A . Azadeh, M . Haghnevis and Y . Khodadadegan Department of Industrial Engineering and

1. DESIGN AND ASSESSMENT OF THE INTEGRATED INFORMATION, BUSINESS PROCESS AND PRODUCTION SYSTEM BY SIMULATION A. Azadeh, M. Haghnevis and Y. Khodadadegan Department of Industrial Engineering and Research Institute of Energy Management and Planning Faculty of Engineering, University of Tehran

2. Objectives and Features • The objectives : • Integrated information, business and production systems of a powder coating manufacturing via computer simulation • Capable of evaluating customer lead-times in six different dimensions • The unique features : • Identifies major bottlenecks of production and information system and business process concurrently • Produces several dimensions of customer satisfactions • Allows the effects of famous concept such as business process re-engineering and information technology to be evaluated before actual implementation • Previous studies consider only conventional customer lead-time, which is defined as customer lead-times to receive goods or services

3. Introduction • By integrated modeling • The hidden and concurrent effect of business and production processes are identified and improved • High expenditure and risks of changes in organizations are the main reasons most managers avoid organizational changes and put the dynamical and evolutional changes aside • Computer simulation has excellent capabilities such as proper description of system behavior, scenario analysis and forecasting capabilities • The behavior of both tangible (i.e. materials and machines) and intangible (i.e. information, policies, and roles) components of an organization can be incorporated in a simulation model • This is the first study to model consolidated performance of production, business and information systems as a whole in a manufacturing organization via computer simulation

4. Entities InIntegrated Model • Information entities : • Arrival of orders entity • Business process entity which is the result of arrival entity transformation or an information entity into another information entity • Transformation of production entity into information entity • Production entities: • Are only formed by transformation of information entities

5. Production Processing Information Processing PE IE Final information entity Information Processing 4 IE 2 Information Processing IE 1 Final information entity 3 Transformation of Entities in the Integrated Model IE: Information entity PE: Production entity : Arrival of orders entity. : Information entity formed by information processing : Information entity formed by production processing : Production entity formed by information processing

6. Start Customer places a request to the system (arrival entity) Information processing Is it necessary to convert to production entity? (necessary condition) No Yes Is production permitted? (sufficient condition) Information entity transforms into other forms of information entity. No B A General Logical Chart

7. B A Yes The entity is changed into production entity Production processor Production entity change to the form of information entity The required information is collected Customer order is ready to be delivered Finish General logical chart

8. Integrated Model • Consider the following suggestions: • The integrated model requires a conceptual model to be converted into simulation model • Random variables and activity durations should be distinctly computed for production, business and information processes • It is quite important to foresee the concurrent interactions of business process and production process with respect to occupying resources • Transient period of the integrated simulation model must be identified and removed by distinguishing between steady states of production, business and information processes • When information entities are transformed to production entities and vise versa, their attributes and properties must be kept and acknowledged by the integrated model

9. Customer Production Manager Production order, sample request or complaints Monthly production report & machine request Customer complaints & new sample request General Manager Returned forms from warehouse Lab Manager Complaint assessment report Returned forms from warehouse Human resource identification Warehouse Supervisor Human resource & technical reports Allowance issue & production order Human resource request & confirmation Warehouse inventory information & permission to deliver to customer Production instructions Material request for warehouse Material request Supplies Department Assistant to GM Plant Manager Accepting the returns of items from customers Technical information Return of orders To customers Human resource identification Financial Manager Sales Supervisor Technical information request & repair reports Installations The Case Study • The system being studied is a small order-based powder coating manufacturer • The company produces eight different coatings by three parallel machines The customers contact the company to either: • Place orders • Request samples or • Make complaints

10. Performance Measures • Customer lead-time due to customer being rejected • Customer lead-time given the order is available in inventory • Customer lead-time given order is not available in inventory • Customer lead-time due to accepted after sales services • Customer lead-time given customer complaint is not accepted • Customer lead-time for a particular product sample

11. Rejection of complaints Information processing Customer complaints • Acceptance of complaints Information processing Information processing Sample request Business process Customer orders Final production available in inventory Final information Entity Information processing Production request Shortage of raw materials Production process Availability of raw materials Transformation of information to production entity Transformation of production to information entity The General Overview :Arrival of orders entity. : Information entity formed by information processing : Information entity formed by production processing : Production entity formed by information processing : Final information entity

12. Attributes and Variables

13. Entities in queue Time Integrated Simulation • Run for 6.5 months (68640 minute), 2.5 months was recognized as transient state • Simulation transient period is identified by maximum transient periods of all resources by batch method which is evaluated at ts = 25000 minutes • Steady state simulation starts at 26400 minutes (equivalent of 2.5 months) in order to collect data properly

14. Modules Used in Model

15. Integrated Simulation Network

16. Verification and Validation • The six performance measures • Run for two working weeks and replicated 20 times • 20 replications are compared with 20 random samples of the actual system. • Collect for both the simulation and actual system • Independent t-test is used to test Ho: µ1 = µ

17. Sensitivity Analysis • Without utilizing IT system addition of new personnel to the system were considered as follows: • Addition of a deputy general manager in addition to existing general manager, i.e. two individuals could handle general manager responsibility • Addition of a deputy warehouse supervisor in addition to the warehouse supervisor • Simultaneous addition of a deputy general manager and a warehouse supervisor • Addition of a deputy sales supervisor • Simultaneous addition of a deputy general manager, a warehouse supervisor and a sales supervisor

18. Results of non-IT Implementations

19. Ranking of non-IT Alternative • Cost of adding: • x = a warehouse supervisor • y = a sales supervisor • z = a general manager • x, y and z are defined as follows (m and n are the coefficient cost) : • y = mx • z = nx • By a comprehensive analysis m and n are 3 and 6, respectively • Cost of adding • a warehouse supervisor unit = α • a sales supervisor = 3α • a general manager = 6α • Cost table is obtained for each alternative: • a6α • bα • c7α • d3α • e10α

20. IT Simulation Alternative

21. Performance of IT & non-IT Alternatives

22. PCA Rankings of IT & non-IT Alternatives

23. Conclusion and Results • Can lead to acquire the required knowledge of existing information, business and production systems in order to design • Test managerial and technological changes and its interaction • Can examine the impact of electronic data interchange (EDI), information technology (IT) and management information systems (MIS) on production organizations • Real issues attached to the system may be identified and total rather than local optimizations are achieved because of the integrated approach

24. DESIGN AND ASSESSMENT OF THE INTEGRATED INFORMATION, BUSINESS PROCESS AND PRODUCTION SYSTEM BY SIMULATION A. Azadeh, M. Haghnevis and Y. Khodadadegan Department of Industrial Engineering and Research Institute of Energy Management and Planning Faculty of Engineering, University of Tehran FINISH