B2B: ESCM, INDUSTRY 4.0 AND FACTORIES OF THE FUTURE

B2B: ESCM, INDUSTRY 4.0 AND

FACTORIES OF THE FUTURE

Electronic Transactions

Dr. D. Panopoulos, Prof. D. Askounis

Desicion Support Systems Laboratory, NTUA Electronic Transactions - B2B - eSCM, Industry 4.0 and Factories of the Future 1

Business to Business

Transactions


Towards eBusiness Processes 1/3

Desicion Support Systems Laboratory, NTUA Electronic Transactions - B2B - eSCM, Industry 4.0 and Factories of the Future

Manufacturer

Consumer

Wholesaler

Distributor

Retailer

Manufacturer

Consumer

Intermediates

Manufacturer

Consumer

E-intermediaries

Manufacturer

Consumer

t

3



Traditional

Traditional

Nowadays

Supplier Manufacturer Distributor Customer

Digital Value Network

Suppliers Manufacturers Distributors

Customers

4



Customers

Suppliers

Partners

Manufacturers

Procurement

IT Consulting

Hardware/

Infrastructure

Software

R & D

Sales

Finance/

Accounting

ICT

Interfaces

5

Competitiveness in the Modern World


Porter’s Five Forces

Threat of Potential Entrants

Bargaining Power of Buyers

Threat of Substitution

Bargaining Power of Suppliers

Competitive Rivalry

6

eBusiness and Competitiveness

Low Prices and Differentiation/Options are keywords for B2B

ICTs are in a position to:

• Lower Supply Chain Operations

• Minimize Order Handling Expenses

• Lower Distribution Costs

• Shorten Delivery and Response Times

To build more attractive and quality based products

= Strengthen enterprise’s position in the market


B2B General Characteristics

• Today, most B2B Transactions are Client-Server based

• Web is the main platform used

• Cost in hardware (and software) is reasonable and low

• Systems are user-friendly

But customisation is pricey and difficult!

Offered some times by Application Service Providers (ASPs), guaranteeing operation with high security and availability

B2B transactions rely (often) on Value Added Networks (VANs): Hardware, Software and Infrastructure for data exchange


Salesforce.com


Salesforce.com


Β2Β Benefits – Operational Level

• Ease and Automation of Business Transactions

• Lowering Information Processing Costs

• Improving Information Accuracy

• Lowering Inventory related Costs

• Minimizing Human Errors

• Enable Electronic Payments between partners

• Getting rid of traditional Intermediaries

• but others emerge!! – Consultants, IT Integrators, Providers of

platforms for B2B


Β2Β Benefits – Strategic Level

• Acceleration of Business Cycle

• Re-orientation possibilities (in Operations, ICTs, etc…)

• Improvement of offered services

• Strengthening the Brand Name

• Multiple competitive advantages


Lean Manufacturing


B2B Examples

• Electronic Document Exchange• Invoices

• Contracts

• …..

• Electronic Supply Chain Operations• Raw Material Planning

• Equipment Monitoring

• ….

• Electronic Collaboration• Resource Sharing

• Data/Information Sharing

• ….

• Electronic Provision of Services/Goods


Today’s B2B World is full of….

• Different Systems and Installations (SAP, IBM, CAS, Oracle,..)

• Different set of standards (XML, JSON, ebXML, ebisXML,

Rosettanet, UN/CCTS, RDF, …..)

• Different Architectures (Centralized, Federated, Cloud based,

Broker based, …..)

• Different Communication mechanisms/channels


Hot Topics Include…

• Data

• Services

• Infrastructure

• People

• ….

Interoperability

• Country Legislation

• Domain Legislation

Legal Rules

• Unspoken Rules

• Common Rules & Ethics

Business Rules


Again the need of a MIDDLE man -

The Middleware• Middleware consists of computer software for connecting applications

• Connects software components or people and their applications.

• A set of services that allows multiple processes running on one or more

machines to communicate and interact.

• Runs on top of web servers, application servers, and similar infrastructures

that support application development and delivery.

• Middleware is especially integral to modern information technology based

on XML, SOAP, Web services, and service-oriented architecture.

• Examples include EAI (Enterprise Application Integration) software,

telecommunications software, transaction monitoring systems, and

messaging-and-queueing software.

But there are also many efforts for common standards!


