QUALITY AND PRODUCTIVITY INSTITUTE

Case Study Of Business Process Reengineering Mid Term Research

Presented By El Shaymaa Mohamed Nassar Magda Hassan Heshmat

Under Supervision of Dr. Mohammad Mansour

February 2011 This research studies the effect of using IT tools with different approach on BPR outcomes through existing cases. The research assumes replacement of a series of managerial blocks with online supply. It simulates benchmarking of New application versus the old one.

2 Contents

Introduction ...... Error: Reference source not found

Background & Literature Review ...... Error: Reference source not found

Contents...... 3

Introduction ...... 4

Background & Literature Review ...... 6

Problem Statement ...... 9

Planning ...... 12

Design and Implementation ...... 15

Conclusion ...... 22

References ...... 22

3 Introduction

The modern business tendency is TQM “Total Quality Management” application to get competitive position within national or international market. Also, non-profitable firms tend to reduce costs and improve products and services.

Taking TQM as a target of organization, a comprehension of TQM terminology must be considered as a policy of top management. The TQM can be an integration of different managerial departments to realize high qualified product or service in order to increase customer satisfaction, reduce costs of serial processes and consequently increase incomes of firm. Such a target is followed by identifying eight essential clauses refer to ISO9000 even if firm does not intent to get certificate, which are:

1- Detecting scope

2- Normative reference

3- Quality policy

4- Documentation

5- Purchasing

6- Internal Auditing

7- Product calibration

8- Measurement and improvement

These clauses assure quality realization. However, application may suffer many implications if they are applied using traditional managerial methods. SCADA systems offer solutions for documentation as each event is monitored and recorded within spread sheets and databases. Then auditing is simply driven on data collected from actual

4 activity. Upon monitored data machines can be calibrated once information is sent. The resultant action is continuous measurement of product quality and continual improvement using appropriate preventive and corrective actions.

Also, SCADA system can introduce collection of warehouses storage units and required procurements. Usage of iSCADA allows online connection with suppliers, so a quality assured outsources is realized. The quality policy is realized and communicated to low managerial level. The research assumes that SCADA enhances integrative virtual cross functional teams due to the following factors:

1- Complementary between the different departments

2- Data sharing and information availability

3- Self-managed and self-dependent team

4- Involvement of top management within circular managerial structure modeling

5- Effectiveness of lateral and vertical internal communications

6- Disappearance of intermediate managerial levels

7- Empowerment and involvement of workers

8- Realization of using managerial processing approach

This means the realization of the eight quality management principles. The score of realization of each factor defines success level of SCADA application. However, this success may depend on degree of communication infrastructure and computer-aided technology in use. Security techniques define the trust level and decrease resistance of top management to SCADA application.

5 Background & Literature Review

Business Process Reengineering (BPR) is not just a slight improvement, however it is rebuilding of managerial system of an organization in order to add value to this organization according to SMART “Simple Measurable Accurate Reliable Target”. A consultant office or top management can initiate a new model of a managerial system.

The following figure shows a replacement of series of blocks by online connection [1].

Figure 1: Procurement Process Reengineering diagram

The process reengineering diagram declares the reduction of in between time consumption plus just in time JIT feedback. This image can be photocopied in each serial of process in SCADA system. The BPR is applied upon predefined mapping of

6 regulations and rules until realizing success of new system. The following figure shows the principal concept of BPR procedure [2]

Figure 2: BPR Successful Procedure

The literature researches introduced three approaches of involving IT in BPR implantation which are Modular, Incremental and Combinable [3].

7 Figure 3: Modular Approach of IT Support

Figure 4: increment approach of IT support

8 Figure 5: Combinable approach h for IT support in BPR

The figures 3, 4 and 5 declare different approaches of planning, designing and implementing BPR using IT support. In figure 3 the BPR is implemented by process as in figure 1, and designed for next process and so on.

Problem Statement

The existing business suffers a lot from long queues of managerial blocks. This managerial model belongs to centralized management system. It is supposed that series of blocks increase time consumption, reduce communication effectiveness, and reduce accuracy of transmitted data reception. This assumption is applied to industrial, accountant, service systems. Many general software packages were built to reengineer systems but they could not succeed. The main reason of failure or low effect of

9 reengineering as assumed is the ignorance of current state of organization, or the careless of attempting reengineering before slight improvement.

Therefore, this research aims to study the application of SCADA “Supervisory Control

And Data Acquisition” on Waste Water Treatment Plant in South-West of Port Said, where Management system exists on 10 km far from lift pump station.

The SCADA depends on remote pump monitoring so a decision making is maintained at a time, and so a requirement of workers at shift is eliminated.

The following chapters introduce the managerial structure of WWTP and initial sequence diagram of data transmission. This idea is applicable for CRM software where customer satisfaction metrics are remotely collected and monitored, statistically analyzed and appropriate control decision is taken

Waste Water Treatment Plant (WWTP) is an integrative system unit. It owns an ideal managerial structure formed by 250 employees within different departments. The organization structure is designed as in the following figure, considering internal communication.

