A Web-based ERP system for business services and supply chain ...


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A Web-based ERP system for business services and supply chain ...

  1. 1. Available online at www.sciencedirect.com European Journal of Operational Research 187 (2008) 1310–1326 www.elsevier.com/locate/ejor A Web-based ERP system for business services and supply chain management: Application to real-world process scheduling a,* C.D. Tarantilis , C.T. Kiranoudis b, N.D. Theodorakopoulos b a Department of Management Science and Technology, Management Science Laboratory (MSL), Athens University of Economics and Business, 9th Floor, Room 913, 47A Evelpidon Street and 33 Lefkados Street, 11362 Athens, Greece b Department of Process Analysis and Systems Design, National Technical University, 15780 Athens, Greece Available online 20 November 2006 Abstract A Web-based ERP system developed for attacking business problems and managing real-world business processes rang- ing from simple office automation procedures to complicated supply chain planning is presented. The system’s Web-aspect provides significant advantages, as the system is distributed through interoperable, cross-platform and highly pluggable Web-service components. The system involves a powerful workflow engine that manages the entire process event flow within the enterprise increasing efficiency and control at the same time. Business processes, when needed, are controlled by the enterprise quality management system and consequently the ISO directives are accurately followed. A real-world process scheduling system developed for the specific needs of Greek Construction Manufacturing Enterprises is illustrated as a detailed paradigm of the system’s capabilities. The problem was formulated to assign project tasks in form of lots to enterprise resources in order that resources idle time and delays in project preparation time were minimized. The problem was solved by a simple and effective heuristic algorithm. Ó 2006 Elsevier B.V. All rights reserved. Keywords: ERP; Electronic services; Web-based supply chain management; Construction project management; Business process mana- gement 1. Introduction would rigorously deal with every single business aspect of each individual enterprise. These systems, During the last decade, there has been acknowl- typically called enterprise resource planning (ERP) edged a tremendous change in enterprise-oriented systems, are usually developed as individual stand- business software where traditional accounting alone monolithic applications or modular separable and commercial management products have gradu- tools assembled in a Suite structure for all individ- ally left their place to integrated solutions that ual business needs. Most systems in this category have a similar client-server or multi-tier architecture built around a central database server. Typically, in * Corresponding author. Tel.: +30 210 8203677; fax: +30 210 traditional multi-tier standalone ERP applications, 8816705. critical application components (such as the Appli- E-mail address: tarantil@aueb.gr (C.D. Tarantilis). cation server) are essential for any functionality, 0377-2217/$ - see front matter Ó 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.ejor.2006.09.015
  2. 2. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1311 transaction or access to the database. On the other solve Supply Chain Management (SCM) and Logis- hand, a new generation of Web-based enterprise tics problems. information systems is gradually gaining ground, The information system presented in this manu- where the system structure is entirely modular, plug- script possesses two basic parts. A workflow engine gable and separable and no component or module is that manages the entire business process task flow obligatory for the application’s operation. The sys- across the enterprise, incorporating quality manage- tem presented in this article belongs to the second ment rules and a resource management module, category, as it is developed on open-source Web- which utilizes a project scheduling management Development platforms and possesses modular sub-system. The scheduling problem is solved by a and flexible structure. suitable heuristic algorithm. Web-based techniques are less expensive, more In Section 2, a short list of combined supply efficient and lately have been the target of most chain and workflow management related work is development efforts. Additionally, web-access has provided. Section 3 discusses the ERP and Web-ser- been severely facilitated by recent advances in tele- vices integration issue. In Section 4, a detailed communications and network technology that favor description of the general solution framework is the creation of virtual private network (VPN) struc- presented. Section 5 provides the analysis of the tures which unite different enterprise spatial entities project scheduling algorithm. An illustrating exam- (stores, warehouses, offices etc.). VPNs are networks ple of one of the system’s implementations is constructed using external network infra-structure reported in Section 6. The conclusions of the text (usually the internet) to connect nodes. Web appli- are finally presented in Section 7. cations are cross-platform in terms of operation sys- tem and hardware requirements. Finally, web-based 2. Literature review solutions are able to easily interoperate with the whole supply chain entity, consisting what is usually 2.1. Combined business process and supply chain referred as Virtual Enterprise (the enterprise along management with its main associates, customers and suppliers) [1]. Although ample Workflow Management Soft- Besides, ERP systems cover a wide range of func- ware systems (WfMSs) exist as stand-alone software tionalities ranging from accounting to commercial applications or even as modules of several types of operations. In the proposed case, two major issues information systems, either on the commercial soft- brought about new insight into business software ware area or in the academic field, the occasions solution functionalities. The first one is the adoption where WfMSs are consolidated with SCM soft- of quality management concepts in enterprise pro- ware solutions in the same system or even in cesses. In order to successfully implement quality many integrated systems, are not proportionately management, organizations usually need to abide numerous. Nevertheless, there have been some by the standards of quality management systems cases in the literature where solutions have been (such as ISO). Compliance with total quality stan- developed combining WfMS and SCM features. dards is very important, since it guarantees that a For instance, Liu et al. [2] developed an inter-enter- specific company’s products and services are meet- prise (Virtual Enterprise) Workflow Supply Chain ing specific quality criteria. To adopt each particular Management information system, using a light- quality standard, several business processes, mostly weight workflow engine and covering ordering, of bureaucratic nature, have to be carried out in inventory and outsourcing operations of the virtual order to coincide with the standard procedures that enterprise. Marquardt and Nagl [3] proposed some the enterprise actually follows. As a result, if one concepts on a consolidated platform called CRC wants to control these processes digitally, one has IMPROVE, regarding integration of chemical pro- to incorporate them in the main information system cess management software systems with flowsheet of the company, which most of the times is an ERP and other application tools. However, the prob- application. The second issue is the need for the sys- lem of job time scheduling in a manufacturing tems to encompass more complex applications, environment and implementing workflow manage- which are vital to the enterprise efforts to exist in ment system solutions at the same time on the ample competitiveness between its market rivals. same information system, remains in general Critical modules in this direction are the ones that unexplored.