Electronic Supply Chain

Management (eSCM)eSCM, MRP, MRP II, ERP, CRM,


Definitions 1/2

“A supply chain is a system of organizations, people,

activities, information, and resources involved in moving a

product or service from supplier to customer.

Supply chain activities transform natural resources, raw

materials, and components into a finished product that is

delivered to the end customer.”Source: Wikipedia

Main Target

Supply = Demand


Definitions 2/2

Consequently….

The eSupply Chain

is a supply chain

which is managed

electronically


Types of Supply Chains (1/2)

• Internal Supply Chains

• Forward Supply Chains


Forward Supply Chain

25

Types of Supply Chains (2/2)

Reverse Supply Chains


Circular Supply Chains

26

Why is managing SCs a difficult task?


Degree of

Difficulty

Multiple Suppliers

Different Tiers

(Supplier Levels)

Multiple Internal

Departments

Numerous Business

Operations

Large Numbers of

Clients

Different Types of Products

27

Typical Problems in SC Networks 1/2

• Size is a problem!

• Geographical Spread

• Number of Horizontal Nodes

• Number of Tiers

• Manual or Semi-Automated Processes create

bottlenecks

• Information Flow is problematic

• Material Flow is problematic

• Real-Time responses are not entirely possible

• Decisions are delayed


Typical Problems in SC Networks 2/2

• Unavailability of Monitoring mechanisms

• Delays between Suppliers

• Delay in the delivery of the end product

• Uncertaintly of product’s attributes (cost/delivery/quality/etc…)

• Machinery and Material Issues

• Delays in Production

• Suppliers Mis-cordination

• Product Failures

• Third Party Supply Management Services (especially for Digital Firms)

• Difficult Coordination

• Loss/Unavailability of Information

• Lack of native Interoperability


Typical Operations in a SC

Product Information Retrieval

Order Placement/Retrieval

Invoicing

Inventory Control

Shipment Monitoring

Logistics Management

Financial Information


How can eSCM systems help?

• Suppliers can be identified and contacted at the blink of an eye

• Orders can be placed over the Internet, EDI, Intranet, Extranet

• If products are digital, orders can be instantly processed

• ePayments can minimize ordering fullfilment duration and payment time

• Inventories can be minimised, both by build-to-order processes and byinformation delivered fast and accurately to suppliers

• Products can be co-designed and co-developed achieving higher quality

• Production can be continuously monitored and optimised


Common Operations and Infrastructures of

eSCM• Automated Supplies Fill-Up

• Suppliers Information Management

• Collaborative Design

• Collaborative Product Development

• Collaborative Production Schedulling

• Production Management

• Production Monitoring

• Marketplaces and B2B networks


SCM Software Systems 1/2

Supply chain management software (SCMS) refers to a range of software tools or modules used for:

• executing supply chain transactions

• managing supplier relationships

• controlling associated business processes.

An SCM System typically includes

1. Customer requirement processing

2. Purchase order processing

3. Inventory management

4. Goods receipt and Warehouse management

5. Supplier Management/Sourcing


SCM Software Systems 2/2

SCM systems are also able to forecast! (or at least should be…)

Balance between supply and demand through better planning

and a-priori knowledge of future needs

• Improved business processes

• Analysis of consumption

The more ICT we put into it, the more powerfull it becomes (and

complex as well…..)


Material Requirements

Planning (MRP)Subcategory of eSCM


MRP Systems

Material Requirements Planning (MRP) is a production

planning and inventory control system

MRP systems are software-based (manual MRP is also

possible)

Main goals:

• Minimize inventory levels

• Ensure availability of end products

• Plan manufacturing/delivery/purchasing


MRPII Systems

Manufacturing Resource Planning (MRP II) is a method for the

effective planning of all resources of a manufacturing system.

• Operational planning

• Financial planning

• Resource planning

• Simulation capabilities

A total management concept for using human resources in a

company more productively


Enterprise Resource Planning

(ERP)Subcategory of eSCM


ERP Systems 1/2

ERPs (Enterprise Resource Planning) aim to:

• facilitate the flow of information between all business functions inside the boundaries of the organization and

• manage the connections to outside stakeholders.

Integrates internal and external management information across an entire organization

• Finance/accounting

• Manufacturing

• Sales and service

• etc…

ERPs are systems based on integrated software application.


