A new approach to supply chain management based on pooling ITIL and APICS Principles and Practices

Transcription

1 355 A new apprach t supply chain management based n pling ITIL and APICS Principles and Practices Abdelaali Himi 1, Mustapha El Masbahi 2, Samir Bahsani 3 and Alami Semma 4 1 Department f Mathematics and Cmputer Science, Faculty f Science and Techniques, Hassan 1 University Settat, Mrcc 2 Department f Mathematics and Cmputer Science, Faculty f Science and Techniques, Hassan 1 University Settat, Mrcc 3 Department f Mathematics and Cmputer Science, Faculty f Science and Techniques, Hassan 1 University Settat, Mrcc 4 Department f Mathematics and Cmputer Science, Faculty f Science and Techniques, Hassan 1 University Settat, Mrcc Abstract APICS (Advanced Prductivity, Innvatin and Cmpetitive Success - The Assciatin fr Operatins Management) is knwn as the repsitry prviding a set f best practices in Supply Chain Management. The ITIL (Infrmatin Technlgy Infrastructure Library) als prvides best practices fr IT service management. Nting the existence f a similarity between these tw standards, this paper identifies the ITIL cncepts used in the supply chain cntext and describe their cntributins. Keywrds: Best Practices, ITIL, Availability, Service Level, Incident, Prblem, APICS, Prcess, Supply Chain, MRP, MPS, Frecasting, Planning, Manufacturing 1. Intrductin Faced with the cmpetitin experienced by tday's industrial cmpanies, the need t master the management f the supply chain is becming a crucial strategic factr. The APICS repsitry, cnsidered as a wrld reference in Supply Chain Management, ffers a set f best practices, drawn primarily frm the return f the experience f majr practitiners. The ITIL framewrk als prvides gd practices fr IT service management that have cntributed t imprving the services prvided by cmputer cmpanies t their clients. Accrding t ur experience in the implementatin f ERP-based supply chain management and infrmatin systems, we have nted that there is a similarity between the ITIL framewrk and the APICS repsitry. Indeed ITIL can prvide mre precise answers t questins f mnitring supply chain prcesses and measuring their perfrmance. The purpse f this paper is t identify ITIL cncepts and prcesses that can be applied t the supply chain cntext, by insisting n their pssible cntributin. 2. Supply Chain Management Prcess accrding t APICS reference 2.1 Intrductin Manufacturing is basically the prcess f cnverting raw materials int finished prducts. This prcess cnsists f a set f peratins each f which cnsumes resurces (labur, machinery and materials). T manage the prcess means the planning and cntrl f resurces: setting gals and deciding n the use f resurces t achieve these gals. The materials flw cntrls prcess perfrmance, it can be classified as:

2 356 Planning and Prductin Cntrl: Prductin Planning Implementatin and Cntrl Inventry Management Physical Supply et Distributin : Transprtatin Supplier Physical Supply Stck distributin Warehusing Shipping Handling Demand Entry It is recmmended t have a department respnsible fr the materials flw: planning and cntrl f flw. The bjective f this entity is t maximize resurces utilizatin and prvide the required level f custmer service. 2.2 Prductin Planning System Manufacturing Planning and Cntrl System is an infrmatin system that includes: Planning functins (SOP, MPS, MRP). Executive functins (cntrl f lad flw, scheduling, launching). Pririty, established by the Marketing and Manufacturing, is respnsible t cmbine plans t meet it. Capacity is the ability f a prductin facility t prduce finished prducts; it depends n the resurces prvided by the cmpany and the materials availability. Capacity Management is the prcess that calculates the capacity required t accmplish the pririty and finding methds fr making the capacity available fr prducing finished prducts. 2.3 Master Scheduling Manufacturer Distributin Client Manufacturing Planning and Cntrl Materials flw Demand (infrmatin) Physical Distributin The fur functins required t execute an MPS (Master Prductin Schedule) in any Prductin Planning System are: Establishing the link between the prductin plan and what is actually being manufactured; Frming the basis fr calculating the capacity and the necessary resurces Pilting MRP by MPS; Keeping the pririties valid. The functins carried ut thrugh MPS between Sales and Prductin are: MPS infrms Prductin and Sales when gds will be available fr delivery MPS is a c ntract between Marketing and Prductin The Prductin Plan relates t families f prducts whilst MPS is cncerned with finished prducts (The Prductin Plan cntrls the