  3. 3. 1312 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 2.2. Latest developments in ERP systems enterprise systems in contrast to previous closed non-modular architectures. As a result, an enter- ERP systems and their journey along with SCM prise will not have to acquire the whole enterprise have been studied in the literature though not exten- software suite, but will be able to choose each mod- sively. Akkermans et al. [4] produced a research in ule even from different vendors and create a unique, 23 separate firms about the results and future expec- cost-efficient and tailor-made solution. This concept tations of ERP systems implementations in a SCM can be realized through Web-Service related meth- perspective. Among the conclusions of the research odologies such as SOA (service oriented architec- was that one major drawback of then contemporary ture) and Web-development techniques in general. ERP systems, was the lack of Web-based, modular, These directions and evolutions can be traced on separable ERP systems and lack of extended (or vir- the documentation of grand international enterprise tual) enterprise operation capabilities. In this con- software vendors like Oracle, SAP, PeopleSoft, text, one drawback subcategory of the non- www.salesforce.com or even in smaller outfits like modularity of ERP systems is the lack of modular Exact Software Inc or Hyperion. Some vendors management of the supply chain. Olhager and Sell- have developed distinct products in this philosophy din [5] presented a survey concerning the implemen- such as the Oracle Fusion Middleware of Oracle. tation of ERP systems in Swedish firms. Moreover, they compared the survey results with similar 3. ERP systems and Web services research conducted in the US. The authors inferred among others that many firms deploying ERPs con- Enterprise resource planning software systems sidered extending system scope mainly to integrate attempt to integrate all departments and functions their suppliers, customers or both to the system, to across a company onto a single information system provide additional e-commerce or e-business opera- that can serve all those different departments’ par- tions and to increase supply chain functionalities. ticular needs. Typically, a department with special- Ng and Ip [6] shaped an object oriented model ized functions and needs may have its own based on the traditional N-tier logic for designing information system, customized to its particular Web-based ERP applications. Kelle and Akbulut procedures and duties. Nonetheless, the main effort [7] pointed out the main disadvantages of typical of an ERP implementation is to combine as many ERP systems in terms of supply chain management functionalities as possible into a single, integrated and among these is the inability to support complete software program that runs on a single database, information flow across the extended enterprise. in order that the various departments can easily ERP systems were formed as integrated stand- share information and communicate with each alone software systems incorporating materials other. This approach can have a tremendous pay- requirements planning, accounting, order entry, dis- back if companies implement the software properly. tribution and shop floor control functionalities. Customer order is an illustrating example of a pro- After that, ERP systems (or extended ERP systems) cess benefiting from implementation of such sys- began accumulating other mainly supply chain tems. Normally, when a customer places an order, related functions, such as demand forecasting, it begins a mostly paper-based journey around the scheduling, warehousing, capacity requirements company, often being transferred into different soft- planning and logistics. In the last years, two very ware systems along the way. This process may incur important tendencies are monitored regarding delays and errors. Meanwhile, access to critical ERP systems, the one relates to the addition of even order information is not directly available to every- more functionalities, such as project management, one involved when needed. The combination of tra- content management, workflows, enterprise portals, ditional ERP functions enriched with Business customer relationship management, human Process Management and SCM functionalities sub- resource management and knowledge management stitutes specialized department operation software and the other is linked to the need to disintegrate systems, reducing costs, complexity and information large-scale ERP applications to autonomous, easily inconsistency. Most vendors’ ERP software is flexi- pluggable, reusable and loosely-coupled application ble enough to provide modular implementation components. Accordingly, ERP systems may com- capabilities. prise from parts independent from each other, ERP systems can accelerate business processes which will plug and operate like Lego bricks into execution times, such as that of ordering process
  4. 4. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1313 mentioned earlier. This is the main concept behind allow the enterprise to access needed information the system proposed and described in this paper. effectively. As this new technology gains ground, Information flow is realized through a powerful more vendors support Web Service solutions database driven workflow engine, described in detail blended with XML technologies. Subsequently, in the following section. Web Service broker hubs are introduced. A broker In the context of ERP, Web Services offer two hub offers a portal providing a user interface for crucial advantages: ease of integration and cost users so that they can locate, evaluate, subscribe reductions through the hosted application model. to, cancel, manage, or monitor Web Services. An Integration is a major source of expenditure for increasing number of business software vendors enterprises due to business software system com- are delivering Web Service broker hubs, such as plexity. Customers and outsourcing vendors may SAP and Oracle for users of mySAP and Oracle demand access to information provided to internal E-Business Suite respectively. Intuit and Peachtree ERP users—such as order status, inventory levels, offer them with QuickBooks and Peachtree Com- and invoice data—even without having an ERP cli- plete Accounting. Microsoft with Navision is a ven- ent software. This is where Web Services interfere, dor offering a Web Service broker hub for mid-tier enabling seamless data access to the authenticated ERP