ERP Systems 2/2

• Real Time Operation

• A common/shared DB to serve all modules

• A user friendly environment, same in all modules

Data Migration is a very important task!!!

Team Training is also important for the smooth operation and integration of the ERP in an enterprise

ERPs are the descendants of MRP and MRPII systems

They look and manage the whole picture of an organisation


Customer Relationship

Management (CRM)Subcategory of eSCM


CRM Systems 1/3

Customer Relationship Management (CRM) includes all aspects

of interaction that a company has with its customer.

Enables an enterprise to:

• Understand the customer

• Retain customers through better customer experience

• Attract the interest of potential new customers

• Win new clients and contracts

• Increase profitability

• Decrease customer management costs


Enterprise Resource Planning

CRM Systems 2/3

Technologies used:

• Data Bases

• Web Technologies (Cookies, etc..)

• Interactive Voice Response

• Call Centers

• Data Mining

• Mobile Technologies

• Social Media

Evolution:

• “Extended Relationship Management” (XRM) extends CRM disciplines to secondary allies such as government, press, and industry consortia.

• A shift from “push CRM” toward a “customer transparency” (CT) model, due to the increased proliferation of channels, devices, and social media (DeGregor, D. (2011))


CRM Systems 3/3

Why do companies matter about CRM???

Some Facts:

• Selling to a new buyer is 6x more expensive

• One unsatisfied client will inform 8-10 other people

• Increasing the loyal clients by 5% results in 85% revenue

increase

• 70% of complaining clients will come back if served properly


ROI of such systems??

Gartner: In >$1 billion on software not being used

KEN Insights: <40% of 1,275 participating companies had end-user adoption rates above 90%

Many corporations only use CRM systems on a partial or fragmented basis

UK Survey: 4 out of 5 of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed.

43% of respondents said they use less than half the functionality of their existing system.


Necessary Conditions for Success

Collaborative technologies/environment for operations and supply

chain management improvements

Successful Operation depends heavily on:

• The common vision by all parters of eSCM as a strategic advantage

• The visibility of information across the network

• The speed, cost, and quality of service

• The tightening of integration of the Supply Chain

• The proper risk-preventing/mitigation mechanisms

• Sharing of Knowledge

• Sharing of Risks

• Fair Compensation Rules


Factories of the Future

and Industry 4.0Virtual Enterprises, Manufacturing 2.0, Industry 4.0


Virtual Enterprises (VE)

«the ability to create temporary co-operations and to realize the value of a short

unpredicted business opportunity that the partners cannot (or can, but only to

lesser extent) capture on their own»

Fundamental features:

• dynamics of network reconfiguration

• virtuality,

• external entities as environments for enabling or supporting the VE integration

• reconfiguration dynamics

• 4 main types of «opportunistic aggregation»:

• opportunity-driven

• capability-driven

• supplier-chain, and

• bidding consortia Camarinha-Matos LM, Afsarmanesh H, Galeano N, Molina A. Collaborative networked organizations –

Concepts and practice in manufacturing enterprises. Computers & Industrial Engineering. 2009;57(1):46-60.


Collaborative Networks


FInES Collaborative Networks Task Force (2012) Taxonomy of Collaborative Networks Forms

49

Manufacturing 2.0 Enterprise

Desicion Support Systems Laboratory, NTUAElectronic Transactions - B2B - eSCM, Industry 4.0 and Factories of the

Future

Sales Manager

MANUFACTURINGENGINEERING

SALES & MARKETING

FIELD SALES

Design Manager Plant Manager

Ordersreturned

VP SalesVP Manuf.

CEO

Planners

CIO

CUSTOMER

SUPPLIERS & SUBCONTRACTORS

CUSTOMER

EXTERNAL DESIGNER

Customers in-the-loop

◼ Quality and sustainable products for customers

◼ Design thinking and customisations

◼ Customer collaboration

Agile Manufacturing Systems & Processes

◼ Seamless integration of disparate systems and robots

◼ Real-Time enforcement of engineering changes, quality, regulatory, requirements in the front line

◼ Advanced algorithms on large data sets & manage by exception

Seamless Factory Lifecycle

Management

◼ Controlling and holistic planning of future factories

◼ Predictive and condition based maintenance

◼ Status/throughput/KPI information on-demand on-mobile for decision makers

People at the forefront

◼ Better knowledge delivery mechanisms

◼ Continuous skills improvement

◼ Assistance tools for aged workers

◼ Intuitive e-learning tools for all

Collaborative Supply Networks

◼ Great collaboration between OEMs and subcontracts through standardized interfaces

