Business Driven Technology Armando V. Tauro,Ph.D. atauro@ju.edu atauro@geconsultinggropup.us PROJECT MANAGEMET PROJECT MANAGEMET Managing the Software Process 2 Explain Project management and identify the primary reasons projects fail. Explain the three different type of outsourcing along with the benefits and challenges Explain the three common the business forms Explain the list and describe the seven departments commonly found in most organizations Explain the different type business including a sole proprietorship, partnership or corporation Explain differentiate among automation, streamlining and reengineering Explain the six major category of hardware and provide an example of each Explain MIS infrastructure and its three primary types Managing the Software Process 3 Managing the Software Process 4 Managing the Software Process 5 Managing the Software Process 6 ¿Explain the three different type of outsourcing along with the benefits and challenges? Managing the Software Process 7 Managing the Software Process 8 Managing the Software Process 9 Managing the Software Process 10 Managing the Software Process 11 Managing the Software Process 12 Managing the Software Process 13 Managing the Software Process 14 Managing the Software Process 15 Managing the Software Process 16 Managing the Software Process 17 Managing the Software Process 18 11.1 What is Project Management? Project management encompasses all the activities needed to plan and execute a project: • Deciding what needs to be done • Estimating costs • Ensuring there are suitable people to undertake the project • Defining responsibilities • Scheduling • Making arrangements for the work • continued ... Managing the Software Process 19 What is Project Management? • Directing • Being a technical leader • Reviewing and approving decisions made by others • Building morale and supporting staff • Monitoring and controlling • Co-ordinating the work with managers of other projects • Reporting • Continually striving to improve the process Managing the Software Process 20 11.2 Software Process Models Software process models are general approaches for organizing a project into activities. • Help the project manager and his or her team to decide: —What work should be done; —In what sequence to perform the work. • The models should be seen as aids to thinking, not rigid prescriptions of the way to do things. • Each project ends up with its own unique plan. Managing the Software Process 21 The opportunistic approach First Prototy pe Modif y Until Satisf ied Think of Idea f or Improv ement Managing the Software Process 22 The waterfall model The Waterfall Model was the first Process Model to be introduced. It is also referred to as a linearsequential life cycle model. It is very simple to understand and use. In a waterfall model, each phase must be completed before the next phase can begin and there is no overlapping in the phases. Managing the Software Process 23 The Waterfall model The classic way of looking at S.E. that accounts for the importance of requirements, design and quality assurance The Waterfall model is the earliest SDLC approach that was used for software development. • The model suggests that software engineers should work in a series of stages. • Before completing each stage, they should perform quality assurance (verification and validation). • The waterfall model also recognizes, to a limited extent, that you sometimes have to step back to earlier stages. Managing the Software Process 24 The sequential phases in Waterfall model Requirement Gathering and analysis − All possible requirements of the system to be developed are captured in this phase and documented in a requirement specification document. System Design − The requirement specifications from first phase are studied in this phase and the system design is prepared. This system design helps in specifying hardware and system requirements and helps in defining the overall system architecture. Implementation − With inputs from the system design, the system is first developed in small programs called units, which are integrated in the next phase. Each unit is developed and tested for its functionality, which is referred to as Unit Testing. Integration and Testing − All the units developed in the implementation phase are integrated into a system after testing of each unit. Post integration the entire system is tested for any faults and failures. Deployment of system − Once the functional and non-functional testing is done; the product is deployed in the customer environment or released into the market. Maintenance − There are some issues which come up in the client environment. To fix those issues, patches are released. Also to enhance the product some better versions are released. Maintenance is done to deliver these changes in the customer environment. Managing the Software Process 25 Waterfall Model - Application Every software developed is different and requires a suitable SDLC approach to be followed based on the internal and external factors. Some situations where the use of Waterfall model is most appropriate are − • Requirements are very well documented, clear and fixed. • Product definition is stable. • Technology is understood and is not dynamic. • There are no ambiguous requirements. • Ample resources with required expertise are available to support the product. • The project is short. Managing the Software Process 26 Waterfall Model - Advantages The advantages of waterfall development are that it allows for departmentalization and control. A schedule can be set with deadlines for each stage of development and a product can proceed through the development process model phases one by one. Development moves from concept, through design, implementation, testing, installation, troubleshooting, and ends up at operation and maintenance. Each phase of development proceeds in strict order. Some of the major advantages of the Waterfall Model are as follows − • Simple and easy to understand and use • Easy to manage due to the rigidity of the model. Each phase has specific deliverables and a review process. • Phases are processed and completed one at a time. • Works well for smaller projects where requirements are very well understood. • Clearly defined stages. • Well understood milestones. • Easy to arrange tasks. • Process and results are well documented. Managing the Software Process 27 Waterfall Model - Disadvantages The disadvantage of waterfall development is that it does not allow much reflection or revision. Once an application is in the testing stage, it is very difficult to go back and change something that was not well-documented or thought upon in the concept stage. The major disadvantages of the Waterfall Model are as follows − • No working software is produced until late during the life cycle. • High amounts of risk and uncertainty. Not a good model for complex and object-oriented projects. • Poor model for long and ongoing projects. • Not suitable for the projects where requirements are at a moderate to high risk of changing. So, risk and uncertainty is high with this process model. • It is difficult to measure progress within stages. • Cannot accommodate changing requirements. • Adjusting scope during the life cycle can end a project. • Integration is done as a "big-bang. at the very end, which doesn't allow identifying any technological or business bottleneck or challenges early. Managing the Software Process 28 Agile Software Development • Agile Development: “based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizing, cross-functional teams. It promotes adaptive planning, evolutionary development and delivery, a time-boxed iterative approach, and encourages rapid and flexible response to change.” Managing the Software Process 29 AGILE Method and XP (Extreme Programming) Question: Has anyone heard of the “Agile” methodology? 30 Reengineering Periodically project managers should set aside some time to re-engineer part or all of the system • The extent of this work can vary considerably: —Cleaning up the code to make it more readable. —Completely replacing a layer. —Re-factoring part of the design. • In general, the objective of a re-engineering activity is to increase maintainability. • ¿Explain the three different type of outsourcing along with the benefits and challenges? Managing the Software Process 31 ¿Explain the three different type of outsourcing along with the benefits and challenges? Managing the Software Process 32 11.3 Cost estimation To estimate how much software-engineering time will be required to do some work. • Elapsed time —The difference in time from the start date to the end date of a task or project. • Development effort —The amount of labour used in person-months or person-days. —To convert an estimate of development effort to an amount of money: You multiply it by the weighted average cost (burdened cost) of employing a software engineer for a month (or a day). Managing the Software Process 33 Question Assume that I gave your group the task of figuring out how much time you needed to code your project because you were going sell it online. What are some techniques/ideas/concerns/thoughts you have for estimating the timing of a large project? i.e. How do you decide/figure out how long it takes you to do an assignment? Managing the Software Process 34 Principles of effective cost estimation Principle 1: Divide and conquer. • To make a better estimate, you should divide the project up into individual subsystems. • Then divide each subsystem further into the activities that will be required to develop it. • Next, you make a series of detailed estimates for each individual activity. • And sum the results to arrive at the grand total estimate for the project. Managing the Software Process 35 Principles of effective cost estimation Principle 2: Include all activities when making estimates. • The time required for all development activities must be taken into account. • Including: - Prototyping Design Inspecting Testing Debugging Writing user documentation Deployment. Managing the Software Process 36 Principles of effective cost estimation Principle 3: Base your estimates on past experience combined with knowledge of the current project. • If you are developing a project that has many similarities with a past project: — You can expect it to take a similar amount of work. • Base your estimates on the personal judgement of your experts or • Use algorithmic models developed in the software industry as a whole by analyzing a wide range of projects. —They take into account various