MPS). T develp an MPS, the infrmatin required is: A prductin plan; A frecast f finished prducts; A recrd f received sales rders; An inventry levels f finished prducts; There are three steps t preparing an MPS: Develp a preliminary MPS; Test the Preliminary MPS with the available capacity; Reslve any differences between them. 2.4 Material Planning Requirements MRP establishes a Pririty Plan shwing the cmpnents required fr each level f assembly and calculates the time that these cmpnents will be needed. The MPS cntrls the MRP. The inputs t the MRP are: MPS; Stck recrds: Planning factrs (rder quantity, leadtimes, stck safety, scrap); Status f each article (available, reserved, available fr future demand); Bill f materials. 2.5 Prductin Activity Cntrl (PAC) PAC is respnsible fr implementing MPS and MRP thrugh initiating and cntrlling the wrk rders. The activities f the PAC can be classified as fllwing functins: Planning: Plan the wrkflw at each wrk centre (t ensure that adequate material and labur are available);

3 357 Plan the start and end date fr each rder by develping the lad prfile fr each wrk centre. Implementatin: PAC cllects infrmatin necessary fr the wrkshp t manufacture the prduct and then issues wrk rders t the wrkshp, as authrised by MRP; Cntrl: nce the rders have been started, the prcess must be cntrlled t cmpare the actual prgress with the planned. 2.6 Inventry The stck can be classified: Accrding t the flw f: Raw materials; Wrk in prcess; Finished gds. Accrding t the functin: Anticipatin inventry: t anticipate future demand, it reduces the cst f changing the rate f prductin; Fluctuatin inventry : t cver the randm fluctuatins in supply and demand, t avid disruptins in prductin r delivery; Lt-size inventry: t take advantage f vlume discunts and reduce administrative csts and set-up; Inventry Management must establish decisins and rules abut stck items in rder t permit the staff respnsible fr cntrlling stck t d their jb effectively. These rules are: What are the mst imprtant items; Hw are items cntrlled; Hw t rder each time; When t place an rder. Inventry Management is designed t achieve the required service level and reduce ttal cst, which prvides the answers t tw questins: Hw shuld we rder at all times: Lt fr lt (MPS and MRP); Fixed-rder quantity; Min-max system; Ecnmic rder quantity; When an rder shuld be placed: Independent demand; Order pint system; Peridic replacement mdel; Dependent demand : MRP. 3. Infrmatin System Management Prcess accrding t ITIL reference 3.1 Intrductin T define ITIL, ne must psitin neself in a cntext f cntinuus IT service imprvement, and referrals t internal and external custmer needs. IT is the cncentratin f effrts n the custmer value that will cntribute t a strategic alignment f IT services within business enterprises. ITIL is defined as a set f best practices structured as multiple prcesses cmmunicating with each ther. Each f these prcesses fulfils its dual rle; t meet and care abut the cntinuus imprvement and custmer satisfactin. Best practice rganizatins prvide a structure, apprved by years f experience in large glbal cmpanies, recgnized fr their prfessinalism and thrughness, t frmalize their prcesses and ptimize IT service management. 3.2 ITIL principles that are clser t the Supply Chain cntext Management demand The management demand is a cr itical aspect f service management. A prly managed applicatin is a surce f risk t service prviders because f the demand uncertainty. Excess capacity generates csts withut creating value that prvides a basis fr cst recvery. Cncepts Demand Management Activity (activitybased demand management)

4 358 This means predicting demand fr services by analyzing and fllwing the habits and behavirs f the client's business prcesses. Diagram f business activity (PBA - Pattern f Business Activity) This is the wrklad prfile f ne r mre business activities. Business activity patterns help the service prvider t understand and plan fr changes in activities relating t the jb. Balance supply and demand; Avid csts assciated with excess capacity that d nt add value; Prevent the impact f insufficient capacity n the quality f services. Service management faces the additinal prblem f the synchrnizatin f prductin and cnsumptin. Service prductin cannt ccur withut the presence f the applicatin that cnsumes the utput. This is a 'pull-system' in which the cnsumptin cycle stimulates the prductin cycle. Cnsumer demand prducts and prductin answers their demands in a highly synchrnized pattern. Demand and capacity are a much mre clsely cupled service system, even when cmpared with 'just in time' manufacturing. The