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Deloitte &

ToucheBakkeni

st

ORDefining

the Future

By

Prof. dr. ir. Jo van Nunen

Erasmus University Rotterdam

Deloitte & Touche Bakkenist

The Netherlands

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Deloitte &

ToucheBakkeni

st

The Role ofICT and OR

in theOrganisation of

Business Processes

By

Prof. dr. ir. Jo van Nunen

Erasmus Universiteit Rotterdam

Deloitte & Touche Bakkenist

The Netherlands

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Deloitte &

ToucheBakkeni

st

Contents

• Developments in BP

• Supply Chains

• e-Business

• ICT change

• OR Modeling

• Examples

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Deloitte &

ToucheBakkeni

st

MOTTO

There are

3 types

of

Organisations

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Deloitte &

ToucheBakkeni

st

AND

There are

3 types

of

Mathematicians

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Deloitte &

ToucheBakkeni

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Business Processes

• Customer Orientation

• Mass Individualization

• Internationalization• Efficiency of

Processes• Quality of

Processes• etc.

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Deloitte &

ToucheBakkeni

st

And

the Possibilities

of

ICT

and

Networks

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Deloitte &

ToucheBakkeni

st Electronic Business

EB = Electronic Data Interchange

EB = Electronic Ordering

EB = Electronic Paying

EB = Electronic Auctioning

EB = Electronic Intermediation

EB = Electronic Quality Control

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Deloitte &

ToucheBakkeni

st Electronic Business

EB = Online Routing

EB = Online Quality Control

EB = Online Selection

EB = Customer Analysis

EB = Online Optimization

EB = Online Simulation

EB = Etc.

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ToucheBakkeni

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E-Businessorganisation

Customer

Business Process

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A business process is a collection of

related activities with a well

defined result for a customer

• different from business functions

• crosses organisational boundaries

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Deloitte &

ToucheBakkeni

st Business Process 1

ProductDevelopment

DistributionAfter sales

service

ProductionMarketing

Sales

Customer

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Deloitte &

ToucheBakkeni

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Example

Deloitte &

ToucheBakkeni

st

Productionof lamps

Centraldepot

Decentraldepot

Customer

Philips Lighting

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Deloitte &

ToucheBakkeni

st The Customer

• retailer

• project

• maintenance

• special orders

• etc.

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Deloitte &

ToucheBakkeni

st The Customer

• specific

• quality

• international

• information

• after sales service

• etc.

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Deloitte &

ToucheBakkeni

st Classical

Multichanneling

How To

Handle Different

Types Of

Customers

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Deloitte &

ToucheBakkeni

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production assembling

production on order

assembling on order

delivering

out of stock

Logistic chain

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Deloitte &

ToucheBakkeni

stClassical

Approaches

• OR methods

• Value chain analyses

• Business Process Redesign

• ERP

• Etc.

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Deloitte &

ToucheBakkeni

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Producer Transport Transport

EB-Organisation

Chain Management

Auction Wholesaler Retailer

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Deloitte &

ToucheBakkeni

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EB-organisation

Deloitte &

ToucheBakkeni

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Where does the customer enter?

• Retailer

• Wholesaler

• Agent

• Producer

• Etc.

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Deloitte &

ToucheBakkeni

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Channels

• Shop

• Internet

• Call centre

• CRM-agent

• Etc.

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Deloitte &

ToucheBakkeni

stModern

Multichanneling

How to Handle

same

customer that uses

all

channels

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Deloitte &

ToucheBakkeni

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Examples Auctions

• Nike

• cargo on ship

• bonds

• flowers

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Deloitte &

ToucheBakkeni

st Revenue Management

NOT: Optimize Revenue from Single System

BUT: Optimize Revenue from Multiple Interactive

Systems

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Deloitte &

ToucheBakkeni

st

Intelligent Transport Systems

interact online

with

External Realtime Systems

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Deloitte &

ToucheBakkeni

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Escudero & Pereira

DSS

for

Electricity Open Market

• Short Term Auctions Spot Market

• Mid & Long Term Bidding Contracts

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Deloitte &

ToucheBakkeni

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ICT developments and Business

ProcessesTracking and tracing

Communication on–wip–resource

availability–etc.

OL-Optimization

Etc.

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Deloitte &

ToucheBakkeni

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ICT developments and Business

Processes• Satellite communication• Multi media technology• Chip card technology• Voice recognition• Mobile communication• THINKING PRODUCT• Etc.

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Deloitte &

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ICT & OR

and

Strategy

Competitive pull new servicesshorter delivery

Information Technology&OR as strategic weapon

Technology pushcost efficiencyoptimisationintegration

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Deloitte &

ToucheBakkeni

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COMPETING ON

BUSINESS PROCESS

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Redesigning

Business Processes

level

of trans-

formation

local exploitation IT

internal integration

redesign business process

redesign business network

redesign core business

value addedVenkatraman 1991

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Deloitte &

ToucheBakkeni

st RESEARCH QUESTIONS

THE ENGINEERING APPROACH

GIVEN ALL THE TECHNOLOGICAL

POSSIBILITIES

HOW TO DESIGN

HOW TO CONTROL?