aspects of a project’s size and complexity, and provide formulas to compute anticipated cost. Managing the Software Process 37 Algorithmic models Allow you to systematically estimate development effort. • Based on an estimate of some other factor that you can measure, or that is easier to estimate: —The number of use cases —The number of distinct requirements —The number of classes in the domain model —The number of widgets in the prototype user interface —An estimate of the number of lines of code Managing the Software Process 38 Principles of effective cost estimation Principle 4: Be sure to account for differences when extrapolating from other projects. • Different software developers • Different development processes and maturity levels • Different types of customers and users • Different schedule demands • Different technology • Different technical complexity of the requirements • Different domains • Different levels of requirement stability Managing the Software Process 39 Principles of effective cost estimation Principle 5: Anticipate the worst case and plan for contingencies. • Develop the most critical use cases first —If the project runs into difficulty, then the critical features are more likely to have been completed • Make three estimates: —Optimistic (O) - Imagining a everything going perfectly —Likely (L) - Allowing for typical things going wrong —Pessimistic - Accounting for everything that could go wrong Managing the Software Process 40 Principles of effective cost estimation Principle 6: Combine multiple independent estimates. • Use several different techniques and compare the results. • If there are discrepancies, analyze your calculations to discover what factors causing the differences. • Use the Delphi technique. —Several individuals initially make cost estimates in private. —They then share their estimates to discover the discrepancies. —Each individual repeatedly adjusts his or her estimates until a consensus is reached. Managing the Software Process 41 Principles of effective cost estimation Principle 7: Revise and refine estimates as work progresses • As you add detail. • As the requirements change. • As the risk management process uncovers problems. Managing the Software Process 42 11.4 Building Software Engineering Teams Software engineering is a human process. • Choosing appropriate people for a team, and assigning roles and responsibilities to the team members, is therefore an important project management skill • Software engineering teams can be organized in many different ways a) Egoless b) Chief programmer Managing the Software Process c) Strict hierarchy 43 Skills needed on a team • Architect • Project manager • Configuration management and build specialist • User interface specialist • Technology specialist • Hardware and third-party software specialist • User documentation specialist • Tester Managing the Software Process 44 11.5 Project Scheduling and Tracking • Scheduling is the process of deciding: —In what sequence a set of activities will be performed. —When they should start and be completed. • Tracking is the process of determining how well you are sticking to the cost estimate and schedule. Managing the Software Process 45 Some Basic Project Management Terminology •Deliverable: some concrete thing which is to be delivered, to the client or internally to the development team; e.g. • Specifications reports • Executable program • Source code •Task/Activity: something we have to do during the project; e.g. • Defining user requirements • Coding a module • Doing system testing •Each task or activity will take some length of time • • • • Referred to as duration of task Sometimes measured in days, weeks, etc. Sometimes measured in person-days, person-weeks, etc. Person-day = number of people X number of days —Example: 12 person days for writing all code could mean 1 person 12 days or 4 people 3 days —Note: not always true that a task that takes 1 programmer 12 days would take 12 programmers 1 day UWO Computer Science Department 46 Dependencies and Milestones •For a given task or activity, may be impossible to start it without some other task(s) or activity(ies) having been completed; e.g. • Cannot start coding without completing design • Cannot start system testing without completing code integration and test plan •If task B cannot start without A being completed, we say • B depends on A • There is a dependency between A and B •Milestone: some achievement which must be made during the project; e.g. • Delivering some deliverable • Completing some task •Note, delivering a deliverable may be a milestone, but not all milestones are associated with deliverables UWO Computer Science Department 47 Setting and Making Deadlines •Deadline time by which milestone has to be met • Some deadlines are set by the client • Others are set by us on project to make sure project stays on track •To set a deadline for completing task T, we must consider how long it will take to: • Complete the tasks that task T depends on • Complete task T itself •If we miss a deadline, we say (euphemistically) “the deadline has slipped” • This is virtually inevitable •Important tasks for project managers • Monitor whether past deadlines have slipped • Monitor whether future deadlines are going to slip • Allocate or reallocate resources to help make deadlines •PERT chart and Gantt charts help project managers do these things (among others) UWO Computer Science Department 48 PERT Chart Task Edges •Parts of a task/activity edge Task letter D 5 Task duration •Task letter: • Often keyed to a legend to tell which task it represents •Task duration = how long (e.g. days, hours) task will take UWO Computer Science Department 49 PERT Chart Event Nodes Event Number: Earliest Completion Time (ECT): Sequence number assigned Only task edges indicate dependencies 5 9 19 Earliest time this event can be achieved, given durations and dependencies Latest Completion Time (LCT): Latest time that this event could be safely achieved UWO Computer Science Department 50 PERT Charts •PERT = Project Evaluation and Review Technique •PERT chart = graphical representation of the scheduling of events in a project 6 •Sample PERT Chart: 3 1 0 0 A 4 2 4 4 B 2 C 3 E 3 10 4 7 7 D 3 10 5 10 6 F 13 13 3 •A PERT chart is a graph • Edges are tasks/activities that need to be done • Nodes are the events or milestones •Task edge T from event node E1 to event node E2 signifies: • Until event E1 happens, task T cannot be started • Until task T finishes, event E2 cannot happen •Events often simply represent completion of tasks associated with arrows entering it UWO Computer Science Department 51 Building a PERT Chart Steps: 1. 2. Make a list of all project tasks (and events if possible). Find interrelated task dependencies (what task has to be completed before other tasks) Draw initial PERT without durations, ECTs or LCTs Estimate duration of each task Fill in durations Calculate ECTs and LCTs 3. 4. 5. 6. •We will do this for an example system: → Generic software system with 3 modules UWO Computer Science Department 52 Example: Generic Software Project TASK ID A B C D E F G H I J Task Description Specification High Level Design Detailed Design Code/Test Main module Code/Test DB module Code/Test UI module Write test plan Integrate/System Test Write User Manual Typeset User Manual • To start PERT chart: identify dependencies between tasks UWO Computer Science Department 53 Dummy Tasks Sometimes it is necessary to use dummy tasks: • Shows the dependency between 2 events where no activity is performed Example: • Events 3, 4 signify the compilation of separate modules. • Create an event 5 to signify “all modules compiled together”. Denote dummy tasks using dash lines 3 9 10 5 4 UWO 9 12 9 12 T 3 Computer Science Department 54 Example: Tasks with Dependencies To start the PERT, identify the dependencies amongst tasks TASK ID A B C D E F G Task Description Preceed ID H I Specification High Level Design Detailed Design Code/Test Main Code/Test DB Code/Test UI Write test plan Dummy Task Dummy Task Dummy Task Integrate/System Test Write User Manual J Typeset User Manual UWO 1 2 3 4 4 4 4 5 6 7 8 8 10 Succ. ID 2 3 4 5 6 7 8 8 8 8 9 10 9 Computer Science Department 55 Project Life Cycle Conception: identify the need Feasibility analysis or study: costs benefits, and risks Planning: who, how long, what to do? Execution: doing the project Termination: ending the project Network Planning Techniques Program Evaluation & Review Technique (PERT): • Developed to manage the Polaris missile project • Many tasks pushed the boundaries of science & engineering (tasks’ duration = probabilistic) Critical Path Method (CPM): • Developed to coordinate maintenance projects in the chemical industry • A complex undertaking, but individual tasks are routine (tasks’ duration = deterministic) Both PERT and CPM Graphically display the precedence relationships & sequence of activities Estimate the project’s duration Identify critical activities that cannot be delayed without delaying the project Estimate the amount of slack associated with non-critical activities Network Diagrams Activity-on-Node (AON): • Uses nodes to represent the activity • Uses arrows to represent precedence relationships © Wiley 2007 Step 1-Define the Project: Cables By Us is bringing a new product on line to be manufactured in their current facility in existing space. The owners have identified 11 activities and their precedence relationships. Develop an AON for the project. Activity A B C D E F G H I J K Description Develop product specifications Design manufacturing process Source & purchase materials Source & purchase tooling & equipment Receive & install tooling & equipment Receive materials Pilot production run Evaluate product design Evaluate process performance Write documentation report Transition to manufacturing Immediate Duration Predecessor (weeks) None 4 A 6 A 3 B 6 D 14 C 5 E&F 2 G 2 G 3 H&I 4 J 2 Step 2- Diagram the Network for Cables By Us Step 3 (a)- Add Deterministic Time Estimates and Connected Paths Step 3 (a) (Con’t): Calculate the Project Completion Times Paths ABDEGHJK ABDEGIJK ACFGHJK ACFGIJK Path duration 40 41 22 23 The longest path (ABDEGIJK) limits the project’s duration (project cannot finish in less time than its longest path) ABDEGIJK is the project’s critical path Some Network Definitions All activities on the critical path have zero slack Slack defines how long non-critical activities can be delayed without delaying the project Slack = the activity’s late finish minus its early finish (or its late