software users. users at the right time from everywhere without Fig. 1 shows a common three-tier development the need of specific software clients. With the avail- structure, which is the most widespread form of ability of Web Services, integration can be achieved N-Tier architectures. According to 3-tier logic, three with superior reliability, security, manageability, different layers (tiers) exist, which are independent testing and effectiveness. Web Services use object- parts of executable code, presentation, business oriented technology to mix data and programming logic and data layers. Presentation layer is responsi- elements in Web Service methods that can be ble for managing user-interface and sometimes secu- accessed by different applications. Web Services rity issues. Business logic layer controls all data enable proprietary applications to communicate transfer between the user-interface and the data tier, over the Web. Proprietary ERP applications and retrieving, modifying, storing, deleting and validat- Web Services can use integration or other tools— ing data. Data tier is a tier responsible for the data- such as SAP’s Netweaver, HP’s E-Speak toolsets; base or sometimes is the database itself. Usually, IBM’s Dynamic e-business (infrastructure and soft- data and business logic tiers comprise the applica- ware); and Sun ONE (Forte technology and iPla- tion server of a distributed information system. net’s ECXpert)—all of which facilitate data flow The structural differences between a typical N- and communication across diverse applications. tier ERP and the proposed Web-based ERP can Web-Services combined with ERP provide an inte- be understood by comparing Figs. 1 and 2. In con- grated, multi-component application software plat- trast to most standalone ERP systems, where all or form ideal for performing multiple business some of the integral application components, such functions. as the application server, are essential for their oper- The enterprise may still require a traditional ERP ation, in our web-based scaleable approach, each application for its internal operations. Web Services user logins into the system via a web-portal and Fig. 1. Architecture of traditional standalone N-Tier ERP software applications.
  5. 5. 1314 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 Fig. 2. Architecture of the proposed Web-based ERP with separable software modules. Fig. 3. IE user interface of the tool involving: process/tasks tree frame control, notification event tags notification, calendar frame for personnel programmed tasks with detailed description of calendar events. then information flow components (including the section), navigate the user through the independent embedded workflow engine described in the next system’s functionalities. Each web-service compo-
  6. 6. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1315 nent is autonomous and is easily pluggable even Companies need business process management across applications. systems in order to automate, enhance and optimize In Fig. 3, the main graphical user-interface of the workflows, but also need quality management sys- information flow management module of the appli- tems to improve quality in every business activity cation is presented. Three areas appear clearly in the and to control and standardize business processes. figure, on the left side, there is the business process Additionally, successful Quality Management Sys- initiation area where each user of the information tems implementation increases performance stan- system is able to initiate the business processes he/ dards and customer satisfaction. Moreover, she is entitled to. According to the system’s philos- quality certifications improve product and brand ophy even a simple data form (for example the main image and sometimes offer a significant competitive customer form) may represent a business process advantage to companies. During a Quality certifica- with only one phase. Thus, the accessibility of data tion procedure, an enterprise should document its as well as the initiation of business processes is con- business processes in order to certify them accord- trolled by this web-based component. In the other ing to a Quality Management System’s standards two areas of the user-interface on the right, the (ISO for example). Besides, during that process, a upper first presents the events that stem from busi- company has to record its organizational structure, ness process stage activities. These events emerge job-descriptions and organizational charts. There- and lead to other web data forms or non-initiating fore, such procedures give exposure to business pro- business process dialogs. The user-interface area cesses and present an excellent opportunity for the below is linked with resource and time management, enterprise to enhance or re-engineer them. Through containing from simple calendars to project/produc- the job-description phase, job positions are tion management Gantt charts. described in detail and roles of employees in the The system was developed using open source enterprise are defined. Roles are associated with Active Web Server Pages Technology (PHP and tasks. All this type of data is the main configuration JavaScript) and ANSI SQL. One of the system’s input of the proposed Web-based ERP. main requirements is the existence of an RDBMS The whole procedure of combined implementa- database application, preferably Oracle, MS SQL tion of the proposed Web-based ERP and the Qual- Server or MySQL. ity Management System is depicted thoroughly in Fig. 4. In this figure implementation phases are 4. Web-based business processes and system shown from top to the bottom of the figure, require- implementation ments (input), customization, deployment, resulting modules (output). The certification according to a In this section, the business process management quality standard is a corollary of putting into prac- aspect of the proposed Web-based ERP system is tice the system’s Quality Management module and presented. Within this context, many information consequently is also shown in the figure near the systems have been developed during the last years output modules. that interact with business processes of enterprises. On the other hand, Quality Systems that are not The labels of such systems vary from Workflow supported with a software solution are very rigid Management (WFM), Business Process Manage- and entail much paperwork. As a result, Quality ment (BPM), to Enterprise Document Management Systems become