within which work takes place.

Note how this compares with later definitions

EntEng Definition (Martin) (Chap 5)

… an integrated set of disciplines for building or changing an enterprise, its processes, and systems. It integrates the most powerful change methods and makes them succeed. The goal is a human-technological partnership of maximum efficiency in which learning takes place at every level. (Martin)

Goal of the Enterprise Engineer “Identify and integrate the most

valuable and successful ways to change an enterprise, and to take them into a professional discipline with a teachable methodology and measures of effectiveness.”

What do Enterprise Engineers do?

Identify and Integrate best and most successful ways to change an enterprise

What do Enterprise Engineers do?

Two aspects

Understand new mechanisms New ways of organizing work New Corporate Architectures must

be understood Understand methods that can

change an enterprise

Two questions Enterprise Engineers always ask

What should the enterprise be?

How do we get there from here?

Seven Components of Enterprise Engineering

TQM, Kaizen

Continuous change applied across an enterprise

Kaizen - Japanese term for continuous improvement

Everybody improves everything all the time

If it aint broke don’t fix it!

Procedure Redesign

Discontinuous reinvention of existing processes

Quick hit

Low lying fruit

Value Stream Reinvention

Discontinuous reinvention of “end to end” streams

Breakthrough improvement for the CUSTOMER

Enterprise Redesign

Discontinuous redesign

Holistic change to a new world architecture, sometimes accomplished by building new business units of subsidiaries.

All for changing processes

Simplifying work Improving results

Simplification of Work (note order)

Eliminate (bureaucracy and non-value added)

Simplify (work flow, etc.) Work Smarter Reduce Middlemen (eliminate) Refine IIS Automate Automate Automation

Strategic Visioning

What is a vision?

Strategic Visioning

Resisting the Tide of Change

“Doing your best is not enough.” W. Edwards

Deming

You must know what to do, how to do it and be willing to pay the price to do it.

UnderstandEnvironment

A Disciplined Planning Process

DefinePurpose Vision, Values, Mission

Issues, Concerns, Assumptions

Strategies

Obstacles

Objectives

DetermineOutcomes

Identify Risk

EvaluateAlternatives

AssignActions

An Iterative Process

Strategic Purpose

Management Commitment

Environmental Assessment

Focus on the customer

UnderstandEnvironment

A Disciplined Planning Process

DefinePurpose Vision, Values, Mission

Issues, Concerns, Assumptions

Strategies

Obstacles

Objectives

DetermineOutcomes

Identify Risk

EvaluateAlternatives

AssignActions

Do You Need a New Purpose?

Confusion about where organization is going

Complaints about inability to contribute

Losing customers

Not current on the latest developments

Use of “We” and “They”

Excessive risk avoidance

Difficulty in describing improvement

Hyperactive rumor mill

Purpose

Values

Mission VisionCustomer

Expectations

A Process

Input ActivityOutput/

Outcome

Vision

What do you want said?

Humanity is grateful that

someone who so adored their species lived among them

I would rather be

here than in Philadelphia

What the organization

ASPIRES to become

Vision

Vision Statement

Appropriate

Inspiring

Directing

Focusing

Guiding

Unique

Vision Statement

A vision statement can be used as a marketing tool as well as an inspiration to employees:

Ford's vision:

Quality is job 1.

ADM's vision:

Supermarket to the world

If the vision motivates employees, it will influence customers.

Mission

What the organization

SHOULDSHOULDbe doing

Mission Statement

Broadest strategic planning choices of what the organization should do

• Products/services

• Markets

• Customers

• Competitors

Values

Guides the

organization’s

BEHAVIOR

Values

Communicates what is and what is not right

Provide context for decision making

Enduring

Widely shared

Values Statement

Based on values of organization

Commits resources to achieve vision

Not a slogan

Lived everyday

Drives behavior of employees at all levels

Statement of Purpose

"We will create a corporation in which all people, particularly technical employees, are respected and are able to work to the best of their ability."

"We will not imitate the products of our competitors, but will try to create goods that have never existed in our market before."

"We will focus on the consumer market and apply the most advanced technology to the consumer products area."

Sony Corporation, 1946Total Assets: $500

I know those guys!

Assignment

For your own (pretend) company, develop

Vision

Mission

Values

A Discipline?

Article by Liles, Johnson, and Meade 1996

Industrial Engineering Research Conference

Characteristics of a Discipline

ReferenceDisciplines

Focus ofStudy

WorldView

Principles&

Practices

ActiveResearchAgenda

Education&

Professionalism

Focus of Study

Unique fundamental question

Must be meaningful as technology changes

Enterprise Engineering - “how to design and and improve all elements associated with the total enterprise through the use of engineering and analysis methods and tools to more effectively achieve its goals and objectives

World View

Paradigm

Guides the discipline through research and practice

Enterprise Engineering Enterprise can be viewed as a complex system Enterprise is to be viewed as a system of

processes that can be engineered both individually and holistically

Engineering rigor is required in transforming an enterprise

Enterprise CAN be engineered

Reference Disciplines

Supporting disciplines must be discovered and assessed not merely adopted.

