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A case study - rules in manufacturing

I was reading about a client of ours, Air Products, last week and I thought they made an interesting case study. I also reviewed a presentation they made at the Americas SAP User Group. Air Products is a $8bn global supplier of Gases, Chemicals and Services to Electronics, Healthcare, Energy and Process Industries. It has operations in more than 40 countries, with major centers in US, Europe and Asia. It uses a single global instance of SAP/ERP that now covers over 80% of business, including most of N America and Europe. Material Masters (data records containing all the basic information required to manage aproduct)are very complex at Air Products. They have 300,000 Material Masters in 50 Supply Chains covering Chemical and Gases Finished Goods and Raw Materials (bulk and packaged). Their masters include returnable containers; MRO(Maintenance Repair Operation)items; discrete manufacturing finished goods, sub-assemblies, components and bulk raw materials; services; and tools. Approximately 200 data fields are in use and masters must be extended to different combinations of more than 1500 plants. In other words, it's complex. The Global Material Master organization controls all material creation and extension and modifications with team members in US, Europe and Asia. Functional experts have access to specific views (e.g. MRP, Purchasing, Costing, QM..) and dependent data (e.g. Bills Of Materials, Recipes, Routings, Inspection Plans, Purchasing Info Records, Source Lists, Document Info Records...). The old process had issues with:

  • Lead time Manually intensive process frequently bottlenecked with queues for some materials extended to many weeks
  • Complexity Businesses found it hard to know how to create materials – spreadsheets were large and complex and rules were only understood by two people – one for hard goods, one for Chemicals/Gases
  • Consistency and Quality Frequent rework was common and attempts to automate and speed up the process allowed in bad data

The Material Master Automation project created a revised process using a new Web application, a "Rules Engine" (Blaze Advisor) and SAP Workflow. This new process collects information (asking questions) based on rules, interacts with SAP Workflow for routing requests to reviewers and approvers, and downstream activities and finally generates SAP load files. The application displays initial questions, the user answers these questions, and presses “Next” and this verifies and saves the answers. The rules engine then determines the next group of questions and so on. This new process is designed to deliver business responsiveness, flawless execution, cost-effectiveness and flexibility. The new process has many benefits notably

  • Speed – business responsiveness went from weeks to days
  • Accuracy – flawless execution ensuring it is right the first time
  • Reduced manual activity – reduced cost and higher productivity, reduced downstream activity, more precise workflow communication and less chasing/tracking
  • Reduced learning curve - flexibility

The key changes were

  • From: Rules in people’s heads, applied manually in retrospect
    • To: Rules codified in system, compliance facilitated and enforced at time of data entry
  • From: “Rough and ready”
    • To: User-friendly
  • From: Manual
    • To: Computer-assisted

The results speak for themselves - in Phase 1 (Maintenance and Buy/Resell hard goods) some 1612 materials requested with an average cycle time of 1.6 calendar days (vs42 calendar days previously).

I like this case study as it shows how rules, and a decision service built with rules, can simplify and improve workflow (see the section on BPM for a general discussion of this) and enhance enterprise applications (see this for other comments). It also delivers on the whole decision yield concept - better precision (fewer errors), consistency (repeatable process), agility (much easier to change the rules), speed (much faster) and cost (far less manual work and thus less cost).

There is a full case study here on the Fair Isaac site

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