slow, difficult to control, in-flexi- (EDM) and Product Data Management (PDM) sys- ble, sometimes even chaotic and eventually ineffi- tems [8]. Numerous definitions of such systems are cient. Consequently, the need arises for provided in the literature [9]. In general, most such information systems, which help enterprises to build systems handle workflows as an abstract entity and operate a Quality Management System and at within the enterprise and do not interact with the the same time streamline workflows, encounter actual management of the involved resources. There real-life business problems and manage the actual is also a wide variety of Workflow engines, compo- resources of the enterprise. nents that provide the mechanisms to manage work- The workflow engine is the component of the flows dynamically. Although one of the system’s proposed Web-based ERP information system core activities is Business Process Management, its which handles the control-flow (or process) perspec- functionality goes beyond workflows, to other func- tive of the business process management module of tionality areas such as Operations or SCM. the system [10]. That means that the workflow
  7. 7. 1316 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 Fig. 4. Structural representation of the system’s implementation phases. engine manipulates the flow of tasks and business Programmers Interface (API) library are the events among the groups and users of the system, following: defining the sequence followed. The workflow engine has been developed using • Session class (bHierarchical, bByPass properties, Object Oriented Programming (OOP) techniques suggestChild( ), evolve( )methods) and is comprised of several objects that interact with • Process class a relational database and appropriate documents • Task class and files, producing sequences of tasks and events, • Event class navigating business workflows. PHP scripting lan- • DataClass class guage provides most required object-oriented capa- bilities similar to those of standalone software The Session class object contains user informa- languages. tion, which also contain group information. Usu- The main class components of the workflow ally, Tasks, which in Petri-net terminology are engine that formulate a corresponding Application described by places, are assigned to specific groups
  8. 8. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1317 [10,11]. Groups may represent actual operational The Event class object represents a link between departments of a company such as the sales depart- two consecutive Tasks and notifies the resources ment, or specific job-positions, or even virtual enti- (groups or users) involved in the execution of a ties in the company. Furthermore, Tasks cannot be pending Task. The Event class object provides also assigned to groups rather than to specific users/ information about forms, documents and data rela- resources of the system. Events, which in Petri-net ted to the task through the Document and DataClass terminology have a similar function with tokens, class objects. The DataClass class object, which is wait to be enacted in each user’s event queue. When used extensively by the system even outside the a user interacts with an Event and causes an action scope of the Workflow Engine, is the object that that will proceed the Process, suggestChild( ) operates as the main communication tool with the method gets called. This method’s role is to navigate relational database. A typical workflow mechanism the workflow, choosing the correct next Task or of process/task/event creation structure is presented Tasks and finding the appropriate users or groups. in Fig. 5. Group or user assignment to a Task can also be Roles and authorities to execute specific Tasks or dynamic. For instance, it can be decided by the to initiate Processes can derive automatically from input of the user of the previous task. Moreover, the organizational chart of the company or the when the bHierarchical property is true, suggest- job-descriptions of the system users. This input data Child( ) can seek the next users or groups hierarchi- is part of the Quality Management System and cally. For example, in a procurement process, every needs to be defined to comply with its requirements. department manager approves the procurement The proposed Web-ERP provides the ability to orders of the department members. Then when a manage any resource of the enterprise (employees, procurement order is placed by a user, the system machines, vehicles, materials) either on pro- through suggestChild( ) method seeks, following grammed or on actual schedule (timesheets). In the hierarchy through the organizational chart of other words, the system tracks not only what was the company, for a director who is entitled to offer planned, but also what really happens. Moreover, an approval for the procurement order. When the it provides us with a real-time costing ability for bByPass property is enabled, the system can by-pass every activity of the enterprise. a Task or a Process if there is no user available to Apart from the three main functionality areas, execute the Task. For example, a Task in a business the tool operation covers the following modules. Process can be by-passed when the resources (users) who have the privilege to perform that Task are on vacation. The workflow engine supports AND- Process Initialization splits & joins as well as OR-splits & joins, respec- tively [10]. Any Task can have unlimited number Task 1 User Action of results and be considered as initial. Then, evolve( ) method gets called to create the new Events, to send them to the appointed groups or users and Group(s)/User(s) Event 1 to destroy the previous old Events. In Petri-net Notification terminology, evolve( ) method is used to trigger tokens. An Event can be linked to specific data records in tables of the relational database or to Task 2 User Action specific documents in the system or both. The Session object can stop any process when it is demanded. Group(s)/User(s) Event 2 The Process class object is a reusable object com- Notification ponent which usually depicts a specific real-life busi- ness process. Business processes comprise of a Task 3 User Action sequence of Tasks, which are elementary explicit units of work performed by a user or a group of the system. They may include other sub-processes. Process End The business object acquires the business process Fig. 5. Workflow mechanism of process/task/event creation data from the relational database. structure.