start minus its early start) Earliest Start (ES) = the earliest finish of the immediately preceding activity Earliest Finish (EF) = is the ES plus the activity time Latest Start (LS) and Latest Finish (LF) = the latest an activity can start (LS) or finish (LF) without delaying the project completion ES, EF Network LS, LF Network Calculating Slack Activity A B C D E F G H I J K Late Finish 4 10 25 16 30 30 32 35 35 39 41 Early Finish 4 10 7 16 30 12 32 34 35 39 41 Slack (weeks) 0 0 18 0 0 18 0 1 0 0 0 Revisiting Cables By Us Using Probabilistic Time Estimates Activity A B C D E F G H I J K Description Develop product specifications Design manufacturing process Source & purchase materials Source & purchase tooling & equipment Receive & install tooling & equipment Receive materials Pilot production run Evaluate product design Evaluate process performance Write documentation report Transition to manufacturing Optimistic time 2 3 2 4 12 2 2 2 2 2 2 Most likely Pessimistic time time 4 6 7 10 3 5 7 9 16 20 5 8 2 2 3 4 3 5 4 6 2 2 Using Beta Probability Distribution to Calculate Expected Time Durations A typical beta distribution is shown below, note that it has definite end points The expected time for finishing each activity is a weighted average optimistic + 4(mostlikely)+ pessimisti c Exp.time= 6 Calculating Expected Task Times ) optimistic + 4(mostlike ly + pe ssimis c Expe ctetime d = 6 Activity A B C D E F G H I J K Optimistic time 2 3 2 4 12 2 2 2 2 2 2 Most likely time 4 7 3 7 16 5 2 3 3 4 2 Pessimistic time 6 10 5 9 20 8 2 4 5 6 © Wiley 2007 2 Expected time 4 6.83 3.17 6.83 16 5 2 3 3.17 4 2 Network Diagram with Expected Activity Times Estimated Path Durations through the Network Activities on paths ABDEGHJK ABDEGIJK ACFGHJK ACFGIJK Expected duration 44.66 44.83 23.17 23.34 ABDEGIJK is the expected critical path & the project has an expected duration of 44.83 weeks Adding ES and EF to Network Gantt Chart Showing Each Activity Finished at the Earliest Possible Start Date Adding LS and LF to Network Gantt Chart Showing the Latest Possible Start Times if the Project Is to Be Completed in 44.83 Weeks Estimating the Probability of Completion Dates Using probabilistic time estimates offers the advantage of predicting the probability of project completion dates We have already calculated the expected time for each activity by making three time estimates Now we need to calculate the variance for each activity The variance of the beta probability distribution is: p −o   σ =   6  2 2 • where p=pessimistic activity time estimate o=optimistic activity time estimate Project Activity Variance Activity Optimistic Most Likely Pessimistic Variance A 2 4 6 0.44 B 3 7 10 1.36 C 2 3 5 0.25 D 4 7 9 0.69 E 12 16 20 1.78 F 2 5 8 1.00 G 2 2 2 0.00 H 2 3 4 0.11 I 2 3 5 0.25 J 2 4 6 0.44 K 2 2 2 0.00 © Wiley 2007 Variances of Each Path through the Network Path Number 1 Activities on Path A,B,D,E,G,H,J,k Path Variance (weeks) 4.82 2 A,B,D,E,G,I,J,K 4.96 3 A,C,F,G,H,J,K 2.24 4 A,C,F,G,I,J,K 2.38 Calculating the Probability of Completing the Project in Less Than a Specified Time When you know: • The expected completion time • Its variance You can calculate the probability of completing the project in “X” weeks with the following formula: specified time− pathexpected time  DT − EFP   z= =  2 pathstandard time  σP  Where DT = the specified completion date EFPath = the expected completion time of the path σPath2 = variance of path Example: Calculating the probability of finishing the project in 48 weeks Use the z values in Appendix B to determine probabilities  48we e ks  − 44.66we e ks e.g. probability for path 1 is  = 1.52 z =  4.82   Path Number Activities on Path Path Variance z-value (weeks) Probability of Completion 1 A,B,D,E,G,H,J,k 4.82 1.5216 0.9357 2 A,B,D,E,G,I,J,K 4.96 1.4215 0.9222 3 A,C,F,G,H,J,K 2.24 16.5898 1.000 4 A,C,F,G,I,J,K 2.38 15.9847 1.000 Reducing Project Completion Time Project completion times may need to be shortened because: • Different deadlines • Penalty clauses • Need to put resources on a new project • Promised completion dates Reduced project completion time is “crashing” Reducing Project Completion Time – con’t Crashing a project needs to balance • Shorten a project duration • Cost to shorten the project duration Crashing a project requires you to know • Crash time of each activity • Crash cost of each activity Crash cost/duration = (crash cost-normal cost)/(normal time – crash time) Reducing the Time of a Project (crashing) Activity Normal Time (wk) Normal Cost ($) Crash Time Crash Cost ($) Max. weeks Reduce cost of reduction per week A 4 8,000 3 11,000 1 3,000 B 6 30,000 5 35,000 1 5,000 C 3 6,000 3 6,000 0 0 D 6 24,000 4 28,000 2 2,000 E 14 60,000 12 72,000 2 6,000 F 5 5,000 4 6,500 1 1500 G 2 6,000 2 6,000 0 0 H 2 4,000 2 4,000 0 0 I 3 4,000 2 5,000 1 1,000 J 4 4,000 2 6,400 2 1,200 K 2 5,000 2 5,000 © Wiley 2007 0 0 Crashing Example: Suppose the Cables By Us project manager wants to reduce the new product project from 41 to 36 weeks. Crashing Costs are considered to be linear Look to crash activities on the critical path Crash the least expensive activities on the critical path first (based on cost per week) • • • • Crash activity I from 3 weeks to 2 weeks $1000 Crash activity J from 4 weeks to 2 weeks $2400 Crash activity D from 6 weeks to 4 weeks $4000 Recommend Crash Cost $7400 Question: Will crashing 5 weeks return more in benefits than it costs? Crashed Network Diagram The Critical Chain Approach The Critical Chain Approach focuses on project due dates rather than on individual activities and the following realities: • • • • Project time estimates are uncertain so we add safety time Multi-levels of organization may add additional time to be “safe” Individual activity buffers may be wasted on lower-priority activities A better approach is to place the project safety buffer at the end Original critical path Activity A Activity B Activity C Activity D Activity E Critical path with project buffer Activity A Activity B Activity C Activity D Activity E Project Buffer Adding Feeder Buffers to Critical Chains The theory of constraints, the basis for critical chains, focuses on keeping bottlenecks busy. Time buffers can be put between bottlenecks in the critical path These feeder buffers protect the critical path from delays in non-critical paths © Wiley 2007 Software Example: Skeleton PERT Chart 5 D 1 A 2 B 3 C E 4 6 8 H 9 I F 7 J 1 G Note: dummy tasks connecting events 5, 6 and 7 to 8 UWO Computer Science Department 89 Estimating Durations Suggestions for estimating durations of tasks: • Don’t just make up a number • Look at previous similar tasks from other projects and use those as guidelines • Try to identify factors such as difficulty, skill level —Each weighting factor will help you make a better estimate Factors to consider: • • • • • • Difficulty of task Size of team Experience of team Number, attitude and availability of end users Management commitment Other projects in progress UWO Computer Science Department 90 PERT Chart With Durations D 1 A 2 3 B 2 3 C 4 2 5 7 E 6 6 8 F 3 H 5 9 2I 7 J 1 1 G 2 •Say we have estimated durations of all tasks (in days) •New PERT chart, with durations filled in: •Note, dummy tasks (dashed lines) always have a duration of zero UWO Computer Science Department 91 Calculating ECTs ECT = earliest time event can be completed To calculate: • For an event not depending on others: ECT = 0 —Usually this is the first event • For an event E depending on one or more others: —Calculate ECTs of event(s) that E depends on —Add duration(s) of task(s) leading to E —If E depends on more than one event, take MAX Proceed left to right ( → ) through the chart Exercise: calculate the ECT for our example. UWO Computer Science Department 92 Calculating LCT LCT = latest time event can be completed, while still finishing last ask at indicated time To calculate: • For an event which no other events depend on: LCT = ECT —Generally there will only be one such event • For an event E which one or more others depend on: —Calculate LCTs of event(s) that depend on E —Subtract duration(s) of task(s) leading from E —If more than one event depends on E, take MINIMUM Proceed right to left (  ) through PERT chart Exercise: calculate LCT for our example UWO Computer Science Department 93 Critical Path Red line is the critical path What does it represent? UWO Computer Science Department 94 Uses of PERT Charts We can use PERT charts for: • Determining the estimated time to complete a project • Deriving actual project dates • Allocating resources • Identifying potential and current problems (is one task behind schedule?, can we shuffle people?) Critical Path: Path through chart such that if any deadline slips, the final deadline slips (where all events have ECT = LCT (usually there is only one) In software example: • Task I is not on the critical path: even if we don’t finish it until time 18, we’re still okay • Task D is on the critical path: if we don’t finish it until for example, time 16, then: —We can’t start task H (duration 3) until time 16 —So we can’t complete task H until time 21 We can use PERT charts for • Identifying the critical path • Reallocating resources, e.g. from non-critical to critical tasks. UWO Computer Science Department 95 PERT Chart Exercise Task Prec Tasks Description A B C D E F G H I J K L M N O none A A C D D E F H, G B J, I K K L M UWO decide on date for party book bouncy castle send invitations receive replies buy toys and balloons buy food blow up balloons make food decorate get bouncy castle have party clean up send back bouncy castle send thank you letters donate unwanted gifts Computer Science Department Time(hrs) 1 1 4 7 1 3 2 1 1 1 1 4 1 3 3 96 PERT Chart Exercise Draw the PERT chart for the preceding slide and identify the critical path UWO Computer Science Department 97 Gantt Charts •Graphical Representation of a schedule •Helps to plan, coordinate and track specific tasks in a project •Named after Henry Gantt who invented them in 1917 •Depicts some of the same information as on a PERT chart •Also depicts new information UWO Computer Science Department 98 Example Gantt Chart TASKS A Study current email system B Define end-user requirements C Design Class diagram D Acquire computer technology E Plan & code email modules F Acceptance test new system G Deliver new system Questions: From the above, can you guess: 1 2 3 4 5 Today 6 7 8 9 10 11 12 •Which, if any, tasks should have been completed by today and aren’t even started? ______ •Which, if any, tasks have been completed? ______ •Which, if any, tasks have been completed ahead of schedule:? ______ •Which, if any, tasks are on or ahead of schedule? _________ •Which, if any, tasks are behind schedule? ________ UWO Computer Science Department 99 Building and Using a Gantt Chart Steps for building a Gantt Chart 1. 