Information Model for LARGeSCM Interoperable Practices

doi:10.2498/iti.2012.0473

Information Model for LARGeSCM Interoperable Practices 1

Pedro Espadinha-Cruz1, Izunildo Cabral1,António Grilo1, Virgílio Cruz-Machado1 UNIDEMI, Faculdade de Ciências e Tecnologia, UNL, 2629-516, Caparica, Portugal E-mail(s): [email protected], [email protected], [email protected], [email protected]

interoperation of many entities to ensure the its successful implementation. This interoperation, through the information and services sharing, to ensure the successful of the practices implementation, is designed as interoperability. The main objective of this paper is to present a subset of an information model to support the LARG interoperable practices assessment. A class diagram is proposed to allow the storage of information/data, relating to each practice under study. The information class model presented in this study, aims at making a linkage to a case study developed by [2], in an auto-maker SC, namely between the focal firm and suppliers. The purpose of this case study was to evaluate the interoperability of those companies in implementing LARG SCM practices. The paper is structured as follows: Section 2 makes a review of LARG paradigms, focusing essentiality on concepts and management practices. In section 3, a brief review in business interoperability is conducted. The scope of interoperability measurement and assessment is adressed in section 4. The conceptual class diagram is presented in section 5. Limitations of the study and avenues for future work are in the last section.

Abstract. Lean, Agile, Resilient and Green have been emerging as the main management philosophies to enhance competitiveness in the market increasingly turbulent and volatile. Companies and their Supply Chains have been implementing some management practices, in order to improve their efficiency. Many of these practices require interoperation among two or more entities. The failure in implementing these practices highlights the need of companies in improving their ability of interoperation. The interoperability is a required role in a collaborative Supply Chain. The present work provides a conceptual class diagram to support the implementation and assessment of interoperable practices, in context of LARG Supply Chain Management.

Keywords. LARG, SCM practices, Business Interoperability, Class Diagram. 1. Introduction Lean, Agile, Resilient and Green (LARG) are four paradigms that have been emerging in the field of Supply Chain Management (SCM), as the most suitable strategies, to face global competition and fluctuating market conditions. According to [1], the ability to integrate these four different management approaches on the same Supply Chain (SC) is of great importance, in the strategic point of view, but rather challenging. The divergences and synergies between these four paradigms led to the creation of a set of practices, which are implemented at different levels of the chain. However, the implementation of many of these practices requires an high level of collaboration between companies, at different levels. These practices are designed as «interoperable practices». In this paper, «interoperable practices» are defined as a set of management strategies that involves two or more companies, on its implementation. For example, «reverse logistics» implies

2. LARG SCM paradigms: an overview SCM is the incorporation of all activities that add value to customers, since product design to delivery, integrating suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide cost while satisfying customer’s needs [3]. The basic purpose of Lean production is to increase profits by reducing cost, through completely eliminating waste such as excessive stocks, energy or work force [4]. According to [5], the basic lean concept is to do more with less (e.g., less human effort, less equipment, less

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enterprise, in order to conduct their business.” From the SC point of view, interoperability can be defined as the organizational and operational ability of an enterprise to cooperate with its business partners and to efficiently establish, conduct and develop IT-supported business with the objective to create value [16]. From all definitions existent in the literature, a smallest common factor can be derived: interoperability is about systems that can interoperate [13]. Some initiatives, such as, ATHENA [17, 18], ECOLEAD [19], Levels of Information Systems Interoperability (LISI) [20], Levels of Conceptual Interoperability Framework (LCIF) [21] traced a path to achieve improved interoperability in electronic systems and business [2]. Such frameworks provided information to achieve interoperability in three layers: business, knowledge and Information and Communication Technology (ICT) [2]. Based on the frameworks mentioned above, [22] defined a set of parameters that constrain or enable interoperability between organisations, designed as Business Interoperability Parameters (BPI): Business Strategy (BS), Organizational Structures (OS), Employees and Work Culture (EWC), Collaborative Business Process (CBP), Management of External Relationships (MER), Business Semantics (BSe) and Information Systems (IS). These BPIs was used by [2] as the baseline to assess the interoperability of LARG practice implementation between focal firm and suppliers.

