RFID BUSINESS PROCESSES
5.8 RFID ENTERPRISE SUPPLY CHAIN SYSTEMS
5.8.3 Supply Chain Management
SCP and SCE EW associated with SCM (see Chapter 3) consist of two parts of SCM: logistics and management. The logistics part pertains to any supplies that can be procured, managed, and transported from one point to another in the supply chain. Examples include hospital supplies, pharmaceutical supplies, clothing supplies, aircraft supplies, subsistence (food), vehicle part supplies to field troops overseas, clothing supplies, office supplies, com- puter supplies, furniture, and shoe supplies. The management part is con- cerned with the integration with ERP Systems, Web Services, loyalty cards, handheld devices, smart shelves, and POS terminals.
Business and IT executives look at SCM logistics differently. Business executives are concerned with how SCM logistics interacts with customers and vendors and about how business processes should be adapted to SCM logistics. IT executives on the other hand are concerned with how infor- mation systems and services can be implemented and shared across the organization. Business and IT executives need to collaborate with each other on what implementation approach (one-, two- or multidimensional) to use in order to improve business processes. The approach so selected at a point of time in the supply chain may change to another approach as business processes improve. The executives also need to consider the Adaptive Multi-Layer Business Process Model as a way of integrating ERP and SCM functionalities with the RFID-enabled applications. It may be possible to bypass the model’s third layer of middleware technologies serving as a bridge between the SCM systems and RFID applications, only if the RFID-enabled SCM systems can be developed from scratch and pack- aged for delivery to the customers and suppliers.
5.8.3.1 SCM Logistics
The executives also need to consider a model of organizational maturity.
No matter what implementation approach to use, and how well the Adaptive or Predictive Multi-Layer Business Process Model is applied, the SCM system components may not function or integrate properly in logistics if business processes have not improved due to organizational immaturity and other factors. To test for the maturity of the organization in incorporating RFID technology infrastructure into the logistics, consider the SCM Logistics Matu- rity Model. We divide the maturity model into five life stages and then assess each stage if it meets certain criteria before we proceed to the higher-level
stage. The first stage of course indicates the organization is immature and the final stage indicates the organization is completely mature.
For our own purpose, we give each stage a name and then describe what each does or intends to do as follows.
Pilot studies Logistics projects
Organizational operations Logistics visibility
Logistics optimization
Pilot Studies Stage: The organization typically does not provide a stable environment for developing a new logistics management system for an RFID technology infrastructure. It undergoes a pilot case study of implementing and executing the infrastructur e. A one-dimensional approach is being explored. The one-dimensional implementation approach needs to be worked out. The study of strategies, goals, and objectives, the core component of the Adaptive Multi-Layer Business Process Model is not applicable.
Logistics Projects Stage: At this stage, policies for managing an RFID infrastructure project and procedures to implement those policies are established only after a pilot study has been successfully tested for imple- mentation. Successful practices do not mean the same processes to be implemented by the projects must be used. The organization takes a one- or two-dimensional implementation approach depending on the com- plexity of the RFID infrastructure and the customer–supplier relation- ships. After the organization has worked out and implemented the strategies, goals, and objectives, it then can proceed to the next layer of RFID-enabled business processes of the Adaptive Multi-Layer Business Process Model.
Organizational Operations Stage: The standard process for developing a new logistics management system is documented, based on integrated system development practices. An organizationwide training program is implemented to ensure that the staff and managers have the knowledge and skills required to fulfill their assigned roles in the logistics management system including the use of middleware technologies. The organization can move from one-dimensional to the two- or multidimensional implementa- tion approach. It moves to the layer of middleware technologies of the Adaptive Multi-Layer Business Process Model only when the organization operations have satisfied some criteria.
Logistics Visibility Stage: The organization establishes metrics to test for logistics visibility from one point to another in the supply chain. This allows the process of developing logistics with the acceptable measured limits.
The implementation approach applies to the customers’ all suppliers who send items to all designated distribution warehouses, and retail outlets.
The Adaptive Multi-Layer Business Process Model proceeds from the feedback of previous layers to the outermost layer: enterprise systems business processes, internal and external, but are not yet optimized.
Optimization Level: The entire organization is focused on continuous pro- cess improvement. The organization has taken proactive actions to prevent defects in the system from recurring. The implementation approach applies to the customers’ all suppliers who send items to all designated distribution warehouses or retail outlets. The Adaptive Multi-Layer Business Process Model remains in the outermost layer where enterprise systems business processes, internal and external, are optimized to gain productivity and operational efficiency.
When organizational maturity is high at the Logistics Optimization stage, the feedback of higher levels in the Adaptive Multi-Layer Business Process Model goes to the lower layers of the model for continuous business process improvement. High maturity does not mean organization maturity will stay high. The level of maturity may decline in response to emerging technolo- gies and new legislative regulations.
When it begins to decline, the implementation approach needs to be changed, and all four components of the Adaptive Multi-Layer Business Process Model need to be revised to improve business processes until it reaches the outermost layer. Instead of waiting for the maturity level to decline, the state of organizational maturity, the implementation approach and the Adaptive Multi-Layer Business Process Model need to be reviewed on a periodic basis, say every three years or so.
5.8.3.2 SCM Management
This SCM aspect looks at the intervening mechanism to integrate with ERP Systems (e.g., Oracle-PeopleSoft), Web services, handheld devices (e.g., The METRO Group Future Store), and smart shelves (e.g., Chain Pharmacy Operations). The intervening mechanism, whatever it is, cannot always close the enterprise system gaps without considering the opportunities and limitations of the mechanisms used in connecting the services via a network of business processes over the intranet and Internet. An organization may find that it is more practical, less costly, and more timely to connect via application calls or middleware technologies, to wrap a legacy application to Web services that requires frequent changes.
Changing code in a Web service is far faster than changing and recom- piling a long-running application. Although faster changes to code looks more attractive, there are other considerations we should look at that could affect the speed of getting the work done, such as:
Poor project management planning Wrong implementation approach
Low organizational and logistics maturity Static business processes
Performance issues
Limited contractual obligations of running Web services on different platforms
Customer demand for certain information that not readily available Just make sure your organization is mature enough or can grow in maturity to accept adaptively RFID technology in an SCM system using the right mix of implementation approaches. Your cost/risk measurement is worthless if you do not include the maturity factor and the components of the Adaptive or Predictive Multi-Layer Business Process Model in your measurement. Care must be taken when a provider of a supply management software product suite, including SCM tools is acquired by another com- pany. The acquiring company may choose to remake the products with additional features, to incorporate them into a larger back-end system, or to delete certain features that appear not to be profitable.