  9. 9. 1318 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 • Office Automation and personnel and above all by the individual char- • Customer Relationship Management (CRM) acteristics of the manufacturing process. In most • Supply Chain Management (SCM) such enterprises, compliance with both criteria • Human Resources Management (HRM) depends on the experience of the operating person- • Equipment Management (EM) nel. The proposed system utilizes an efficient module • Quality Management (QM) for scheduling manufacturing processes, which schedules all manufacturing operations. In fact, it The presented tool has been implemented with is supplied with the production profiles of each task, great success on over 40 large, small and medium resources available regarding equipment and per- Greek enterprises solving core operational problems sonnel and customer orders. Subsequently, it on the following sectors: Construction, media, advises on the reliable course of action in each sec- retail, manufacturing, education, software, consult- tion with respect to the following rules: ing, financial services, transportation and insurance. • each order is scheduled so that it is completed in 5. Management of the manufacturing process the least possible time, that is to say order make- span is minimized; One the most powerful properties of the pro- • all tasks in the same order will commence at the posed Web-ERP tool is the ability to integrate same time, unless this is limited by resource avail- through its workflow and resource planning pro- ability in each production section; cesses, several supply chain problems. One of the • time priorities between orders are kept, unless the most significant examples is the manufacturing pro- current set-up situation allows an order to be cess management tool developed for several Greek completed before others of higher priorities with- manufacturing firms. The infrastructure of the pro- out affecting their schedule. duction process in most manufacturing construction companies (such as the ones forming metallic con- The most characteristic feature of the proposed structions and building hardware) usually entails scheduling system is the fact that ordering informa- the simultaneous operation of several major depart- tion is dispatched by the system to manufacturing mental sections that prepare final ordered products. sections at specific time intervals. As a result, sched- The main characteristic of products prepared by uling decisions instantly affect the scheduling proce- such firms is that although almost none has the dure which manages manufacturing resources [13– same structure, they are made using similar manu- 16]. facturing procedures. Orders dispatched by the cen- The complete manufacturing task description tral ordering system, usually suited to customer according customer’s desire and needs involves the desire, involve products not known beforehand preparation of each task in phases that block time whose preparation is likely to combine many opera- in each available resource in a specific way. For each tions. Moreover, according to the preparation sche- phase, there is a job t assigned to it that involves dule of each product, there are cases where several times ttS (start time) and ttF (finish time). In the con- sections of resources are involved. In addition to vention used in the algorithm of this manuscript, the above, the course of manufacturing action is time within jobs starts at job completion point not known before the order is placed [12]. and moves backwards. Thus, the reference zero In construction manufacturing systems such as point for measuring job preparation time is placed the one discussed here, there are two basic require- at the task completion time point. The reason for ments posed by the production department that this convention is obvious; job completion is the runs the operation. The first one involves the time only valid reference time measuring point regarding priority of each order. Typically, if a client poses job preparation. Obviously, start and finish times an order at a given time, it is assumed that this order for each job can result in various job patterns within is prepared with higher priority than others dis- each task. Jobs can be overlapping, they can involve patched later. This rule is actually followed in the the same resource type in parallel or sequentially, production process of the enterprise to achieve a etc. Each job can be accomplished by resources of smooth operation. The second one involves the min- one and only one specific resource type ri, which imization of order completion times, subject to lim- belongs to a set of resource types R = itations imposed partly by resources in equipment {r1, r2, . . . , rN}. For each resource type ri, there is a