time, and less space, while coming closer to customer requirements. Agile paradigm intends to create the ability to respond rapidly and cost effectively to unpredictable changes in markets and increasing levels of environmental turbulence, both in terms of volume and variety [6]. Agile paradigm argues that the production should be more responsive to customer [2]. Resilient paradigm, unlike the Lean paradigm, which focuses on cost reduction, unlike the agile paradigm that focuses on the speed to respond to the customers’ demands, is essentiality about the capacity to overcome problems, responding effectively to unexpected disturbances. According to [7], SC resilience is concerned with the system ability to return to its original state or to a new one, more desirable, after experiencing a disturbance, and avoiding the occurrence of failure modes. Green paradigm concerns with the effects of SC's activity on environment [2]. According to [8-11], Green SCM is an integrated environmental mindset in SCM, including green product design, green material sourcing and selection, green marketing, green consumption, green manufacturing processes, green delivery of the final product to the customers, and green end-of-life management of the product after its useful life.

3. LARG interoperable practices 3.1. Interoperability

3.2. Interoperable practices

How to enhance interoperability between stakeholders and improve efficiency of SCM is the key issue that needs to be addressed automaker industry. Today an enterprise’s competitiveness is to large extent determined by its ability to seamlessly interoperate with others [12]. Interoperability has been mainly approached from an Information Technology (IT) point of view or enterprise collaboration perspective [13]. The term interoperability is defined in [14] as the “ability of two or more systems or components to exchange information and use the information that has been exchanged. According to [15], interoperability means “a field of activity with the aim to improve the manner in which enterprises, by means of Information and Communications Technologies (ICT), interoperate with other enterprises, organizations, or with other business units of the same

As mentioned in introduction section, interoperable practices are all strategies that imply an interoperation between two or more entities. The eight BPIs mentioned previously was used, in conjugation with eight interoperable practices to assess the SC practices interoperability implementation. The practices used are: (P1) Environmental collaboration with business partners; (P2) Reverse logistics; (P3) Supplier involvement in conception and design of products; (P4) Use of compatible IT between actors; (P5) Use of IT to develop visibility to a clear view of upstream and downstream inventories; (P6) Development of security initiatives (mitigate risk and contingency plans); (P7) Lead time reduction; and (P8) Flexible transportation. All of these practices require a joint interoperation in its implementation, involving always two or more entities. For

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The second branch of interoperability study focuses in IT perspective. Therefore, it proposes an information model which contains the information needed to implement each one of the LARG SCM practices. Also, this information model will assist in establishment of interoperability metrics for a direct performance analysis of the SC.

example, to reduce the lead time, entities in different levels must work together to achieve it. If the entities do not interoperate, the reduction of lead time in a given entity may not reflect on the reduction of the global lead time.

4. SCM practices measurement

interoperability

5. Information model to support LARG practices implementation

This work falls within the scope of interoperability evaluation in the implementation of management practices in the LARG supply chain. Its spectrum of action focuses on the evaluation of practices (mentioned in section 3.2) implementation, in two parallel analysis: (1) analysis directly under the actors of the chain using Multi Criteria Decision Analysis (MCDA) based on Fuzzy Sets [2] and Analytical Hierarchy Process (AHP) [23]; (2) definition of the information model that will support the needed parameters to measure interoperability of the current practices. The scope of this measurement if translated in the following framework:

This section aims at presenting a conceptual class diagram to support interoperable practices implementation. To build this class diagram, are identified, previously a set of information (classes and attributes) that support each practice mentioned in section 3.2. Information about environmental collaboration, reverse logistics, product development, IT systems, security initiatives, lead time, and transportation are needed to build the class diagram. For instance, to implement the practice 'lead time reduction’ is important to know the order, production and delivery lead time. By comparing this lead time, the decision-maker can find the process where the time should be reduced. Time is related to two particular paradigms, namely lean and agile. The proposed class diagram represents the structural information components of the LARG interoperable practices Information System (IS), and identify the most important classes and attributes of each interoperable practices. The conceptual class diagram proposed is shown in the Fig. 2.

Value Chain

Physical

Operational

Business Process

Transactional

Information Model

Interoperability Metrics

5.1. Core classes and attributes

Figure 1. Scope of interoperability measurement.