2. 3. 4. 5. Identify the tasks to be scheduled Determine the durations of each task List each task down the vertical axis of chart 1. In general, list tasks to be performed first at the top and then move downward as the tasks will happen Use horizontal axis for the dates Determine start and finish dates for activities 1. Consider which tasks must be completed or partially completed before the next task To use the Gantt chart to report progress: • • • If the task has been completed, completely shade in the bar corresponding to the task If the task has been partially completed, shade in the percentage of the bar that represents the percentage of the task that has been completed Unshaded bars represents tasks that have not been started. UWO Computer Science Department 100 Gantt Chart: Exercise Task A B C D E F G H I J K L M N O Prec Tasks Description none A A C D D E F H, G B J, I K K L M UWO decide on date for party book bouncy castle send invitations receive replies buy toys and balloons buy food blow up balloons make food decorate get bouncy castle have party clean up send back bouncy castle send thank you letters donate unwanted gifts Computer Science Department Time(hrs) 1 1 4 7 1 3 2 1 1 1 1 4 1 3 3 101 Gantt Chart: Exercise Draw the Gantt chart using the following criteria: • label hours 0 to 30 across the horizontal axis • Mark a review stage at hour 14 to monitor the progress • Assume and illustrate that tasks A, B, C and D have been completed at hour 14 • State which tasks are ahead and which tasks are behind schedule • NOTE: if you are using MS Project and want a different unit of time, just type 2 hours (instead of 2 days). ALSO, if you want to have a milestone, like Handing in Group Assignment 1, then give it a ZERO duration. UWO Computer Science Department 102 Your Gantt chart: UWO Computer Science Department 103 PERT vs. Gantt PERT chart • All us to show dependencies explicitly • Allow us to calculate critical path • Can tell us how one task falling behind affects other tasks Gantt charts • Allow us to record progress of project • Allow us to see what tasks are falling behind • Allow us to represent overlapping tasks Project Management Tools, e.g. MS Project • Allow us to specify tasks, dependencies, etc • Allow us to specify progress on tasks, etc • Can generate either PERT or Gantt charts (whichever we want) from data entered UWO Computer Science Department 104 Bouncy Castle PERT Example using MS Project Managing the Software Process 105 Bouncy Castle Gantt Example using MS Project In MS Project set the task length to be 0 to get a milestone Managing the Software Process 106 11.7 Difficulties and Risks in Project Management • Accurately estimating costs is a constant challenge —Follow the cost estimation guidelines. • It is very difficult to measure progress and meet deadlines —Improve your cost estimation skills so as to account for the kinds of problems that may occur. —Develop a closer relationship with other members of the team. —Be realistic in initial requirements gathering, and follow an iterative approach. —Use earned value charts to monitor progress. Managing the Software Process 107 Difficulties and Risks in Project Management • It is difficult to deal with lack of human resources or technology needed to successfully run a project —When determining the requirements and the project plan, take into consideration the resources available. —If you cannot find skilled people or suitable technology then you must limit the scope of your project. Managing the Software Process 108 Difficulties and Risks in Project Management • Communicating effectively in a large project is hard —Take courses in communication, both written and oral. —Learn how to run effective meetings. —Review what information everybody should have, and make sure they have it. —Make sure that project information is readily available. —Use ‘groupware’ technology to help people exchange the information they need to know Managing the Software Process 109 Difficulties and Risks in Project Management • It is hard to obtain agreement and commitment from others —Take courses in negotiating skills and leadership. —Ensure that everybody understands - The position of everybody else. - The costs and benefits of each alternative. - The rationale behind any compromises. —Ensure that everybody’s proposed responsibility is clearly expressed. —Listen to everybody’s opinion, but take assertive action, when needed, to ensure progress occurs. Managing the Software Process 110 Review Draw a PERT Chart for the following activities: Activity Description Predecessor Estimated Time A Drive home None 0.5 B Wash Clothes A 4.0 C Pack B 0.5 D Go to bank A 1.0 E Pay bill D 0.5 F Pack car C,E 0.5 G Drive to bus F 0.5 Managing the Software Process 111 Business Driven Technology Armando V. Tauro,Ph.D. atauro@ju.edu atauro@geconsultinggropup.us Business Driven Technology Unit One: Achieving Business Success Assignment 13 Chapter 13 Business Drive Technology Definitions Performance trajectory – the rate at which the performance of a product has improved, and is expected to improve, over time Sustaining technologies – tend to maintain a rate of improvement; that is, they give customers something more or better in the attributes they already value Disruptive technologies – introduce a very different package of attributes from the one mainstream customers historically value, and they often perform far worse along one or two dimensions that are particularly important to those customers. Performance trajectory – the rate at which the performance of a product has improved, and is expected to improve, over time Disruptive Technology The Impact of Sustaining and Disruptive Technological Change Product Performance Progress due to Sustaining technologies Performance demanded at the high end of the market Performance demanded at the low end of the market Disruptive technological innovation Time Source: C. Christensen, The Innovator’s Dilemma Value Networks “A company’s revenue and cost structures play a critical role in the way it evaluates proposed technological innovations.” • Value network – the context within which a firm identifies and responds to customers’ needs, solves problems, procures input, reacts to competitors, and strives for profit • “Within a value network, each firm's competitive strategy, and particularly its past choice of markets, determines its perceptions of the economic value of new technology.” Sample Value Network Portable Personal Computing Word processing and spreadsheet software CISC microprocessor Thin-film disks Zenith Toshiba Dell Connor Quantum Western Digital Applied Magnetics Notebook Computers 2.5-inch Disk Drives Metal-inGap Ferrite Heads Light and compact Rugged Easy to use Ruggedness Low power consumption Low profile Cost Availability in high unit volumes Modems, etc. Displays, etc. AT/SCSI embedded interface, etc. Skunkworks “The strategy of forming small teams into skunk-works projects to isolate them from the stifling demands of mainstream organizations is widely known but poorly understood.” “Creating a separate organization is necessary only when the disruptive technology has a lower profit margin than the mainstream business and must serve the unique needs of a new set of customers.” What’s Wrong with this Picture? The Impact of Sustaining and Disruptive Technological Change Product Performance Progress due to Sustaining technologies Performance demanded at the high end of the market Disruptive technological innovation No technology, no market Disruption at bottom of market Performance demanded at the low end of the market Time Source: C. Christensen, The Innovator’s Dilemma Improved Picture The Impact of Sustaining and Disruptive Technological Change Product Performance Progress due to Sustaining technologies Performance demanded at the high end of the market Disruptive technological innovation Performance demanded at the low end of the market Time Source: C. Christensen, The Innovator’s Dilemma Blockchain Technology Introduction to e-commerce Amazon.com: Before and After ▪ ▪ ▪ ▪ Most well-known e-commerce company Conceived by Jeff Bezos in 1994 Opened in July 1995 Four compelling reasons to shop ▪ ▪ ▪ ▪ Selection (1.1 million titles at its opening time) Convenience (anytime, anywhere) Price (high discounts on bestsellers) Service (one-click shopping, automated order confirmation, tracking, and shipping information) 36 Amazon.com: Before and After Revenues and Earnings Revenues Earnings 1996 $15.6 Million ($6.24 Million) 1997 $148 Million ($31 Million) 1998 $610 Million ($125 Million) 1999 $1.6 Billion ($720 Million) 2000 $2.7 Billion ($1.4 Billion) 2008 Million $19.16 Billion $645 Losses No profit until 2001: $5M 37 E-commerce vs. E-business E-commerce involves ▪ ▪ ▪ Digitally enabled commercial transactions between organizations and individuals. Digitally enabled transactions include all transactions mediated by digital technology Commercial transactions involve the exchange of value across organizational or individual boundaries in return for products or services 38 E-commerce vs. E-business E-business involves ▪ Digital enablement of transactions and processes within a firm, involving information systems under the control of the firm ▪ E-business does not involve commercial transactions across organizational boundaries where value is exchanged 39 The Difference Between Ecommerce and E-Business 40 Seven Unique Features of E-commerce Technology and Their Business Significance 41 The Internet and the Evolution of Corporate Computing 42 Disciplines Concerned with ECommerce 43 Major Types of E-Commerce 44 Major Types of E-Commerce ▪ Market relationships ▪ Business-to-Consumers (B2C) ▪ Business-to-Business (B2B) ▪ Consumer-to-Consumer (C2C) ▪ Technology-based ▪ Peer-to-Peer (P2P) ▪ Mobile Commerce (M-commerce) 45 Business-to-Consumer E-commerce ▪ ▪ Most commonly discussed type Online businesses attempt to reach individual consumers 46 The Growth of B2C E-Commerce Europe is expected to reach €263M by 2011 (Forrester report, 2006) 47 Business-to-Business E-commerce ▪ ▪ ▪ ▪ Businesses focus on sell to other businesses Largest form of e-commerce Primarily involved inter-business exchanges at first Other models have developed ▪ e-distributors ▪ infomediaries ▪ B2B