  10. 10. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1319 number of similar resources nri , of identical charac- for each order i dispatched, order by teristics. As a result, each task phase can be exe- order_dispatch_time cuted in any resource that belongs to the resource begin type associated with it. Using this notation a task scheduleOrder(i); p, is a set of objects (jobs) where each one is charac- fitOrder(i); terized by a start and finish time and an associated end resource type, p ¼ fðtiS ; tiF ; ri Þ; i ¼ 1; . . . ; nP g. An scheduleOrder(i) order s, is a set of tasks s ¼ fðqpi ; pi Þ; i ¼ begin 1; . . . ; ns g. The algorithm developed, is used to set p as the set of tasks of order i; //copy schedule a set of orders S of different dispatch times from order tasks set on the available set of resources R, whereas the while p is not empty number of available resources for each resource delay=0; type nri varies with time, due to equipment malfunc- set s as the task of maximum finish time tions during operation or the presence of available that belongs to p; personnel operating the equipment. for all jobs t in s Supposing that an infinite number of resources set r the associate resource type of job t per resource type was available. The maximum fin- for all machines m in resource type r ish time of all tasks in each order would obviously if s does not fit in any machine m be the order make-span. In addition, all orders delay++; would be scheduled to achieve this makes-span. In end the real-world system, two sources of delay will s.delay = delay; appear. If an order involved a large number of remove s from p; tasks, their processing on limited resources would end definitely not allow their simultaneous completion. end In this case, the second rule mentioned above would fitOrder(i) be violated, and certain tasks would simply wait for begin others to be executed, due to the limitation of avail- set p as the set of tasks of order i; //copy from able resources. This is the first source of delay. In order tasks set this case, the second rule mentioned above would delay = 0; dictate that all delayed tasks would be executed as for all tasks s in order i ordered as searched in close to order dispatch time as possible. In this case, scheduleOrder(i); the order make-span is the maximum of finish times for all jobs t in s plus task delay over all tasks in the order. The sec- set r the associate resource type of job t ond source of delay is caused by the fact that when for all machines m in resource type r the order scheduling pattern is determined, fitting if s delayed by s.delay does not fit in the order to the available resources might reach a any machine m point where no available time in resources could delay++; be found due to the presence of other orders. In this end case, older orders have higher priorities and cannot end be displaced in time. Therefore, order completion end should be delayed until all tasks are assigned to available resources. The proposed system follows The algorithm suggests that each order put for- two basic principles; time priority of each order ward by the company dispatching system is itera- and make-span pattern of each order. The imple- tively treated through two discrete phases. The mentation of these principles and the evaluation of first one assumes that all resources are available total order delay in available equipment is carried for all order tasks and relevant jobs, inserting task out in the following two phases for the tasks of each jobs to resources without considering the presence order in the departmental operation schedule. Algo- of other orders placed before occupying resources. rithm formulation is presented in relevant pseudo- It greedily selects tasks of decreasing total finish code functions. The operation of department sche- time and puts them in the first available resource dule simply iterates these two phases for each order adjacent to order dispatch point in order that each dispatched by the enterprise ordering system. one is completed at exactly order completion time.
  11. 11. 1320 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 If this is impossible due to resources already with 3 resources for each type, the calendar takes blocked by tasks and jobs selected previously in the form of Fig. 6. Each horizontal row within a cal- the order, the task (and its jobs) is shifted (delayed) endar day represents a resource. Furthermore, each in time until non-occupied resources are found. The horizontal colored bar illustrates a specific job and delay between tasks in each order is recorded. The each different color shows a different order. Grey second phase keeps delays constant between tasks lines between chart horizontal rows denote the divi- of the same order as evaluated in the previous phase sion between resources of different resource types. and strives to fit each order task job in available The figure divides time in working days and work- resource machines. If even one job cannot find free ing hours. resource time placement, the entire order is shifted In Fig. 7, a problem with eight resource types and (delayed) until all tasks and jobs are assigned to three available resources for each type is shown. A available resources. Furthermore, the order delay zoomed frame of a specific day gives greater detail is recorded again. As a result, the two sources of of the assignment of tasks to production lines. The delay, delay between tasks of the same order and numbers on each bar present the job’s order, task delay between orders, are easily tracked and and job numbers. The user is able to see the detailed recorded. In all cases, the delay is measured from start and finish times for each job and also to form the exact time point where the order was placed in the actual, real-life production schedule. the system. The most common delay unit is an hour, Typically, the workflow process works as fol- but the algorithm can function with any other time lows; once in a working day production planners subdivision. approve scheduling plan suggested by the algorithm A typical example of the Gantt chart resource and after the end of each shift, the system is calendar is presented in Fig. 6. When applied to informed about the actual task completion and the an actual manufacturing process of 3 resource types actual task start and finish times. In this way, an Fig. 6. Typical Gantt Chart Calendar for three resource types and 8 hours shift.