Some classes identified to support the interoperable practices implementation are: company, IT system, Product, Order, Transport Vehicle, Delivery, Returns, Security Plans, Collaborative Projects, etc. For each class is identified a set of attributes that characterize each practice implementation. The class “Company” supports the group of companies that comprises the SC, instead of having a class for Focal Firm, Suppliers, Distributors, among other. For this reason, it is created a class “Type” to highlight the position of each company. Two important attributes in this class are capacity surplus and degree of intercommunication. The first, highlights if the company has capacity to respond to possible increases on production

Previous work from [2] focused on the selection of LARG SCM practices whereas involved activities between actors (Focal Firm and Suppliers). To assess each BIP and each interoperable practice, it was made a questionnaire to the SC supervisor of the focal firm. Hence, it was able to identify in which practices interoperability is currently lacking and in what BIP is necessary to act to improve its implementation. This contribution presented a tool to help managers evaluating the current situation and the desired situation in order to identify where interoperability is currently lacking.

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is to store data about all ICT system of all companies in the chain.

(security initiatives). The second, indicates if the performance of the company in intercommunicating with their business partners. Other important class is “IT system”. This class Create

Collaborative_Project Develop

1..*

0..*

1..* IT System

Company

ID_IT : Integer Designation : Integer Description : Integer 1..* 1..* Function : Integer Have Compatibility_Degree : Integer

ID_Project : Integer Designation : Integer Dsccription : Integer Companies_Involved : Integer

ID_Company : Integer Designation : Integer Capacity : Integer Degree_intercommunication : Integer Energy_consumption : Integer

0..*1 ID_Type : Integer To be Description : Integer Product Development ID_Prod_Dev : Integer Date : Integer

1..*

1

ID_Vehicle : Integer Designation : Integer Description : Integer Capacity : Integer Flexibility : Integer

0..* To be 1 Vehicle Type ID_Type : Integer Type : Integer Class : Integer

0..*

Have

Place/Receive

Produce

0..* Order

1..*

0..*

ID_Order : Integer Description : Integer Order_date : Integer EOQ : Integer State : Integer

1..*

Alternative Production ID_Alt_Production : Integer Description : Integer Lead_Time_Prod : Integer

Environmental Actions ID_Env_Proj : Integer Reason : Integer Place : Integer Date_Implementation : Integer

Product ID_Product : Integer Designation : Integer Description : Integer Production_LeadTime : Integer Delivery_LeadTime : Integer

Alternative Routing ID_Alt_Routing : Integer Description : Integer Lead_Time : Integer

Alternative Transportation ID_Alt_Transportation : Integer Description : Integer Capacity : Integer

Recicled ID_Material : Integer Cost_recycling : Integer Quantity_Recicled : Integer

1..* Be requested Delivery

1..*

1..* Delivery

Used

0..*

Type

1 Trnsport Vehicle

Security Plans ID_Plan : Integer Designation : Integer Description : Integer Finality : Integer Cost : Integer

1..*

ID_Delivery : Integer Delivery_Date : Integer Deliver_LeadTime : Integer State : Integer

Returns 1

0..* Return

ID_Return : Integer Description : Integer Quantity : Integer Reason : Integer

Reused ID_Reused : Integer Cost_Reuse : Integer Quantity_Reused : Integer Destination : Integer

Figure 2. LARG interoperable practices data model.

“security plans”. To support P8, “flexible transportation”, a class designed “Transport Vehicle” is created. This class is related with the class “Vehicle Type”, meaning that vehicles can be different, and with different roles.

It is important to know the IT system of each company, their role and compatibility, to assess their capability to interoperate. Two important attributes in this class (IT System) are, “function” and “compatibility degree”. This second attribute, relates the compatibility of each IT system with others, inside the company or inside the SC. The classes “Order” and “Delivery” are important because offer important information about lead time. By comparing the lead time of different processes (order, production, delivery), it is possible to find how to reduce the lead time. To highlight the practice P2, “reverse logistics”, a class designed “Returns” is created to allow saving information about all flows of material in reverse logistics. Other class that may be related with this practice is “Transport Vehicle”. Information stored in this class, such as capacity can indicate if the company has infrastructure to support that practice. The class “Collaborative Project” is to store information about common project/initiatives among the various entity in the chain, namely, related to product development and environmental projects/initiatives. Information to support the P6, “development of security initiatives” is stored in the class