“THE NEW BUSINESS PROCESS”

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Deloitte &

ToucheBakkeni

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CHALLENGE

Can we develop theory

and models

that help in

design and control

problems

?

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Deloitte &

ToucheBakkeni

st Subjects

• Modeling interorganisational trade procedures

• ERP and IOS

• FMS and WFMS

• Intelligent agents

• etc.

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Deloitte &

ToucheBakkeni

st Subjects

• Analyzing Customer Behaviour

• Designing Modular Networks

• Role of Auctioning in Networks

• etc.

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Deloitte &

ToucheBakkeni

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Managerial Problems

Our New Integrated Designs are Controlled

by Whom?

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Deloitte &

ToucheBakkeni

st Managing business processes

Goods flow controlGoods flow control

Departmentcontrol

Departmentcontrol

Departmentcontrol

Departmentcontrol

Departmentcontrol

Departmentcontrol

Departmt. ADepartmt. A Departmt. BDepartmt. B Departmt. CDepartmt. C

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Deloitte &

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Business Network

Producers

Wholesalers

Retailers

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Deloitte &

ToucheBakkeni

st Version 1

Producers

are

organized

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Deloitte &

ToucheBakkeni

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Business Network

Producers

Wholesalers

Retailers

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Deloitte &

ToucheBakkeni

st Version 2

Wholesalers

know

the

market

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Deloitte &

ToucheBakkeni

stBusiness Network

Producers

Wholesalers

Retailers

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Deloitte &

ToucheBakkeni

st Version 3

Retailers

are

a

chain

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Deloitte &

ToucheBakkeni

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Business Network

Producers

Wholesalers

Retailers

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Deloitte &

ToucheBakkeni

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Version 4

Logistic service

provider

offers

service

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Deloitte &

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Business Network

Producers

Wholesalers

Retailers

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Deloitte &

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Success

if

power relation

is clear

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Deloitte &

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Power Relations Clearthen

OR-Models OK

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Deloitte &

ToucheBakkeni

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Practice

is

often

a

mixture

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Deloitte &

ToucheBakkeni

st Ways have to be found

to

"create"

cooperation

“The Governance structure”

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Shifts in control

structure

do they influence

the models

?

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Who will be the chainmaster?

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The Lord of the Process

• Producer•Wholesaler•Retailer•LSP•Bank•Microsoft•etc.

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ToucheBakkeni

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How do we

mobilize

cooperation

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Deloitte &

ToucheBakkeni

st OR-Models

• Simulation• Scenario Analysis• Sensitivity Analysis• etc.

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Deloitte &

ToucheBakkeni

stRedefinition of

Customized Product• Old customized

product• Barcode & Chip• Website• Helpdesk call center• Tracking and Tracing• Delivery Time• Remote Repair• Community

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Deloitte &

ToucheBakkeni

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The Producers

• Where and when to produce each part?

• What is distribution?

• What is stock?

• With whom to collaborate?

• How to serve?

• Etc.

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Deloitte &

ToucheBakkeni

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LSP

• Am I producer?

• Am I warehouse?

• Am I intermediary?

• Am I information system?

• Am I in charge?

• Etc.

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Deloitte &

ToucheBakkeni

st COMPLEXITY

How do we

Handle

Mixture

of

Product

and

Services

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Deloitte &

ToucheBakkeni

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WHICH INFO SYSTEMS

and

WHICH OR MODELS

FOR

Customers

and

Processes

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Deloitte &

ToucheBakkeni

stSimulation Software

IBM Supply Chain Simulation• analysis• optimization• etc.

Simple ++

• Planning

• Scheduling

• Forecasting

• etc.

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Deloitte &

ToucheBakkeni

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AIMMS 3.0

Allround Development

Environment for Modeling

Experts to create Fully

Functional Decision Support Systems

for End Users

Simulation Software

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Deloitte &

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Examples analyzed

• SHIP IT SMARTER.COM

• PROCUREMENT HEINEKEN

• OMRON ELECTRONICS

• PHILIPS MOBILES

• ETC.

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Deloitte &

ToucheBakkeni

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Examples

• CISCO

• DELL

• CARGOWEB.com

• E-marketplaces

• ETC.

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Deloitte &

ToucheBakkeni

st Organizational Research

• ICT induced Organizational Redesign

• Trusted THIRD Parties

• 4 PL

• New organizational forms

• Organizational boundaries

• etc.

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Deloitte &

ToucheBakkeni

st Operational Research

• Network Design• Workflow

Optimization• Neural Networks• SCM

Optimization• APS• ASP Software• etc.

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Deloitte &

ToucheBakkeni

st Operational Research

• NUMETRIX ==> JDE

• PLANNING ==> O.L.

• FORECAST ==> Reallife

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Deloitte &

ToucheBakkeni

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CUSTOMERCOMPOSES PRODUCT

andSELECTS

PROCESSES

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Deloitte &

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HOW CANCUSTOMER

DO IT IN AN

OPTIMAL WAY

?

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Deloitte &

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OPTIMIZINGTHE

VIRTUALORGANIZATION

USINGE-BUSINESS

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Deloitte &

ToucheBakkeni

st The virtual organisation

agent customer

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Deloitte &

ToucheBakkeni

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E xcellent use of OR-models

B y defining the future