Pedro Emanuel Botelho Espadinha da Cruz Business Interoperability: a methodology to analyse and re-design interoperable buyer-supplier dyads Programa Doutoral em Engenharia Industrial Pedro Emanuel Botelho Espadinha da Cruz Mestre em Engenharia e Gestão Industrial Licenciado em Engenharia Química Orientador: Professor Auxiliar com Agregação António Grilo

Agenda Research problem Objectives and research questions Research methodology The ADADOP method Case studies Conclusions Agenda

Research problem Cooperation between companies is an common strategy in the current industrial context. Supply chains can be described as a cooperative network where supply chain management focuses on how companies integrate and coordinate processes, use technology, and share knowledge and resources, treating all members of the value chain as an unified business entity. The condition that makes such supply chain activities possible is that companies are interoperable. Research problem

Research problem “Business interoperability is an organizational and operational ability of a company to cooperate with its business partners and to efficiently establish, conduct and develop information technology (IT) supported business with the objective of creating value”. (Legner & Wende, 2006) Why is business interoperability so important? It is considered an enabler that makes possible to execute the supply chain operations seamlessly, easing their alignment and the information flow, guaranteeing high performance and competitiveness. Interoperability problems affect IT-supported interactions. Research problem

Objectives and research questions Main objective Provide an integrated methodology that systematizes the analysis and re-design of the interoperable buyer-supplier dyads to improve their performance and value-added to end-customer. Unit of analysis: buyer-supplier dyads. Main research question How does the business interoperability problem identification and solving may be systematized in order to re-design buyer-supplier dyads, improving their performance and value? Two areas: Interoperability problem identification and characterization The integration of design, modelling and performance measurement Objective and research questions

Research methodology Objectives and Research questions Literature review Interoperability Supply chain management Engineering Design Process modelling The ADADOP method Case studies Single case study In-depth case study Different perspectives of the same dyad Objectives and Research questions   ADADOP - A+D stages, AD framework and Optimization Procedure. Research methodology

Framework for business interoperability impact on buyer-supplier dyads strategic basis aim High-level proposition: interconnect interoperability issues in a systematic manner so one can identify and solve problems to accomplish a considered interoperable buyer-supplier dyad, which features higher performance and value created. The ADADOP method

Representation of the interoperable buyer-supplier dyad Taxonomy of interoperability types. Business-specific context provided in SCM practices Examples of SCM practices: Strategy alignment Supplier evaluation systems Trust Knowledge sharing Information sharing Interoperability types decomposition The ADADOP method

Representation of the interoperable buyer-supplier dyad Interoperability criteria The ADADOP method

The ADADOP method application Two stages method: Determine the buyer-supplier dyad’s interoperability conditions Optimise interoperability. ADADOP - A+D stages, AD framework and Optimization Procedure. The ADADOP method

Stages of analysis and decomposition (A+D stages) The analysis (A) and the modelling (D) stages provide the sequence to study interoperability in the 9 considered perspectives. The ADADOP method

Qualitative assessment (A stages) The proposed qualitative assessment serves to describe buyer-supplier dyad’s interoperability conditions and to qualify them conceptually. The level representation is to represent the current interoperability conditions and the subsequent steps firms need to perform in order to increase higher interoperability. Example: Criterion Level of interoperability 1 2 3 4 5 Levels of goals definition (Business strategy) Not established Verbal contract Signed contract with conditions specified by governing company All the objectives and ground rules were previously agreed upon All the competencies were discussed in order to establish a win-win relationship The ADADOP method

Axiomatic Design framework Axiomatic design framework maps the business interoperability conditions from conceptual to physical and process levels. The ADADOP method

Modelling the implications of interoperability (D stages) Process modelling acts on the physical and process levels of AD, representing the dyad graphically and mathematically. Four steps to detail the processes: Identify the supply chain operations involved in design objectives. Identify the processes and assign responsibilities to actors. Detail the sequence and alignment of internal and interface processes. Link resources to each process. The ADADOP method

Optimisation procedure (OP stages) The procedure aims to find the interoperability solutions and/or adequate PVs that ensure higher performance. To achieve the optimally interoperable buyer-supplier dyad, the following steps are proposed to come from the determined BI conditions (“as-is”) to the optimal interoperability scenario (“to-be”): Build simulation model Select metrics Collect data Simulate and measure performance Establish new scenarios Test scenarios Select best scenario The ADADOP method

Optimisation procedure (OP stages) Interoperability performance measurement framework The ADADOP method

Case studies Case study 1 – Buyer-seller interaction. FS SS Copper wire (2nd tier) Injection coils (1st tier) FS SS Case study 1 – Buyer-seller interaction. Problem: incompatibility between communication systems to place and receive orders FR3.1.2: Manage the interface between the inventory management system and the ordering system. DP3.1.2: SAP and e-mail are not interoperable requiring manual conversion. PV3.1.2: One user checks MRP on SAP and prepares an e-mail to send purchase orders (POs). FR3.2.2: Manage the interface between the ICT for order reception and the order management system. DP3.2.2: E-mail and SAP are not interoperable. Order data must be inserted manually into SAP. PV3.2.2: A user checks e-mail and inserts order manually. FR3.3.1.2: Manage the interface between order management systems. DP3.3.1.2: Order data is not compatible between firms. PV3.3.1.2: Manual entry of order data. Case studies

Case studies Case study 1 – Buyer-seller interaction. Solutions: A. Improve “as-is”: New resource distribution/quantity New process sequence B. New solutions: WebEDI EDI OLT – order lead-time, Cv – conversion time, TIP – time of interoperation. Case studies

Case studies Case study 1 – Buyer-seller interaction. The gain: Reduction of lead-time, wasted time in conversion and time of interoperation Elimination of non-added value activities Elimination of redundant business processes “to-be” Case studies

Conclusions A managerial tool (the ADADOP method) was developed that allows to systematically analyse and re-design the dyad to accomplish higher performance and value-added to the final customer. The method allows: The systematic identification and characterization of interoperability issues. To capture the core attributes of the buyer-supplier dyad interaction. To study the impact of interoperability in the dyad’s performance. To test and select interoperable solutions. By implementing the ADADOP method through case studies, was possible to confirm its applicability in the determination of interoperability problems and systematic solving. Aids companies and managers in the decision-making process of business set-up or improving the current business relationship. Conclusions

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