◼ Total visibility of production, inventory, and materials

◼ Quick response in supply chain planning

◼ New paradigms such as “products as a service” and “after-sales services”

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51

Towards Digitisation

Traditional Organizations

• Inflexible IT-Systems: application silos

• Business and administrative processes

• Hierarchy: Internal and externalcommunication

• Limited information

Digital Organizations

• Scalable IT-Systems: based on cloud, mobile, big data and collaboration

• End-to-End processes: based on collaboration and real-time KPIs

• Social interaction: with employees, customers and partner

• 360° information


The basis for a radical shift in Industry


New Age

Industry

Internet of

Things

Big Data

Cyber Physical Systems

Big Data


Volume (bigamount of

data)

Variety (manydata formats)

Velocity (high performance)

Value (valuable

information)

Veracity (quality of

data)

Volatility(storage of

data)

Big data is like teenage sex: everyone talks

about it, nobody really knows how to do it,

everyone thinks everyone else is doing it, so

everyone claims they are doing it...Dan Ariely, Duke University

Wikipedia:

“an all-encompassing term for any

collection of data sets so large and

complex that it becomes difficult to

process using on-hand data

management tools or traditional data

processing applications.”

Cyber Physical Systems


Smart networked systems with

embedded sensors, processors and

actuators

• Sense, and

• interact with physical world

What’s the Internet of Things

Wikipedia: The Internet of Things, also called The Internet of Objects, refers to a wireless network between objects, usually the network will be wireless and self-configuring, such as household appliances.

• A network of Physical Objects that can interact with each other to share information and take Action.

• IoT can also be refered to as Machine to Machine (M2M) technology.

Extending the current Internet and providing connection, communication, and inter-networking

between devices and physical objects, or "Things," is a growing trend that is often referred to as the

Internet of Things.


Industry 4.0


The four industrial revolutions

Source: Wikipedia

Industry 4.0* - The fourth industrial revolution

• Current trend of automation and data exchange in

manufacturing technologies.


CPS monitor physical

processes, create a virtual copy of

the physical world and make

decentralized decisions.

IoT enable communication and cooperation of CPS and with humans in real

time

Internet/Cloud enables internal

and cross-organizational

services

Big Data Analytics

provides insights

* Originates from a German Governmental project: "Industrie 4.0"

The“Smart”Factory

Industry 4.0 - Design Principles

• Interoperability: Machines, devices, sensors, and people to interconnect interact.

• Information blending: Create a virtual copy of the physical world by enriching digital plant models with sensor data to be available to all need-to-know cases.

• Technical assistance: Support humans by aggregating and visualizing information for making informed decisions. Cyber physical systems to physically support humans by conducting a range of tasks.

• Decentralized decisions: Cyber physical systems to make decisions on their own and to perform their tasks as autonomous as possible.


Industry 4.0 - Challenges

• Knowhow protection

• IT Security

• Reluctance to Change

• Existing workforce positions

• Ever-changing skills-sets

• IT redundancy

• Standards

• Reliability and Stability

• ….


The IMAGINE ProjectInnovative End-to-End Management of Dynamic

Manufacturing Networks (FP7-FoF.PPP)


Context


Limited point-to-point connections

between Business IT & Factory

Automation

• No global visibility

• No timely reaction to problems &

changes

• No easy entry points for SMEs

From static & inflexible to dynamic on demand manufacturing networks

Network Management

Product Lifecycle

ITSupport

61

Synoptic View of the DMN Lifecycle Phases


IMAGINE DMN Framework


• Relies on end-to-end integrated ICT solutions that effectively enable the management of networked manufacturing supply chains

• Is market-oriented with focus on value chain streamlining and support for innovative business models

Production Project

O1.1

O1.1.1

O1.1.2

O1.2

O1.2

Planning Manufacture DeliverSourcing

SC1

SC2

SC4 SC5

SC3

SC6

DesignConfigureMonitor &

Govern

blueprint blueprint blueprint blueprint

Collaboration platform & Information Bus

CRM ERP SPC WMS APS LIMS

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IMAGINE DMN Framework Lifecycle