service providers 48 The Growth of B2B E-Commerce 49 Consumer-to-Consumer E-commerce ▪ ▪ ▪ Provide a way for consumers to sell to each other Estimated $5 billion market Consumer: ▪ prepares the product for market ▪ places the product for auction or sale ▪ relies on market maker to provide catalog, search engine, and transaction clearing capabilities 50 Peer-to-Peer E-commerce ▪ ▪ ▪ Enables Internet users to share files and computer resources Napster (early example) Skype (more modern and successful example) 51 Mobile E-commerce ▪ ▪ ▪ Wireless digital devices enable transactions on the Web Uses personal digital assistants (PDAs) to connect Used most widely in Japan and Europe 52 Web Access Via Wireless Devices in the United States 53 Technology and E-Commerce in Perspective Although e-commerce has grown explosively, there is no guarantee it will continue to grow 54 E-Commerce I and II ▪ E-Commerce I (1995-2000) ▪ Explosive growth starting in 1995 ▪ Widespread of Web to advertise products ▪ Ended in 2000 when dot.com began to collapse ▪ E-Commerce II (2001-2006) ▪ Began in January 2001 ▪ Reassessment of e-commerce companies 55 E-Commerce II 2001-2006 ▪ ▪ ▪ Crash in stock market values of E-commerce I companies throughout 2000 is an end to Ecommerce I Led to a sobering reassessment of the prospects of e-commerce and the methods of achieving business success. E-commerce II begins in 2001 and ends five year later -- the limit for making technology and business projections 56 E-Commerce II 2001-2006 ▪ Reasons for the end of E-Commerce I ▪ run-up in technology stocks due to enormous information technology capital expenditure of firms rebuilding their internal business systems to withstand Y2K ▪ telecommunications industry had built excess capacity in highspeed fiber optic networks ▪ 1999 e-commerce Christmas season provided less sales growth that anticipated and demonstrated e-commerce was not easy (eToys.com) ▪ valuations of technology companies had risen so high supporters were questioning whether earnings could justify the prices of the shares. 57 E-Commerce I and E-Commerce II Compared 58 E-Commerce Business Models • Business model – • a set of planned activities designed to result in a profit in a marketplace E-commerce business model – a business model that aims to use and leverage the unique qualities of the Internet and the World Wide Web. 59 Eight Key Ingredients of a Business Model Table 2.1 60 Eight Key Ingredients of a Business Model: Value Proposition ▪ ▪ Defines how a company’s product or service fulfills the needs of customers. Questions ▪ Why will customers choose to do business with your firm instead of another company? ▪ What will your firm provide that other firms do not and cannot? 61 Eight Key Ingredients of a Business Model: Revenue Model ▪ ▪ Describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital. E-commerce revenue models include: ▪ advertising model ▪ subscription model ▪ transaction fee model ▪ sales model ▪ affiliate model 62 Eight Key Ingredients of a Business Model: Revenue Model ▪ Advertising revenue model ▪ a company provides a forum for advertisements and receives fees from advertisers (Yahoo) ▪ Subscription revenue model ▪ a company offers it users content or services and charges a subscription fee for access to some or all of it offerings (Consumer Reports or Wall Street Journal) 63 Eight Key Ingredients of a Business Model: Revenue Model ▪ Transaction fee revenue model ▪ a company receives a fee for enabling or executing a transaction (eBay or E-Trade) ▪ Sales revenue model ▪ a company derives revenue by selling goods, information, or services (Amazon or DoubleClick) ▪ Affiliate revenue model ▪ a company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales (MyPoints) 64 Five Primary Revenue Models Table 2.2 65 Eight Key Ingredients of a Business Model: Market Opportunity ▪ Market opportunity ▪ refers to the company’s intended marketspace and the overall potential financial opportunities available to the firm in that market space ▪ defined by the revenue potential in each of the market niches where you hope to compete ▪ Marketspace ▪ the area of actual or potential commercial value in which a company intends to operate 66 Eight Key Ingredients of a Business Model: Competitive Environment ▪ ▪ Refers to the other companies operating in the same marketplace selling similar products Influenced by: ▪ how many competitors are active ▪ how large are their operations ▪ the market share of each competitor ▪ how profitable these firms are ▪ how they price their products 67 Marketspace and Market Opportunity in the Software Training Market Figure 2.1 Your realistic market opportunity will focuss on one or a few market segments 68 Eight Key Ingredients of a Business Model: Competitive Advantage ▪ ▪ Achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors Achieved because a firm has been able to obtain differential access to the factors of production that are denied their competitors -- at least in the short term 69 Eight Key Ingredients of a Business Model: Competitive Advantage ▪ Asymmetry ▪ exists whenever one participant in a market has more resources than other participants ▪ First mover advantage ▪ a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service 70 Eight Key Ingredients of a Business Model: Competitive Advantage ▪ Unfair competitive advantage ▪ occurs when one firm develops an advantage based on a factor that other firms cannot purchase ▪ Perfect Market ▪ a market in which there are no competitive advantages or asymmetries because all firms have equal access to all the factors of production ▪ Leverage ▪ when a company uses its competitive advantage to achieve more advantage in surrounding markets 71 Eight Key Ingredients of a Business Model: Market Strategy ▪ ▪ The plan you put together that details exactly how you intend to enter a new market and attract new customers Best business concepts will fail if not properly marketed to potential customers 72 Eight Key Ingredients of a Business Model: Organizational Development ▪ ▪ ▪ Describes how the company will organize the work that needs to be accomplished Work is typically divided into functional departments Move from generalists to specialists as the company grows 73 Eight Key Ingredients of a Business Model: Management Team ▪ ▪ ▪ ▪ Employees of the company responsible for making the business model work Strong management team gives instant credibility to outside investors A strong management team may not be able to salvage a weak business model Should be able to change the model and redefine the business as it becomes necessary 74 Major Business-to-Consumer (B2C) Business Models Table 2.3 75 Major Business-to-Consumer (B2C) Business Models Table 2.3 continued 76 Major Business-to-Consumer (B2C) Business Models ▪ Portal ▪ offers powerful search tools plus an integrated package of content and services ▪ typically utilizes a combines subscription/advertising revenues/transaction fee model ▪ may be general or specialize (vortal) 77 Major Business-to-Consumer (B2C) Business Models ▪ E-tailer ▪ online version of traditional retailer ▪ includes ▪ virtual merchants (online retail store only) ▪ clicks and mortar e-tailers (online distribution channel for a company that also has physical stores) ▪ catalog merchants (online version of direct mail catalog) ▪ online malls (online version of mall) ▪ Manufacturers selling directly over the Web 78 Major Business-to-Consumer (B2C) Business Models ▪ Content Provider ▪ information and entertainment companies that provide digital content over the Web ▪ typically utilizes an advertising, subscription, or affiliate referral fee revenue model ▪ Transaction Broker ▪ processes online sales transactions ▪ typically utilizes a transactions fee revenue model 79 Major Business-to-Consumer (B2C) Business Models ▪ Market Creator ▪ uses Internet technology to create markets that bring buyers and sellers together ▪ typically utilizes a transaction fee revenue model ▪ Service Provider ▪ offers services online ▪ Community Provider ▪ provides an online community of like-minded individuals for networking and information sharing ▪ revenue is generated by referral fee, advertising, and subscription 80 Insight on Technology: Goggle.com -- Searching for Profits ▪ ▪ ▪ Web’s hottest search engine Started in 1998 by two enterprising Stanford grad students Uses outside criteria to validate that a search result is likely to be relevant ▪ the more outside links there are to a particular page, the higher it jumps in Google’s ranking structure 81 Major Business-to-Business (B2B) Business Models Table 2.4 82 Major Business-to-Business (B2B) Business Models ▪ B2B Hub ▪ also known as marketplace/exchange ▪ electronic marketplace where suppliers and commercial purchasers can conduct transactions ▪ may be a general (horizontal marketplace) or specialized (vertical marketplace) ▪ E-distributor ▪ supplies products directly to individual businesses 83 Major Business-to-Business (B2B) Business Models ▪ B2B Service Provider ▪ sells business services to other firms ▪ Matchmaker ▪ links businesses together ▪ charges transaction or usage fees ▪ Infomediary ▪ gather information and sells it to businesses 84 Insight on Business: E-Steel.com Breaks the Mold ▪ ▪ ▪ B2B marketplace 3,500 member companies trading globally Uses private negotiation model rather than auction model 85 Business Models in Other Emerging Areas of E-Commerce Table 2.5 86 Business Models in Other Emerging Areas of E-Commerce ▪ C2C Business Models ▪ connect consumers with other consumers ▪ most successful has been the market creator business model ▪ P2P Business Models ▪ enable consumers to share file and services via the Web without common servers ▪ a challenge to find a revenue model that work ▪ Skype !! 