prductive capacity f available resurces f a prduct is adjusted accrding t demand frecasts. Accrding t APICS, Demand Management is the crdinatin f prductin plans between Sales and Prductin Services. It is regarded as a functin, identifying and managing all requests fr prducts (lcal and freign clients, ther stres, warehuse, spare parts, prmtin, stck distributin, stck recrds etc). Nte that the frecast is inevitable in the develpment plans t meet future demand and is invlved in: Strategic planning facilities; The planning f aggregate demand; Individual planning applicatins. The custmer expectatin determines the cmpetitive characteristic f the prduct that can be described either as an rder qualifier r an rder winner. T cntrl the prductin strategy, the cmpany must understand the difference between the prduct rder winner and rder qualifier and cuple the market. Nte that the rder qualifier and the rder winner are based n the prduct's life cycle (intrductin, grwth, maturity and decline) Supplier Management Managing subcntractrs and suppliers, and the services they prvide, can ensure the flawless quality f business services as well as ptimizing resurces. Dcumentatin and identificatin f the scpe f supprt services, as well as the interfaces and dependencies between suppliers; Dcumenting the rles and respnsibilities f key suppliers and subcntractrs; Updating cntracts thrugh a prcess f change management; Mnitring, reprting and reviewing suppliers' perfrmance and track imprvements; Cntract auditing; Reviewing and analyzing risks fr all vendrs and cntracts; Analyzing the prfitability and value f suppliers and cntracts; Maintaining the suppliers and subcntractrs' database. Supply Chain cnsiders the supplier as a strategic partner within the cmpany. The supplier is required t wrk clsely tgether with the cmpany, t enable t enable them t execute their plans in rder t prduce the mst effective slutin. This special relatinship is generally supprted by an infrmatin system t ensure high availability f useful data. This prcess allws, amngst ther things, the ability t track purchase requests, respnd t suppliers, rders, receipts, payments prviders and the extent f suppliers' perfrmance thrugh their ratings n the basis f respect fr their cmmitments Capacity Management Prvide nging capacity prfitably in all areas, tailred t the needs f current and future agreed business.

5 359 This prcess is brken dwn int three prcesses: Business capacity management. Services capacity management. Cmpnent capacity management. Prduce and maintain the capacity plan; Implementing practive measures t imprve service perfrmance; Studying the impact f changes n the Capacity Plan in terms f services and resurces; Ensure meeting r exceeding perfrmance targets. Capacity management can identify the peratinal resurces needed in terms f strage capacity, lgistical, human and financial resurces t meet the client's needs whilst respecting the agreements reached with the latter. Accrding t APICS, capacity is defined as the ability f a ch arge centre, t achieve a g iven utput per perid. There are tw types f capacity: Available Capacity: Ability f a charge centre t achieve a prductin in a given perid; Required Capacity: Ability f a charge centre, required t achieve a desired utput in a given perid. Capacity Management is als respnsible fr determining the Required Capacity, and pilting and the cntrlling the Prductin Plan hnr cmmitments Service Level Management Ensure that the level f service agreed with the client t all current services prvided. T define, dcument, agree, mnitr, measure, reprt writing and reviewing all service levels; T ensure and imprve custmer relatins; T set targets fr service levels; T mnitr and imprve custmer satisfactin; T manage custmer expectatins; T imprve service levels practively. Cncepts SLR (Service Level Requirement): It is a set f requirements expressed by the client as t the level f service required. SLA (Service Level Agreement): It is a f rmal agreement between a s ervice prvider and client, defining the key service level targets and respnsibilities f each party. OLA (Operatinal Level Agreement): It is an agreement between a service prvider and anther part f the same rganisatin that cntributes t the prvisin f service. UC (Underpinning cntract): A binding legal agreement fr the management f agreements with external suppliers. OLA OLA SLR Custmer Sales Supply chain Industrial SLA UC UC The main cncern f the Supply Chain is t anticipate custmer demand in rder t have the right amunt at the right time. The service level is measured in terms f delivery, the quantity delivered and the quality