  12. 12. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1321 Fig. 7. Actual Gantt chart from an 8-resource type manufacturing process involving a detailed task and job dialog. on-going process of planning and confirming is put or private infrastructure works (for example stadi- into practice in order to monitor planned and actual ums or large bridges) and at the same time has sev- tasks. Accordingly, reports on discrepancies eral industrial customers, such as metal, mining and between planned and actual process times can be cement industries, supermarkets, power-plants, generated. shipbuilding enterprises, oil refineries and others. Additionally, the enterprise operates inside and out- 6. Case study side of Greece. Furthermore, this company employs approximately 200 persons. Some of them work on 6.1. Background construction sites and others in the company’s man- ufacturing facilities. A case will be presented where Manufacturing Management integrates with Business Process Man- 6.2. System implementation agement through the information system’s utiliza- tion. The case study concerns one of the biggest In this example, this enterprise implemented the Greek construction companies which focuses on Web-based ERP system to streamline many of its the creation of metallurgical constructions. The critical processes including processes concerning enterprise had turnover over 30 million euros in company operations like procurement and project 2004 and played a key role in the development of management or processes concerning customers like the infrastructure that was used in the facilities of customer complaints. The business processes the Athens 2004 Summer Olympic Games. The involved in the project are presented in detail in enterprise is located in the area of Attika near Ath- Table 1. The system supported both the Greek ens capital of Greece and operates on great public and the English language, because many of the
  13. 13. 1322 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 Table 1 Typical business processes for the ERP presented Business Pre-ERP conditions ERP implementation results process Customer Customer complaints records were paper ISO forms. The whole process is automated through the system’s complaints Management had almost no control workflow engine. Management is notified instantly Procurement Procurement requests of various departments were Every involved employee is notified automatically, all transferred tediously via ISO forms across the enterprise to procurement orders are approved by directors and the acquire director and upper management approval. No upper management electronically. Real-time reports control, coordination and reporting abilities were available available for every procurement request in the enterprise. Process execution times reduced dramatically Production Production scheduling was manual and based on empirical Production scheduling is formed automatically by the planning and intuitive criteria. Production planning team estimated algorithm presented in Section 5. The system provided delivery times and schedules, which were inflexible and flexible schedules and lower delivery-times. The system sometimes not accurate enough offers ability of instant rescheduling with every new order. The input data stem directly from sales department Quality Quality control of final or middle products was kept on Quality control is kept in the system, various methods of control ISO forms on hard-copy. No statistical analysis available data statistical analysis and reporting available Sales Promotion activities (calls, meetings, faxes) were arbitrary Each promotion’s activity result is measured. Successful and there was no data available about their effectiveness. promotion actions are automatically connected with Offers and contracts were on hard-copy form only resulting offers and even contracts. Reports are available and decision making is enhanced. Contract, offer data is widely accessible and transparent employees were not Greek and used Oracle 8i as a relational database management system (RDBMS). One business process where workflow manage- ment co-operated with production planning was the customer offer process. The upper management of the enterprise was severely concerned about the operation of the sales department. Therefore, they expressed a will to quantify and monitor customer relationship data and promotion activities, includ- ing customer calls, meetings, offers, offer modifica- tions, after-sales communication and above all contracts. All these types of actions formed a single business process to our system, called the offer pro- cess. Moreover, the fact that each contract which involved one or more projects was fully customized and different from anything else produced by the company in the past, incurred the need to transfer contract and project related information directly to the operations department of the enterprise. Fur- Fig. 8. Business process diagram presenting the case study, where thermore, most customer orders were very sensitive workflow management is integrated with the production sched- in terms of delivery dates and as a result the enter- uling module of the system. prise faced a need to forecast reliable project deliv- ery times and to optimize production scheduling. Consequently, a customized offer process was enterprise is instantly notified by the system and developed on the system as illustrated in Fig. 8. related project information is added to the input One of the tasks of this process was the manufactur- of the scheduling algorithm. In this way, not only ing management procedure described in the previ- were new orders added to the new production ous section. When the offer process leads to a schedules, but also production management had contract, then the operations department of the the ability to prioritize orders automatically, to
  14. 14. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1323 interact with different production planning scenar- rejected by the customer, R1 is an OR-split event- ios and to project accurate assessments of each condition-action (ECA) point where the following order’s delivery times. cases arise: The enterprise has several production lines and each of them is entitled to perform different sets of • If an offer needs review, the offer is altered and job-types. Moreover, the organization faced a pro- resent to the customer. ject scheduling problem, where multiple fully cus- • If an offer is rejected, offer rejection state is tomizable projects needed co-ordination and cost- reached. reduction, both in the company’s manufacturing • If an offer is approved the process proceeds to the facilities and in the customer’s site. Additionally, contract stage. the firm encountered tight deadlines and sometimes rising costs due to the high use of overtime. Each The user of the system is able to execute the production line has a definite number of critical scheduling algorithm. Additionally, the user is able resources. Resources that define a production line’s to alter lot-sizes of each task at any time. After each capacity are called critical. On some production execution, the planning team puts the schedule into lines critical resources may be employees and on practice, then inspects the actual result of the pro- others machines. Thus, each production line repre- duction activities, feeds the actual data input into sents a resource type (ri) and each critical resource, the system and re-schedules the