10 figure 6: WWTP Organizational Chart

This figure shows the distribution of authorities an responsibilities, so top manager has the final decision of any procedure done within the firm. Managers of departments are authorized and responsible to follow the instructures of the top manager and to perform operational duties. As an ideal structure working orders are documented and formaly transmitted.

SCADA system aims to reengineer communications and so it may eliminate intermediate departments as in figure 1 following modular approach in figure 5. This may realize the

11 objective of TQM. SCADA may add value, reduce inventory, and transportations, consequently reduce waste time, which are Lean 5S principles.

Planning

To correctly plan WWTP system, research begin by operational and maintenance relationship. Traditional process is implemented as in the following continual block diagrams in figures 6, 7 and 8. Considering arrows represent upward reports and downward instructions, also lateral communications can exist between similar managerial levels. This firm is considered ideal, well-structured; it owns complemented and well- defined skills of members. The interaction with customer is indirect. The effect of response rate appears in spent time of water proliferation and stopping duration. Really, the WWTP was considered one of the high-technological units, which applies remote- automation using central control panels and owns restrictive Management Information

System. Therefore, communications are transferred in their definitive pathways.

12 Figure 6: Data Transmission From Control Panel To TOP Manager

Figure 7: Data Transmission From TOP Manager To Excutive Workers

13 Figure 8: Data Transmission From Excutive Workers To Maintenance Manager and Material Supply

S ta u s lis t S ta u s lis t W o rk e r C o n tro l Observation 01 p a n e l F o rm a n T ra in in g Documentation 02 S ta u s lis t

O p e ra tio n Sta u s lis t Q u a lity M a n a g e r Financial funds M a n u a l Evalation 03 Top Manager M a c h in e Decision 04 M a n u a l

perform operation monitoring and information transaction

v e n d o r's a 0 m a n a g e r m a n u a l warehouse sparepart request support 011 electrical/mecanical fin a n c ia l S ta u s lis t engineering analysis 012 s to ra g e m a c h in e fo rm a n instructionSta u s lis t o rig in a l e x e c u tiv e menatinance electrical/engineering M a n u a l instructions 013 tim in g spare part request o rig in w o rk e r M a c h in e execution 014 fo rm a n \ M a n u a lrequirement in s p e c tio n w o rk e r re p o rt existing toolsre p o rt re p o rts

a 0 1 perform decision making and internal maintenance execution

Low level storage units v e n d o r's a 0 1 w a re h o u s e m a n u a l Purchase order Su p p ly Check a021 electrical/mecanical fin a n c ia l S ta u s lis t engineering inspection 022 s to ra g e m a c h in e fo rm a n instructionSta u s lis t o rig in a l e x e c u tiv e menatinance electrical/engineering M a n u a l Destribution 023 tim in g spare part request o rig in w o rk e r M a c h in e execution 014 fo rm a n \ M a n u a lrequirement in s p e c tio n w o rk e r re p o rt existing toolsre p o rt re p o rts

Perform internal spare part delivery for maintainance

figure 9: Initial internal information transaction to solve industrial problem

14 The transmission of data is considered smooth and applied upon self-dependent and self- managed employees. Transmission rate is considered higher than the other in another organization.

However, it is also followed by warehouse system, where spare part storage is examined and order for new parts is applied. A list of purchases is implemented and request of purchase is directed to manager. So, even if and only if everything acts as required, without delay of drivers and inexistence of ready cars in garage, the minimum time required is at least 5 hours before problem can be repaired. Therefore, a SCADA system can be implemented to reengineer communication process, considering warehouse system as an expansion if SCADA system succeeds.

Design and Implementation

SCADA system depends on applying new model eliminating intermediate levels of communications, assuring availability and accessibility of information. SCADA system allows monitoring of PLC system existing in workstation, so existence of worker for 24 hours is decreased. The three block diagrams shown in the previous section will be modified to suite new tendencies and reduce response time. Figure 9 will show new block diagram combining the three previous stages, allowing circular data transmission.

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Figure 10: The New Approach Of SCADA Process

S u p p lie rs

Operation Manager

Electrical M anager W arehouse Manager s r e m k e r l e b o c o a w r f

r e P e

t v i n n t I o u i t c a e r

Maintenance Manager x e E p O

Top Manager

M achine /Quality/Vendors M a n u a ls

figure 11: the Business Process Management Reengineering

16 This figure clarifies reduction in time consumption and internal data sequence diagram as data share and data access and so appropriate decision making within each managerial level.

The TOP manager is involved within alike circular model, he has graphical a written reports from Operation and Maintenance managers. An empowerment of employments is found where everyone has its tool to access data and to evaluate state. This development allows analytical statistics and warehouse storage prediction. It allows high qualified supply chain.