Allows other researchers to follow the links for the grounding of theories

Industrial Engineering

Systems Engineering/Systems Theory

Information Systems

Information Technology

Business Process Reengineering

Organizational Design/Human Systems

Principles and Practices

Principles - Define philosophical approach to problem solving

Practices - methodologies, models, procedures, and theories used to apply knowledge

Theory - sound principles Abstraction - modeling or representation Design - synthesis - iterative generation

and evaluation of alternatives Implementation

Active Research Agenda

Hypothesis generated and tested Multiple subquestions

Examples: Enterprise Transformation Methodology Strategic Justification Methodology Ontology Development Virtual Enterprise Architecture

Education and Professionalism Conferences - ISEE Conferences

Journals - IIE Transactions, Special Issues

Curricula - UTA, Toronto, Edinburgh, Australia

Professional Society - ISEE

Disciplines - Summary

Enterprise Engineering Discipline

Focus of Study A well defined and uniquefocus of study is established.

World View A world view or paradigm isfirmly established.

ReferenceDisciplines

A solid, but narrow set ofreference disciplines has been

identified.

Principles &Practices

A set of principles andpractices is emerging.

Active ResearchAgenda

A cumulative researchtradition must be established.

Education &Professionalism

Specific journals, universityprograms and local chapters

are needed.

The New Industrial Engineering Article by Davenport and Short

Sloan Mgmt Review Summer 1990

IT and BPR

IEs use IT in Manufacturing

IEs now penetrate offices

The New IE

Recursive View of IT and BPR

How can IT support Business Processes?How can IT support Business Processes?

How can business processes be transformed using IT?How can business processes be transformed using IT?

IT CapabilitiesIT Capabilities BP RedesignBP Redesign

What are Business Processes? … a set of logically related tasks

performed to achieve a defined business outcome

A set of processes forms a business system

Characteristics of business processes Customers - recipients of outcomes Cross organizational boundaries

Redesign with IT - Five Steps

Develop Business Vision and Process Objectives

ID Processes to be Redesigned

Understand and Measure the Existing Process

ID IT Levers

Design and Build a Prototype of the New Design

Types of Processes

Process Dimension &Type

Typical Example Typical IT Role

Entities

Interorganizational Order from a supplier Lower transaction costs;eliminate intermediaries

Interfunctional Develop a new product Work across geography;greater simultaneity

Interpersonal Approve a bank loan Role and task integration

Objects

Physical Mfg a product Increased outcomeflexibility

Informational Create a proposal

Activities

Operational Fill order Reduce time and costs;increase output quality

Managerial Develop a budget Improve analysis; increaseparticipation

Management Issues

Management Roles - commitment even through across functional boundaries

Processes and Organization Skills - new ones required Continual Organization Improvement IT Organization in Enterprise may

change Continuous Process Improvement

Vernadat - Text - Definitions

CIM - integrates man and machine by: facilitating communication cooperation coordination

across departments JIT - reduce procurement delays and stock

assumes good integration of info and good logistics

Lean manufacturing - minimize product devlopment costs by elim NVA, outsourcing, org changes

Concurrent Engineering - integrating all departments to make things better, faster, cheaper

Vernadat - Text - Definitions (cont.) Enterprise - within the bounds of the company

intra-enterprise integration Extended Enterprise - beyond the bounds of

the company inter-enterprise integration

Agility -adapt quickly (able to respond to unanticipated change)

Virtual Enterprise - Extended enterprise on a temporary basis.

Hetarchical organization - autonomy

Reasons for CIM Failures

•Top Down Approach

•One massive project•Too Complex

•Bottom Up Approach

•Integrating Piece-by Piece•Islands of Automation

•Failed to consider people

Loose Integration vs Full Integration Loose

simple exchange of info no guarantee of same interpretation ex. Dedicated interface

Full specificities are known only the the one

system two systems contribute to a common task two systems share the definition of items

exchanged

Horizontal vs Vertical Integration Business viewpoint

Horizontal - from “dock to stock” technologically dependant

Vertical - various mgmt levels decision flow

System/Application/Business Int

Model What?

Products Resources Information Organization (and decisions) Business Processes Human (effects)

Role of EM

Prereq for enterprise integration

History integration of data and info really business process coordination

integrating infrastructure enterprise model - semantic unification

Problems with EI/EE

Cost (unclear)

project size and duration

complexity

management support - does not clearly relate to strategy

skilled people

Next Week

Hammer and Champy Book

Article by Meyer, deWitte

enterprise engineering

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