f the prduct. Gd demand management and a gd cmmand f bth the ability and surces f supply can lead t the develpment f prductin plans that are realistic and effective: in such cnditins the level f service can be very high. It is bviusly clear that the bjectives f the varius services in the cmpany will nt g in the same directin. APICS attaches great imprtance in rder t minimize the ttal cst and maximize the custmer service level cmpatible with the cmpany's strategy. By adpting this visin, the supplier is cnsidered as a partner and nt an external actr. When these gals are frmalized thrugh SLR, SLA, OLA and UC, the level f service may be mre accurate and easy t pilt Availability Management Purpse The purpse f this prcess is t ensure that the availability f service level agreements, match r exceed the agreed needs, present and future f the business and is cst effective. Cncepts Suppliers

6 360 Availability is the ability f a service r cmpnent prvider t perfrm their functin as agreed and when required. Reliability is the measure f the duratin f a service r cmpnent prvider t functin in accrdance with their agreement and withut interruptin. The plan must reflect the availability f current and future business bjectives f service availability. It must ensure that these needs are supprted by service management and perfrmance-related resurces availability. Availability management is a balancing act f being able t prvide the service whilst at the same time ensuring maximum ecnmy. Availability management shuld ensure the agreed level f availability f supplies and resurces. Availability management must cntinually ptimize, and practively imprve the availability f the infrastructure, services and supprt rganizatin, s as t prvide imprved cst effective availability that can prvide business benefits t custmers. T imprve service availability; T achieve the agreed availability; T develp and maintain an apprpriate level f availability. The availability f finished prducts r raw material is a crucial factr fr the successful supply and delivery t the custmer. The crrespnding infrmatin systems are very flexible and are critical t the management f material availability. T meet custmer demand, the system must be able t prvide all infrmatin related t the availability f materials in rder t knw the quantity in stck r frecasted, taking int accunt the quantities reserved r blcked and utstanding suppliers etc. The identificatin, derived frm careful management f stcks, f the status f finished prducts r the raw materials is s crucial t develp efficient prductin plans. Indeed, the availability definitin may vary if we cnsider reservatin f finished prducts r raw materials. T meet custmer demand, the prcess must be able t prvide all infrmatin related t the availability f the raw materials like the actual r frecasting quantities Catalgue Management The purpse f catalgue management services is t prvide a single surce f cnsistent infrmatin n all the agreed services, and t ensure that it is widely available t thse authrized t access it. The bjective f catalgue management is t ensure that a s ervice recrd is prduced and maintained; cntaining detailed infrmatin n all peratinal services and which f them is ready fr executin at the peratinal level. Ensure that a service catalgue is prduced and maintained; Manage the infrmatin cntained in the catalgue f services: states, interfaces and dependencies f current services perating; Ensure the accuracy f catalgue infrmatin services fr all prductin services; Facilitate access fr all authrized persns. Fr the supply chain, all services prvided t clients must be dcumented and detailed in the catalgue service. It is als highly recmmended t state the cmmitment f suppliers and custmers and display cnditins fr access t these services. Example: Requirements fr supply t client and/r whether they have a display. Currently, the crrespnding infrmatin systems can nt perate withut a predefined catalgue. Recrded sales rders must necessarily rely n Management Advanced Pricing that takes int accunt the tariffs and trade agreements prducts. Additin t the technical r peratinal characteristics f an item that cnstitutes the master recrd, a catalgue f items is als imprtant in the relatinship with the client. An item clearly identified and dcumented may liquefy any type f transactin relating t the item. Orders expressed by custmers being recrded shuld be based necessarily n infrmatin prvided by the service catalg Cntinuity Management Supprt the whle prcess f business cntinuity management by ensuring that the cmpnents and technical services can be restred within the time required and the business agreement. Impact analysis fr business' cntinuity plans are aligned with the business;