The virtual team work breaks face – to – face defects. However, the success of this system depends on:

1- Infrastructure Communication Medium

2- Communication Effectiveness

3- Development of SCADA software

4- Development of Familiar Graphic Interface

5- Development of Database

According to BPMR guidance and Relationship of mission and workprocesses to information technology diagram in figure 12

17 Mission Defines Accomplish

Work processes Execute Guide

Decisions Consider Supports

Informatipn Employs Processes

Technology figure 12: Reeingineering guidance and Relationship of Mission and Workprocess to Information

Technology

BPR Comprises a sequence of successive, integrated Activities

1- Develop the vision: which clarifies the mission of Business Process Reengineering, defining goals of BPR and realizing customer needs, detecting schedules for BPR Acheiving

2- Map or Model Existing Processes: definining existing work processes and map to new required work processes, in order to mininize non value processes and inefficient practices

3- Redesign New Process: throug, mission and vision and strength and weakness found in existing models, team work perform decision of new design:

− identify all inputs of each process

− define infrastructure database and communication systems

− define required skills, staff, raw materials, and IT support

4- IT support systems

- support all required processes

18 - involvement of owners and end users in team work

- make new work understood by by end users

5- establish Performance indicator

BPR Benefits:

− cost reduction

− waste time minimzation

− paper transaction minimzation

6- plan implementation

− meetings detection

− schedule time estimation

− process mapping

− training designing

7- review and maintenance

− review of benefit and performance acheivement for each step

− work breakdown to maintain feadback for acheived process

8- the human element

− maintain periodical information report to teammembers

− maintain redundant manual control for new systems, without affecting BPR policy

− maintain confidence and loyalty to new project

table 1: activities break down dependency structure (days)

Time

19 No Activities O M P Est Time 1 Develop vision 2 4 6 4.00 2 Map or Model existing Process 3 5 9 5.33 3 Redesign New Process 4 5 10 5.67 4 IT Support System 5 8 10 7.83 5 Establish Performance Indicator 2 5 7 4.83 6 Plan Implementation 6 8 11 8.17 7 Review and Maintenance 2 5 7 4.83 8 Meetings and training 3 8 15 8.83

20 Detecting Team Members:

1- team leader: IT Manager

Team Members:

1- Development Engineering

2- Top Manager

3- Electrical Engineering

4- Maintenance Engineering

5- Warehouses Employees

6- Operation Maneger

Discussion

The rate of transmission will provide trust in SCADA system. The preference exists between Fiber Optics, Twisted Pair Cables, and Co-axial Cables. In a complete research transmission rate comparison versus cost of communication media installation will be maintained. Probability of noises and disturbances that can affect data accuracy can be simulated. Mean time between failures for serial connected nodes, including PLCs, Local

Control Panel, Client and Server, Switches, HDSL and Modems will be observed. The project depends completely on Virtual Private Network VPN. The Service Provider has no relation in this state. The other probability is the difference between IP address of

PLC’s Local Network and PC’s Local Area Network, so a bridge may be needed and add overload on SCADA system.

Through, such a discussion, network intrusion may be avoided using the features of

Operating System, therefore security can be realized. The study of system upon these

21 parameters can encourage applying SCADA system, to improve activities in WWTP system and modify traditional organization structure.

Conclusion

The TQM application within organization recommends the implementation of modular or pilot ERP, eliminating intermediate blocks within structure or communication processes of organization. This process reengineering can be considered as cross-functional modification. The reengineering affects all sections. It adapts life of work, financial, human and material resources.

A business process is a sequence of related tasks which make up a business activity:

- Functions are managerial control units with responsibility for and authority over

a series of related activities

- Functions are executed through business processes

- Activities involve one or more entities and are performed to directly or indirectly

fulfill one of the objectives of the organization

- Public agencies should be organized to optimally carry out its functions

(Structure follows function)

References

22 1. BUSINESS PROCESS REENGINEERING: A CONSOLIDATED METHODOLOGY: Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi Dept. of Industrial and Manufacturing Engineering pg.3

2. PLC –SCADA Water Industry this paper follows authors currently with Electrical Engineering Department at Bechtel Water Technology Ltd.

3. IEEE - PLC and SCADA - A Water Industry Experience pg 6

4. Introduction to SCADA

5. Berman, Saul, Strategic Direction: Don't Reengineer Without It; Scanning the Horizon for Turbulence, Planning Review, November 1994; Pg. 18.

6. Brown, Tom, De-engineering the Corporation, Industry Week, April 18, 1994; Pg. 18.

7. Cafasso, Rosemary, Rethinking Reengineering, Computerworld, March 15, 1993; Pg. 102.

8. Caldwell, Bruce, Missteps, Miscues -- Business Reengineering Failures, InformationWeek, June 20, 1994; Pg. 50.

9. Chew, Angie, How Insurance Firms Can Reengineer for Success, Business Times, June 20, 1994; Pg.11

10.Cone, Edward, Technology Chief of the Year; All the Right Moves – Tom Trainer of Reebok International Successfully Teamed Business Reengineering with Information Technology, InformationWeek, December 26, 1994; Pg. 35.

11.Davenport, Thomas H., Will Participative Makeovers of Business Processes Succeed Where Reengineering Failed? Planning Review, January 1995; Pg. 24.

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