6. Conclusions and future works The present work contributes to a syntactic approach in interoperability mitigation, making use of the latest developments in business interoperability applied to innovative Lean, Agile, Resilient and Green Supply Chain Management strategies. Settling on the problematic of dealing with complex networked collaboration environments subject to interoperability, the present work provides a framework and an information model that establishes the structure of information stored and exchanged between actors in a LARG SC. The contribution of this information model is to provide the information minimal requirements when implementing the interoperable practices mentioned on section 3.2. This make possible to monitor activities within and without SC. For instance, logistic activities related to practice P7

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[7] Carvalho H, Machado VC. Lean, agile, resilient and green supply chain: a review. Proceedings of the Third International Conference on Management Science and Engineering Management. 2009; p. 66-76. [8] Denf L, Wang X. The Research of New Integrative Green Supply Chain Management under Recycling Economy. Science and Technology Progress and Police 2008, 25: 34-36. [9] Guo M, Zhao XN, Wang YM. The Strategies of Enterprise Substantial Development: Green Supply Chain Management. Science and Technology Management Research 2008. 6: 255-257. [10] Li XZ, Wang W. The Theory of Green Supply Chain Management. Commerce Times 2008. 13: 20-21. [11] Srivastava SK, Green supply-chain management: A state-of-the-art literature review. International Journal of Management Reviews 2007. 9: 53-80. [12] Zhang Y, Liu S, Wu L, Jiao Y. Serviceoriented Enterprise Interoperability in Automobile Supply Chain Management Computer Science and Information Systems 2010. 7: 31-49. [13] Naudet Y, Latour T, Guedria W, Chen D, Towards a systemic formalisation of interoperability. Computers in Industry 2010. 61: 176-185. [14] IEEE Standard Glossary of Software Engineering Terminology. IEEE Std 610.12. 1990. [15] Figay N, Man-sze L, Crave S, Grilo A. Unleashing the Potential of the European Knowledge Economy: Value Proposition Enterprise Interoperability. European Commission. 2008. [16] Christine L, Wend K Towards an Excellence Framework for Business Interoperability. Proceedings of the 19th Bled eConference eValues. 2006 June 5-7. Bled, Slovenia; p 1-16. [17] Berre AJ, Elvesaeter B, Figay N,. Guglielmina C, Johnsen SG, Karlsen D, Knothe T, Lippe S. The ATHENA Interoperability Framework. Proceedings of 3th International Conference on Interoperability for Enterprise Software and Applications, IESA. 2007, p. 569-580. [18] ATHENA. Business Interoperability Framework D.B3.1. 2007.

are stored in the classes “order” and “delivery”. These allow to track the lead time and to analyse the process of order, production and delivery. The analysis of dyads will ascertain the extent to which actors are interoperable. In future work, will be modelled each interoperable SCM practice in order to permit mapping the various flows (material, informational and transactional) and activities to design a real-time measurement model to analyse B2B perspectives. This will permit to map gaps of interoperability in Supply Chain Network.

7. Acknowledgements The authors thank the Fundação para a Ciência e Tecnologia MIT project (MITPt/EDAM-IASC/0022/2008) for funding this research work. Pedro Espadinha da Cruz and Izunildo Cabral are supported by a MSc and PhD fellowships on this foundation, respectivelly.

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Engenharia Mecânica e Industrial, Universidade Nova de Lisboa, Caparica, Lisboa. 2010. [23] Espadinha-Cruz P, Grilo A, Puga-Leal R,. Cruz-Machado V. A model for evaluating Lean, Agile, Resilient and Green practices interoperability in supply chains. Proceeding of the International Conference on Industrial Engineering and Engineering Management (IEEM). 2011 December 6-9. Singapore; p. 1209-1213.

[19] ECOLEAD Consortium. Characterization of VBE value systems and metrics. ECOLEAD Deliverable D. 2006. [20] DoD. Levels of Information Systems Interoperability (LISI). 1998. [21] Tolk A, Muguira JA. The levels of conceptual interoperability model. Fall simulation Interoperability Workshop, Orlando, Florida. 2003; p. 1-11 [22] Aneesh Z. .Framework for a business interoperability quotient measurement model. Master Thesis. Departamento de

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