87 Business Models in Other Emerging Areas of E-Commerce Figure 2.2 88 Business Models in Other Emerging Areas of E-Commerce ▪ M-commerce Business Models ▪ traditional e-commerce business models leveraged for emerging wireless technologies to permit mobile access to the Web ▪ E-commerce Enablers’ Business Models ▪ focus on providing infrastructure necessary for e-commerce companies to exist, grow, and prosper 89 E-commerce Enablers Table 2.6 90 SQUIZZ.com? Introduction to the Social Ecommerce Platform THE INFORMATION AGE IN WHICH YOU LIVE Changing the Face of Business McGraw-Hill © 2008 The McGraw-Hill Companies, Inc. All rights reserved. MIS to Improve Business Process 1-2 Essentials of Management Information Systems The Role of Information Systems in Business Today What’s New in MIS? New technologies Cloud computing Software as a service (SaaS) Mobile digital platform People and behavior changes Managers use social networks, collaboration. Employees have access to powerful decision aids. Virtual meetings are accepted and used. Organizations Web 2.0 applications widely adopted Telework gains momentum Co-creation of value, collaboration across firms 1-3 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Types of Information Systems 1-4 2-1 Figure Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Different Kinds of Systems Three main categories of information systems serve different organizational levels: 1. Operational-level systems: support operational managers, keeping track of the elementary activities and transactions 2. Management-level systems: serve the monitoring, controlling, decision-making, and administrative activities 3. Strategic-level systems: help senior management tackle and address strategic issues 1-5 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Major Types of Systems • Transaction Processing Systems (TPS) • Management Information Systems (MIS) • Decision-Support Systems (DSS) • Executive Support Systems (ESS) 1-6 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS The Four Major Types of Information Systems 1-7 2-2 Figure Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Transaction Processing Systems (TPS) • Basic business systems that serve the operational level • A computerized system that performs and records the daily routine transactions necessary to the conduct of the business 1-8 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Payroll TPS Figure 1-9 2-3 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Typical Applications of TPS Figure 1-10 2-4 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) Management level • Inputs: High volume transaction level data • Processing: Simple models • Outputs: Summary reports • Users: Middle managers Example: Annual budgeting 1-11 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) Figure 1-12 2-5 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) A sample MIS report Figure 1-132-6 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Decision-Support Systems (DSS) Management level • Inputs: Transaction level data • Processing: Interactive • Outputs: Decision analysis • Users: Professionals, staff Example: Contract cost analysis 1-14 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Decision-Support Systems (DSS) Voyage-estimating decision-support system Figure 1-15 2-7 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS EXECUTIVE SUPPORT SYSTEMS (ESS): • Inputs: Aggregate data • Processing: Interactive • Outputs: Projections • Users: Senior managers Example: 5 year operating plan 1-16 Management Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Relationship of Systems to One Another Interrelationships among systems Figure 1-172-9 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES The Order Fulfillment Process Figure 1-18 2-12 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems • Enterprise systems, also known as enterprise resource planning (ERP) systems provides a single information system for organization-wide coordination and integration of key business processes • Information that was previously fragmented in different systems can seamlessly flow throughout the firm so that it can be shared by business processes in manufacturing, accounting, human resources, and other areas 1-19 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Application Architecture Figure 1-20 2-13 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Traditional "Silo" View of Information Systems Within the business: • There are functions, each having its uses of information systems Outside the organization’s boundaries: • There are customers and vendors Functions tend to work in isolation 1-21 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Traditional View of Systems Figure 1-222-14 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems Figure 1-232-15 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Benefits of Enterprise Systems • Help to unify the firm's structure & organization: One organization • Management: Firm wide knowledge-based management processes • Technology: Unified platform • Business: More efficient operations & customerdriven business processes 1-24 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Challenges of Enterprise Systems • Difficult to build: Require fundamental changes in the way the business operates • Technology: Require complex pieces of software and large investments of time, money, and expertise • Centralized organizational coordination and decision-making: Not the best way for the firms to operate 1-25 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) • Close linkage and coordination of activities involved in buying, making, and moving a product • Integrates supplier, manufacturer, distributor, and customer logistics time • Reduces time, redundant effort, and inventory costs • Network of organizations and business processes 1-26 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) • Helps in procurement of materials, transformation of raw materials into intermediate and finished products • Helps in distribution of the finished products to customers • Includes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller 1-27 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management Systems Figure 1-282-16 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Information from Supply Chain Management Systems helps firms: • Decide when and what to produce, store, and move • Rapidly communicate orders • Track the status of orders • Check inventory availability and monitor inventory levels 1-29 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Information from Supply Chain Management Systems helps firms: • Reduce inventory, transportation, and warehousing costs • Track shipments • Plan production based on actual customer demand • Rapidly communicate changes in product design 1-30 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) • Manages all ways used by firms to deal with existing and potential new customers • Business and technology discipline • Uses information system to coordinate entire business processes of a firm 1-31 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) • Provides end to end customer care • Provides a unified view of customer across the company • Consolidates customer data from multiple sources and provides analytical tools for answering questions 1-32 Management Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) Figure 1-33 2-17 Primary Types of Business Change 1-34 Process Improvement Model 1-35 Business Must Drive Technology 1-36 Business Must Drive Technology 1. 2. 3. 4. Assess state of competition and industry pressures affecting your organization Determine business strategies to address competitive and industry pressures Identify business processes to support your chosen business strategies Align technology tools with those business processes NEVER DO THIS IN REVERSE!! 1-37 MANAGEMENT INFORMATION SYSTEMS ⚫ ⚫ MIS – planning for, development, management, and use of IT tools to help people perform all tasks related to information processing and management Three key resources in MIS 1. 2. 3. Information People Information technology 1-38 Information Resource ⚫ Business intelligence (BI) – collective information about… ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ Customers Competitors Business partners Competitive environment BI is information on steroids BI can help you make important, strategic decisions 1-39 Information Resource – Organizational Perspective 1-40 Business Process Management The Need for BPM McGraw-Hill © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Complexity exists internally within organizations…… Insurance Carrier Auto LOB Internal Employees Finance Commercial LOB Home LOB 42 Sales Marketing ….and externally within the broader business network Companies need end-to-end process management To orchestrate human tasks… … to increase visibility… Partners & Re-insurers Agents & Producers Insurance Carrier Internal Employees Consumers Auto LOB Commercial LOB Consumers Home LOB Financial Institutions Outsourced Service Providers … to manage exceptions and cases… DMV 3rd Party Services … and for scalable transactions… … everything you need to manage end-to-end business networks 45 Transformation is Not Optional Excellence is a Moving Target 47 Can Your Processes Handle Change, Uncertainty and Complexity? Transformation Today Means: ▪ Simpler Business Led Change ▪ Full Process Visibility and Governance ▪ Optimized Processes and Decisions Agile Processes and Decisions with Business Process Management 48 Business leaders must drive growth amidst complexity Capitalize on complexity and Outmaneuver competitors Innovation ▪ 81% believe innovation is key to getting closer to their customers New Channels ▪ 70% are focusing on new channels to deliver services to their customers Collaboration ▪ 69% are collaborating with customers to deliver better products and services 49 Source: IBM CEO Study, 2010 Defining BPM 1-50 What is Business Process Management ? Through robust and flexible software capabilities and industry expertise, BPM enables customers to discover, model, execute, rapidly change, govern, and gain end-to-end visibility on their business processes Documentation & Compliance Deployment & Execution Software Expertise Continuous Process Improvement Analysis & Optimization 51 Visibility & Collaboration Business User Engagement Efficiency & Productivity Typical process problems Customer Service Account Administration Finance and Ops 1 1. Unstructured Tasks and Communication (ex Paper or email) 2 2. Inefficient Working Environment Spans Systems 3 3. Inconsistent Prioritization 4 4. Incomplete or Inaccurate Data Flow Between Systems 5 5. Lack of Control Over System and Business Events (Exceptions) 6 6. Poor Visibility Into Process Performance Executive 6 Management 1 3 Invoice Reconciliation Teams 2 4 5 52 BPM brings order to the chaos Finance and Ops Executive Management Account Administration 1. 1 Automate workflow & decision making 2. 2 Reduce errors and improve consistency 3. 3 Standardize resolution across geographies 4. 