7 361 Practively imprve the availability and cst f services; Maintaining cntinuity plans and supprt the business cntinuity plan; Analysis f the risk f service utages; Negtiate and enter int cntracts necessary prvider. Cntinuity f service delivery ccurs after a majr event that affects the smth running f an peratin. Examples f strikes (carriers, emplyee etc.), natural disasters (fld, earthquakes, etc.) r vluntary acts f vandalism. It is recmmended t have a supply chain cntinuity plan, accrding t the custmer agreement and hnred cmmitments. Currently, mst cmpanies have an infrmatin system supprted by an ERP r a WMS that stres all infrmatin related t the supply chain. These ERPs r WMSs typically rely n databases, whse backup prcedures and recvery shuld be well defined t ensure cntinuity f service Security Infrmatin Management Align infrmatin security n the Safety f Business and ensure that infrmatin security is managed in all peratins management services. Cncepts Availability ensures that access t infrmatin is guaranteed at the time agreed and t the peple wh are qualified t access it; Integrity is the prperty that infrmatin is kept as pssible, t its reliability and exactitude. Cnfidentiality is the principle that des nt permit access t r disseminatin f any infrmatin r service, relating t the client, t any authrized persns. Develp and maintain plicies, prcesses and prcedures fr infrmatin security; Educatin and awareness n the prcess f infrmatin security; Cntribute t the analysis f business impact f failure f infrmatin security; Check the permissins fr access t infrmatin; Risk Management Infrmatin Security. Infrmatin is crucial t the supply chain management. Withut it, n decisin can be taken. Thus, it must be prtected against unauthrized access, nn-availability and alteratin. It is recmmended t establish clear and realistic prcedures t ensure the three critical pillars f security: Cnfidentiality,; Integrity and Availability Assets and Cnfiguratin Management Asset & cnfiguratin management prcess manage all the infrmatin cncerning the services and cmpnents that are used r required by the custmer. T identify, mnitr, recrd, reprt, audit and check the cnfiguratin f services and infrastructure, including their attributes and relatinships; T maintain accurate cnfiguratin infrmatin in the histrical state f planned and existing services and infrastructure; T prtect the integrity f assets and services cnfiguratin elements in ensuring that nly authrized cmpnents are deplyed. Supply chain management can use this prcess t build infrmatin based n the lgistics structure (strage, transprt, distance between tw repsitries, etc) and the elements that cntribute t custmer satisfactin whether internally r externally. Indeed the ERP riented lgistics have advanced functins fr managing the physical structure f the cmpany. It s pssible t mdel the cncepts like lgistical rganizatin, stres and lcatins. The static r dynamic lcatin cncept is als supprted Change Management Change Management is dedicated t applying the methds, prcedures and best practices fr implementing changes in the services and / r infrastructure prvided. T use standardized methds and prcedures fr efficient management and enable rapid changes t be made with minimal disruptin;

8 362 T save all changes in management cnfiguratin; T recrd, assess, allw, priritise preferences, plans, tests, implement, research and review any changes in a cntrlled manner. Strategical changes require mdificatins t be implemented t reach specific targets whilst minimizing expenses and risks. There are few plans that dn't invlve expenses, strategic risks r new initiatives. There are always expenses and risks linked t decisins such as the intrductin f new services, the access t the areas f new markets, and t serve new custmers. Examples f strategic changes: Juridical - the mdificatin f regulatin, rganizatinal changes and plicies and nrms. Having analyzed the changes f the business, the custmers and users activity mdels, the additin f a new service in the market place, updating the custmer s budget r revaluing cntracts, the changes f mdel supply, technlgical innvatin Prductin Management T create, test and prduce the skills and abilities t prvide the services specified by the design f the services and which will perfrm t the requirements f stakehlders t achieve their bjectives. T create, install, test and unfld the package f bet in prductin successfully and in allwed time; T ensure that any new r changed service answer the agreed service