An innovative flexible

service engineering

methodology that supports

and guides developers

when developing large-

scale, complex

manufacturing applications

on integrated collaborative

manufacturing

management systems

Monitoring &

Governance

Suite

Simulation

Production Integration Bus

CRM ERP SPC WMS APS LIMS

Partner

Blueprint

Repository

Manufacturing

Blueprint

Repository

Quality

Assurance

Blueprint

End-to-end

Production Process

Repository

End-to-End

Manufacturing

Design Suite Network

Configuration

Blueprint

Customizer

Profile

Selector

Profile

ComposerSimulation

Network

Configuration

Monitor

Compliance

Assurance

64

People/Partners

Materials

Equipment

Personnel & partner resources managed

for production

Equipment resourcesmanaged for production

Material resourcesmanaged for production

Process Segments

View of production flow processes

ProductDefinition

Information

ProductionSchedule

Information

Production PerformanceInformation

What resources areavailable for

use for production

What is needed to make a product

What to make &resources to use

& when

What actual production was achieved & what resources were used

Product Capability/

CapacityInformation

Four Resource Category Model Four Manufacturing Operations Information Model

The ISA-95 inspired by 4x4 manufacturing resource and information model

extended with LL requirements & network, integration concerns.

Manufacturing Blueprint Model:

4x4 Manufacturing Model


Partner & Manufacturing Blueprints


Partner Blueprint

Capture unique skills and capabilities in the DMN and

makes them available to potential partners to help address

opportunities in new network configurations. It includes:

• Company Background: contact information, size,

annual reports, reference customer, financial growth

and annual turn-over

• Products / Services: types of product and services,

market, industry sector, geographical region, type of

material (BOM)/information needed (e.g., CAD data).

• People: their skills, track record

• Processes: key processes, key process skills,

• New Potential: potential new products, case histories of

other network collaborations,

• Qualifications: name of standards awarded, patents,

references to customers.

• Up-to-date information about current mean delivery

times

• Up-to-date information about current mean production

times

• Up-to-date information about available stock.

Product Blueprint

Uses MBOM information. It includes assemblies, parts,

sub-components, equipment, elements of work

procedures & resources needed to accomplish

production requests:

– Resource Definition Information –material, &

equipment resource definitions used for production.

Also segments of production.

– Product Definition Information –resources &

segments required to make a product.

– Environmental Information - CO2 footprints,

greenhouse gas emissions, spills, and, waste

(hazardous & non-hazardous).

– Production Schedule Information – minimizes

production time and costs, by proving a production

facility with information regarding what to make,

when, with which staff, and on which equipment.

– Production Capability Information –current

capabilities of production for equipment,& material. It

also defines capabilities that are available for

production.

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End-to-end Process

& Quality Assurance Blueprints


End2end Process Blueprint

It identifies four core processes that manage business rules, supply chain performance, data collection, inventory, capital assets, transportation, planning configuration, regulatory requirements & compliance, on the basis of a vendor neutral PLM product generation data:

• Plan: targets sourcing, manufacturing & delivery requirements. It establishes plans for the whole product development.

• Source: procures goods & services to meet planned or actual demand. It schedules deliveries, receives, verifies, and transfers products, & authorizes supplier payments. Identifies and selects supply sources.

• Make: transforms a product to a finished state to meet planned or actual demand. It schedules production activities, issue product, produce and test, package, stage product, and releases product to deliver.

• Deliver: provides all order management steps from processing customer enquiries and quotes to routing shipments and selecting carriers.

Quality Assurance Blueprint

Structures a collection of metrics for operations analytics

(MESA). Forms the foundation for activity-based metrics

for mfg operations, logistics, & costing:

– Production Schedule Information –what products are

to be made. It contains start or completion times,

and it defines the resources (personnel, equipment,

and material) to be used in production.

– Production Performance KPIs – This contains

production KPIs, defined in terms of equipment, and

material used per production segment, per product

or scheduled item.

– Environmental KPIs.

– Manufacturing Metrics include

• Manufacturing Lead Time

• Rate of Production

• Production Capacity

• Work in Progress

• Design Times

• Utilisation/Availability

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QUESTIONS

[email protected]

Dr. Panopoulos D. - [email protected]


mailto:[email protected]

B2B: ESCM, INDUSTRY 4.0 AND FACTORIES OF THE FUTURE

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