4 Leverage existing systems and data 5 5. Monitor for business events and initiate actions Risk Management Teams Customer Service 6 6. Real-time visibility and process control Customer Benefits: 53 • Huge Reduction in Manual Work, Errors • Faster, More Consistent Issue Resolution • Easier to Manage the Business • Consistent Case Handling BPM streamlines human tasks Business Process Receive Order Start Process 1st Review Task Assign Work Complete 1st Review 2nd Review 2nd Review Task Final Review Task Final Rev. Results Assign Work Complete Assign Work Complete Create ad-hoc Task / Results Create Review Summary Reply 54 Human Task Implementations Info Request Task Assign Work Complete BPM Differentiators Deliver on your business promises Reduce complexity, automate processes and boost productivity Simplicity Simplifies operations and improves entire experience Easy enough to engage all process participants Visibility Centralizes visibility and control Empowers knowledge workers with built-in real time analytics to optimize business processes 55 Power Powerful, dependable for mission critical processes Scales smoothly and easily from initial project to enterprise-wide program Governance Achieve consistency and repeatability to ensure processes execute as designed Simplify life-cycle management of process applications across 1000s of projects The essential BPM capabilities Customer Service Finance and Ops Risk Management Teams Account Administration Executive Management • Modeling • Monitoring • Automation • Governance • Optimization • Rules • Information • Cases • Events • Integration • Collaboration 56 • Analytics Eliminate steps. Eliminate mistakes Modeling increases collaboration between business and IT Aligned IT and Business result in DOUBLE the productivity gains of isolated efforts* Increase collaboration with a common language for Business and IT to work together Identify high priority projects through process discovery Optimize processes to maximize value through simulation and analysis Consistently execute processes with a single, complete and authoritative view Business IT 57 *Source: London School of Economics – McKinsey survey and analysis of 100 companies in France, Germany, UK and US Information Technology – Hardware 1-58 Information Technology – Hardware 1. 2. 3. 4. 5. 6. Input device – tool for entering information and commands Output device – tool for see or hearing results Storage device – tool for storing information CPU – hardware that interprets and executes instructions (RAM temporarily stores information and software for the CPU) Telecommunications device – for sending info Connecting devices – like cables, ports, etc. 1-59 Information Technology – Software ⚫ ⚫ ⚫ Two types of software Application software – enables you to solve specific problems and perform specific tasks (Word, payroll, inventory management, etc) System software – handles tasks specific to technology management (operating system, antivirus, etc) See Extended Learning Module A for a review of IT hardware and software 1-60 PORTER’S FIVE FORCES MODEL ⚫ The Five Forces Model helps business people understand the relative attractiveness of an industry and the industry’s competitive pressures in terms of 1. 2. 3. 4. 5. Buyer power Supplier power Threat of substitute products or services Threat of new entrants Rivalry among existing competitors 1-61 PORTER’S FIVE FORCES MODEL 1-62 Buyer Power ⚫ ⚫ Buyer power – high when buyers have many choices and low when their choices are few Competitive advantages are created to get buyers to stay with a given company ⚫ ⚫ ⚫ ⚫ NetFlix – set up and maintain your movie list United Airlines – frequent flyer program Apple iTunes – buy/manage your music Dell – customize a computer purchase 1-63 Buyer Power ⚫ ⚫ ⚫ Competitive advantage – providing a product or service in a way that customers value more than what the competition is able to do First-mover advantage – significant impact on gaining market share by being the first to market with a competitive advantage All competitive advantages are fleeting ⚫ E.G., all airlines now have frequent flyer programs 1-64 Supplier Power ⚫ ⚫ Supplier power – high when buyers have few choices and low when choices are many The opposite of buyer power 1-65 Threat of Substitute Products and Services ⚫ ⚫ ⚫ Threat of substitute products and services – high when there are many alternatives for buyers and low when there are few alternatives Switching costs can reduce this threat Switching cost – a cost that makes buyers reluctant to switch to another product/service ⚫ ⚫ ⚫ Long-term contract with financial penalty Great service Personalized products based on purchase history 1-66 Threat of New Entrants ⚫ ⚫ Threat of new entrants – high when it is easy for competitors to enter the market and low when entry barriers are significant Entry barrier – product or service feature that customers have come to expect and that must be offered by an entering organization ⚫ Banking – ATMs, online bill pay, etc 1-67 Rivalry Among Existing Competitors ⚫ ⚫ ⚫ Rivalry among existing competitors – high when competition is fierce and low when competition is more complacent General trend is toward more competition in almost all industries IT has certainly intensified competition in all sectors of business 1-68 PORTER’S THREE GENERIC STRATEGIES ⚫ Porter identified 3 generic business strategies for beating the competition 1. 2. 3. Overall cost leadership Differentiation Focus 1-69 Overall Cost Leadership ⚫ Overall cost leadership – offering the same or better quality product or service at a price that is less than what any of the competition is able to do ⚫ ⚫ ⚫ ⚫ Wal-Mart (Always Low Prices, Every Day Low Prices) Dell – a computer the way you want it at an affordable price Hyundai and Kia – reliable low-cost cars Grocery stores – high-volume, low-margin 1-70 Differentiation ⚫ Differentiation – offering a product or service that is perceived as being “unique” in the marketplace ⚫ ⚫ ⚫ Hummer – Like Nothing Else Audi and Michelin – safety Lund’s & Byerly’s – high-end grocery store 1-71 Focus ⚫ Focus – focusing on offering products or services ⚫ ⚫ ⚫ ⚫ To a particular segment or buyer group Within a segment of a product line To a specific geographic market Examples ⚫ ⚫ ⚫ Restaurants Physician offices Legal offices 1-72 Alternative Business Strategy Frameworks ⚫ ⚫ Top line versus bottom line – should your strategy focus on reducing costs (bottom line) or increasing revenues (top line) Run-grow-transform (RGT) framework – the allocation in terms of percentages of IT dollars on various types of business strategies 1-73 Top Line Versus Bottom Line 1-74 Top Line Versus Bottom Line ⚫ Top Line (increase revenue) ⚫ ⚫ ⚫ ⚫ ⚫ Reach new customers Offer new products Cross-selling Offering complimentary products Bottom line (minimize expenses) ⚫ ⚫ ⚫ Optimizing manufacturing processes Decreasing transportation costs Minimizing errors in a process 1-75 RGT Framework ⚫ How will you allocate IT dollars to ⚫ ⚫ ⚫ Run – optimizing execution of existing processes Grow – increasing market share, products, and service offerings Transform – innovating business processes, products, and/or services 1-76 Porter, Top Line/Bottom Line, RGT ⚫ ⚫ ⚫ Run = overall cost leadership = bottom line Grow = focus and differentiation = top line Transform = (new) differentiation = top line (when the focus is innovation) 1-77 VALUE-CHAIN ANALYSIS ⚫ ⚫ ⚫ ⚫ Value-chain analysis – systematic approach to assessing and improving the value of business processes Value chain – chain or series of business processes, each of which adds value to your organization’s products or services Business process – standardized set of activities that accomplishes a specific task Two types of processes: Primary and Support 1-78 VALUE-CHAIN ANALYSIS 1-79 VALUE-CHAIN ANALYSIS ⚫ ⚫ ⚫ Primary value process – takes in raw materials and makes, delivers, markets and sells, and services your products and services Support value process – supports the primary value processes Ask customers which processes add value and which processes reduce value ⚫ Focus IT appropriately 1-80 Value Stream Analysis Kaizen Training McGraw-Hill © 2008 The McGraw-Hill Companies, Inc. All rights reserved. What you can Expect ⚫ “Value Stream Analysis Kaizen Training” contains what you need to know to get the job done, not everything you need to know to be an expert. ⚫ Part 1 ⚫ Lean concepts and terminology ⚫ Part ⚫ 2 The process by which we create future states 1-82 1-83 Lean Thinking • Value in the Eyes of the Customer • The Value Stream • Flow • Pull of the Customer • Perfection 1-84 Value Added ⚫ Value is added any time we physically change our product towards what the customer is buying ⚫ If we are not adding value, we are adding cost or waste ⚫ Lean Manufacturing drives the systematic elimination of waste ORDER Value-Added Time : Minutes Time in Plant : Weeks CASH KEY QUESTION – Are my customers willing to pay for this ???? 1-85 Value Added vs. Non-Value Added Value added LEAN = ELIMINATING THE 7 WASTES 5% ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ Non-value added ⚫ Overproduction Waiting Transportation Non-value added processing Excess inventory Excess motion Defects Typically 95% of Total Lead Time is NonValue Added!!! 1-86 WAITING OVERPRODUCTION TRANSPORTATION 7 Wastes PROCESSING MOTION 1-87 DEFECTS INVENTORY 7 Basic Types of Waste (Toyota) ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ Overproduction – producing more than what is demanded by the customer Inventory – Storing more than the absolute minimum needed Transportation – the unnecessary movement of materials Waiting – waiting for the next process step Excess processing – due to poor tool or product design Wasted motion – unnecessary reaching, walking, looking for parts, tools, prints, etc Defects – scrap and rework 1-88 What is a Value Stream ? ⚫A Value Stream is all the actions, value creating and non-value creating, required to bring a product from order to delivery ⚫ Starts with raw materials ⚫ Finalizes at the end-customer ⚫ Involves several businesses 1-89 Value Stream Mapping ⚫ Helps you to see the sources of waste in the value stream ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ Shows the flow of information and material Forms the blueprint for lean implementation (Imagine trying to build a house without a blueprint). Helps you to see more than just the single process level Provides a common language for talking about manufacturing processes Makes decisions about the flow apparent, so they can be discussed Ties together lean concepts and techniques, which helps to avoid “cherry picking” Improvement projects Mike Rother Learning to See 1-90 What is Value Stream Analysis? ⚫ Value stream maps describe a value stream ⚫ Value stream analysis is a planning process ⚫ Uses value stream maps to communicate ⚫ ⚫ ⚫ Three value stream maps are created ⚫ ⚫ ⚫ ⚫ Information Flow Material Flow Current state Ideal state Future state (3 months from now) Action plans are developed for the future state map 1-91 The Value Stream Analysis Process ⚫ Phase 1-Pre-event work ⚫ Phase 2-The Main Event ⚫ Phase 3-Accountability Process 1-92 Value Stream Analysis Process Phase 1 Pre-event Planning McGraw-Hill © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Pre-Event Work ⚫ Three weeks prior to the event Determine team members ⚫ Define the objective of the team ⚫ Select the area and topic ⚫ Logistics (conf. Rm., times, facilitator supplies, etc.) ⚫ Invite team members to the event ⚫ Clarify roles and responsibilities ⚫ ⚫ ⚫ ⚫ Event leader-value stream manager from the area (owns resources and results) Event facilitator-CI Leaders who manage the improvement process and share in ownership of results Subject matter experts 1-94 Pre-Event Work ⚫ Two weeks prior to the event Part/quantity analysis (select representative part number) ⚫ Gather and review data (Yield, job closures, CONC, etc.) ⚫ Determine future demand ⚫ Review prior event data ⚫ Review any customer issues ⚫ Review any requirements for capital equipment ⚫ ⚫ One week prior to the event Verify customer demand ⚫ Review above data ⚫ 1-95 Value Stream Analysis Process Phase 2 The Main Event McGraw-Hill © 2008 The McGraw-Hill Companies, Inc. All rights reserved. The Main Event 1. 