requirements; T reduce unfreseen impacts n services, peratins and supprt f prductin; T elabratin and definite the cmplete plans f deplyment and put int prductin; T ensure the cntentment f the custmers, users and the persnnel f the Management f services. Prduct design determines the prcess t prduce it. This prcess will be used t cntrl the finished prduct, its testing and marketing. The start f prductin relates t the lgistics namely: the release f a vehicle, perating a depsit r when assigning a task t a staff. This prcess is cincident with the cncept f prduct life cycle: Intrductin: we have t design the new prduct befre its intrductin t the market; Grwth: The prduct begins t gain market share which encurages cmpetitin t react; Maturity: The market becmes increasingly saturated; Decline: Custmers buy upgraded versins frm ther cmpetitrs Incident Management T restre service as quickly as pssible, t guarantee the best quality levels pssible and ensure the availability f the service. Incident management cvers any event which interrupts r culd interrupt a service, frm a pwer-cut t a fire. T identify all pssible risks t the system and prpse safety measures; T reduced dwntime f the service resulting in greater availability f service in a business and a small number f negative impacts; T increased the ability t align activities and allcate resurces dynamically t business pririties; T increased the ability t identify ptential imprvements t services; T increased the ability t identify service requirements r additinal training. This prcess can bring significant added value t the supply chain management, it can recrd and track any adverse event causing r likely t cause interruptin r degradatin f the service ffered t the custmer. It is respnsible fr the restratin f any service t increase custmer satisfactin. Incidents cncerning the supply chain can affect the lgistics, traffic accidents, stck uts, etc Prblem Management Prevent prblems and incidents that may result, t eliminate recurring incidents and t limit the impact f incidents that cannt be avided. T diagnse the cause f incidents t address the merits f the anmaly; T ensure that the implementatin f the reslutin is the apprpriate prcess in accrdance with (Change, etc); Build and maintain infrmatin abut the prblem, its cause and ways f wrking arund it;

9 363 Slving prblems by bringing the slutin amicable agreement. The cntributin f this prcess in the supply chain management can reduce the impact f recurring incidents and minimize the number f incidents, which alter the functining f services and reduce their quality. This prcess als helps t mnitr and understand the impact f any change. It als allws intervening practively t ensure the smth peratin f the service depending n the level f service agreed with the client. 4. Cnclusin ITIL prvided a repsitry f gd practices structured as interrelated prcesses t imprve business perfrmance and meet custmer requirements n n e hand and t clarify the strategic directin f the cmpany n anther. References [1] IT Service Management Accrding T The ITIL Framewrk Applied T The enterprise value chain. Abdelaâli HIMI, Samir BAHSANI, Alami SEMMAA in IJCSI. [2] Intrductin t Materails Management J.R. Tny Arnld, Stephen N. Chapman [3] [4] ITIL fr IT service best - Christan Munt - Editin Eyrlles [5] [6] Gervais M., 1995, "Business Strategies", Ecnmica [7] Methds f IT services, ITIL-based, businesses québéquises [8] Yves B Desfssés, Claude Y. Laprte, Alain April, Nabil Berrhuma [9] Service Management, an intrductin based n ITIL-ITSMF [10] ITIL V3 Service Operatin-Pascal Delbrayelle [11] The cncept f the value chain - [12] Recnciling strategic management with SMEs - marketing and ecnmic reality [13] In this paper we have emphasized the similarity between the tw cncepts f ITIL and APICS, it is pssible t design a new versin APICS based n the philsphy f ITIL t get mre perfrmance and frmalism. Indeed, the prcess: Demand management ; Supply management ; Catalgue management; Service level management ; Cntinuity management ; Availability management ; Security management ; Asset and cnfiguratin management ; Change management ; Release management ; Incident management ; Prblem management ; All f these culd bring greater value t the prcess f supply chain management bth in terms f prvisin f service supprt service. This new apprach, prpsed by this article - the pling f tw standards - culd be a reference t the deepening f participant research, including licenses: a new versin / expansin ITIL ffering innvative cncepts in the service f supply chain management; Redevelpment f functins ffered by the APICS visin with ITIL.