2. 3. 4. 5. 6. 7. Training Gemba Walk Value Stream Map-Current State Develop Ideal State Map Develop Future State Map (3 months out) Develop Future State Plan Management Report Out 1-97 VSM Event Steps 1 &2 Training and Gemba Walk 1. Training ⚫ The concepts of Lean need to be applied to classroom training as well as our other processes ⚫ ⚫ 2. This is a learn by doing process We will minimize classroom learning Gemba Walk ⚫ ⚫ Gemba means, “shop floor” or “where the process is” We need to go there so we know what we are mapping 1-98 VSM Event Step 3 Current State Map 3. Value Stream Map-Current State 1. 2. 3. 4. Map the physical flow (manufacturing loop, customer loop, supplier loop) Map the information flow Complete the lead time data bar Visually identify waste 1. 2. 5. Identify value added/non-value added (red, yellow, green dots) Visually identify the most significant opportunities with kaizen bursts. Summarize all information and metrics (date, P/N, times, inventory, OTD, quality, etc.) 1-99 Manufacturing Loop Questions What are the changeover times? What are the quantity of machines per process? Count all work in process (WIP) Look for evidence of quality problems Look for processing waste Is there great distances between processes? Is the product flexible or made to order? Is there obvious batch processing? 1-100 Customer Loop Questions Who and where are your customers? What are the product lines or families? Future marketing plans? Review growth G.M. AT&T potential. What is the total yearly order requirement? Quantity by product family or product type What is the high, low and mean ordering pattern? Monthly or quarterly high & low for several periods How often do we deliver to our customer? What takt time do we supply to? 1-101 Production Control Questions Where in the production chain do we trigger production? How much work do we release at one time? How long does it take to go from customer order to production order? How do we physically schedule production? How do we react to customer emergencies? 1-102 Supplier Loop Questions #1 question, how do you tell suppliers what to ship, make, etc.? When and how often do they get purchase orders from Customers? When and how do we change the purchase order? When and how often do suppliers ship product and how? Is it level? (Truck, train, etc.) Do we have standard pack quantities? Are suppliers aware of our inventory quantities? Are we sure of suppliers inventory? How? Do we have a supplier training program? 1-103 Information Flow Questions ⚫ ⚫ How are the manufacturing and procurement orders distributed? ⚫ Who gets them ⚫ How frequently ⚫ What is the process of generating them How are the shop order schedules generated and revised? Are there “shortage meetings”? What parts of the manufacturing loop are scheduled by MRP? Make sure to document the informal (hot lists) as well as formal (MRP) information channels. 1-104 Current State Lead Time Data Bar Cycle Time (CT) Lead Time Total DOH Inventory 8 Days 4 Days 4 Hrs 12 Days (1 Hr.) 4 Hrs VA Time (yes/no) 1-105 CT Total Mapping Icons COMPUTER WIP 1-106 Takt Time Takt time paces production to the pace of customer requirements.(Customer Unit Requirement 880 ut /m) Total daily operating time Takt Time = Total daily customer requirement Operating time = Customer units/day Requirement Takt time mins/unit 1 shift x 8 hours – (2) 20-min. breaks = 440 mins/day 880 units/month = = 44 20 days/month 440 mins/day = 44 units/day 1-107 = 10 Elements of Value Stream Maps 30 Days Monthly Orders MRP 880 Customer Supplier Customer Loop Supplier Loop Takt Time = 440 min/44 = 10 min/unit Information Bi-Monthly Manufacturing Loop 45 Days Op 1 1 Day S/U = 1 hr CT = 1.6 min 45 Op 2 S/U = 0.08 hr CT = 0.9 min 1 1.6 2 Days Op 3 2 Days S/U = 0.08 hr CT = 0.9 min 2 0.9 Op 4 S/U = 0 CT = 60 min 2 0.9 1 Day Op 5 S/U = 0.08 hr CT = 1.2 min 1 60 5 Days Op 6 S/U = 1.95 hr CT = 40.3 min 5 1.2 1 Day 1 40.3 Total = 57 Days Total = 1 Hr. 44.9 Min. Lead Time Data Bar 1-108 Value Stream Mapping Helps us see where value is created, and where waste exists: ⚫ Developed ⚫ Shows by ‘product family’ flow of both material & information. ⚫ Helps us ‘see’ where/how specific Lean tools can be used to improve flow and eliminate waste ⚫ Consists of two types of maps: Present State (“how it is”) Future State (“how it should be”) 1-109 Value Stream Mapping Step by step review 1-110 1-111 1-112 Present State Value Stream Map 1-113 The Process Box • Indicates basic production process. • One box for each major material flow, not for each processing step. • Process disconnection and inventory accumulation are indicators of where processes are separated. 1-114 The Data Box • The Data Box stores process information - Cycle Time (C/T). Rate at which a part or product is completed by a process. - Changeover Time (C/O). Amount of time to switch from one product type to another. - Uptime. Measure of machine use (100% = Always running). - Every Part Every (EPE). Measure of batch sizes and changeover cycles. - Available Work Time. Per shift of a process (in seconds, minus break, meeting, and cleanup times.) - Quality Level. % First time yield. - Number of Operators. Required personnel for a process. 1-115 Inventory Triangle and Push Movement Arrow • An Inventory Triangle captures the location and amount of inventory • A striped arrow indicates a Push movement of inventory according to a predefined schedule 1-116 Lead Time Bars • Lead time indicates total time for a process or series of process. - Production/Manufacturing Lead Time (MLT). Lead time through entire production. - Process Lead Time. Lead time though each process, including time in inventory. Calculated as inventory quantity divided by daily customer requirement. - Processing Time = Value Added Time. Actual time spent processing the part or product. - Used to highlight inefficiencies (7000 pcs)/(28400 pcs/month)x(20 workdays/month) 1-117 Present State Value Stream Map 1-118 Map Features 1: Document customer demand 2: Define processes w/operation data 3: Show material flow 4: Show information flow 5: Compute lead times 1-119 Mapping Methodology ⚫ Focus ⚫ Seek ⚫ Go on a product family within single plant. leadership from the value stream manager. and see. Conduct door-to-door process walk. ⚫ Work backwards, starting at the shipping door. ⚫ Capture and quantify basic operations involved. ⚫ Encourage ⚫ Use participation of all stakeholders. pencil & paper rather than CAD. 1-120 Strategies for Process Improvement #1: Produce to your Takt Time. #2: Develop continuous flow where possible to reduce inventory. Eliminate isolated islands of production. #3: Use supermarkets to control production where continuous flow does not extend upstream (often outside the plant). #4: Try to send customer schedule to only one production process (pacemaker). #5: Load-level production at pacemaker. #6: Release/withdraw small, consistent increments of work to pacemaker (pitch). 1-121 Establish Takt Time • Synchronizes pace of production to match pace of sales. Takt Time = Demand Rate Takt Time = Work Time Available Number of Units Sold 900 Seconds = 10.6 Sec/Board 85 Boards Cycle Time = Minimum # of People Takt Time Takt Time = GOAL: Produce to Demand 1-122 Supermarket Pull System • Used to control production where continuous flow does not extend upstream. • Example Reasons for Supermarkets: - Process that operate at very fast or slow cycle times and need to change over to serve multiple product families - Some processes, such as those at suppliers, are far away and shipping one piece at a time does not make sense. - Some processes have too much lead time or are too unreliable to couple directly to other processes in a continuous flow. 1-123 Pacemaker Process • A pacemaker process is single point in the manufacturing value stream that sets the production pace for the entire process. • The pacemaker process is frequently the most downstream continuous-flow process. • On the future-state map, the pacemaker process is the production process that is controlled by the outside customer’s orders.means • Load-leveling distributing the production of different products evenly over a time period, creating a product “mix”. • The schedule should create an “initial pull” by releasing and withdrawing a small, consistent increment of work, called the “Pitch”. 1-124 Load Leveling and Paced Withdrawl • Load-leveling means distributing the production of different products evenly over a time period, creating a product “mix”. • The schedule should create an “initial pull” by releasing and withdrawing a small, consistent increment of work, called the “Pitch”. 1-125 Questions – Part 4 1. What is the company’s Takt time if the demand is 460 parts per 8 hour shift (with two 10 minute breaks)? 2. Where is it not practical to achieve continuous flow? How could a supermarket be used to overcome this? 3. How can the welding and assembly operations be configured to Takt time? 4. What should be the pacemaker process? 5. What other improvements are possible? 1-126 Future State Value Stream Map 1-127
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