production plan machine or employee, which belongs to the previ- periodically or whenever seems useful. The planning ously mentioned production line forms a member team of the enterprise decided to follow this proce- of the set of similar resources ðnri Þ, as described in dure on daily basis. Section 4. Production phases (job-types) are divided Apart from the business process management to lots. A lot is the minimum inseparable amount of and manufacturing management modules of the work and when it begins processing it should end Web-based ERP, the company utilized other useful without interruptions and when it ends the created modules of the application, such resource manage- stock is transferred to the next phase. Lot-sizes for ment and quality management. The enterprise had each production line and task are defined by the already implemented a quality management system production planning team. In the algorithm descrip- (ISO) and had obtained certification of various tion of Section 5 jobs play the role of lots. The pro- quality standards including ISO. As a result, the duction planning team requested a small quality management system module of the Web- modification of the algorithm presented in Section base ERP was adjusted to the company’s already 5. They wanted to be able to prioritize orders operating quality system. regardless the time they entered the order queue in the system. For instance, if a large contractor was willing to pay a very high price, as long as its project 6.3. Project scheduling is finished in short deadlines, this order could have a greater priority than older ones with more flexible Production line available resources range from time schedules. Thus, priority grades were intro- one to five depending on project execution phase. duced into the system and the scheduling algorithm, The phases and the job type-related critical meaning that among orders of the same priority grade, the older one gets processes first, but an order Table 2 of a higher priority grade precedes all orders of Project execution phases (job-types) lower priority grades. Index Phase Critical resource type The proposed Web-based ERP contains each 1 Cutting Equipment piece of productive equipment and employees and 2 Welding (agglutination) Equipment/personnel their job-descriptions in the database for quality 3 Shaping 4 Puncture/perforation Personnel management purposes. Accordingly, tasks, jobs 5 Assembly Personnel and job-types are defined for each project (order) 6 Electric welding Personnel during the project definition phase as depicted in 7 Grinding Personnel the Fig. 8. In this figure, S represents process initia- 8 Painting Personnel tion point, E1 occurs when promotion efforts do not 9 Fitting Personnel 10 Shear nailing Equipment result to a new offer, E2 happens when an offer is
  15. 15. 1324 C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 Table 3 Problem description, estimated work hours per project per phase Phase Resources 1 2 3 4 5 6 7 8 1 Cutting 3 80 240 40 120 240 80 120 140 2 Welding 3 120 120 40 120 60 240 80 60 3 Shaping 2 40 160 40 120 40 400 40 40 4 Perforation 2 60 200 24 120 24 400 54 40 5 Assembly 3 40 40 48 120 8 400 60 40 6 Electric welding 5 160 120 16 120 240 400 240 260 7 Grinding 3 240 120 24 120 120 400 140 260 8 Painting 2 48 40 24 120 80 240 120 24 9 Fitting 3 40 24 24 120 14 160 40 24 10 Shear nailing 2 24 16 24 120 20 200 40 24 resources are presented in Table 2. At most phases Table 4 there are up to three work shifts per day. Addition- Problem of Table 3 system project planning results in work hours ally, minimum and maximum overtime can be cho- Project 1 2 3 4 5 6 7 8 sen in problem formulation. A particular instance of Execution 240 240 120 208 320 600 384 504 the problem and its subsequent solution will be time studied. The problem is composed of eight concurrent projects, each of them containing all 10 project exe- With this kind of input the scheduling algorithm can cution phases. Detailed problem data is presented in produce results is less than a second in a typical cli- Table 3. A common lot-size is chosen for all phases ent PC. In general, in several real-life examples, of 8 hours and all phases in all projects are consid- total project execution times were reduced from ered successive. That means that a project execution 0% to 40% and detailed work hour cost reports were phase can initiate only after a processed lot has been available. A comparison was made between the received by the previous one. Each project has results of 22 past project schedules and the ones that unique deadlines and for each phase a different would have been produced by the system bearing in number of critical resources is available. Production mind problem scope (total number of projects). The lines work in three 8-hour shifts and no overtime is results are presented in Table 5, showing the average into consideration. project completion time improvement for each Before the advent of the system, due to the large category. complexity of the problem, no precise estimates were achievable. Nonetheless, there was an elemen- 6.4. ERP implementation benefits tary project planning process, according to which work hour estimations were added per project exe- Through the use of the system the enterprise cution phase. The sum was divided to the number obtained the following results: of available critical resources for the specific phase. The phase with the maximum ratio was defined as • Enhanced company operation through streamlin- the production bottleneck and this phase defined ing, improving and controlling business processes the resulting plan. In the case of the problem of major importance such as procurement, cus- described in Table 3, bottleneck phase is the grind- ing operation. Exact project execution phase initia- tion times could not be calculated, but a safety time Table 5 space was considered between production phases Relationship between completion time improvement and problem from 1 to 5 business work days. In our case the scope old planning method produced a schedule of a total Total number of 1– 11– 21– 31– 41– >50 duration of 800 work hours. On the contrary, the projects 10 20 30 40 50 proposed system produced a detailed planning solu- Schedules in this 3 8 5 3 1 2 tion described in Table 4 in 600 work hours. For a category typical plan number of projects in process ranges Completion time 9.2 10.4 22.3 12.3 8.5 29.5 improvement (%) from 4 to 55 with up to 10 project execution phases.
  16. 16. C.D. Tarantilis et al. / European Journal of Operational Research 187 (2008) 1310–1326 1325 tomer offers, customer complaints, equipment cess management and production scheduling. maintenance, marketing campaigns and others. Moreover, information system capabilities are • Significant cost-reductions and time-savings in all presented through an illustrating case study on the above mentioned business processes. one of the system’s implementations, revealing a • Ability to manage service related personnel and hands-on view to the system implementation related costs through the use of the resource benefits. management module of the system. In the past, This work may present an opportunity to inte- the company could allocate only the productive grate genuine and innovative business problem solu- resources’ (workers and construction site related tions within the context of the latest trend in ERP costs) cost to each company activity. Now by systems as well as in enterprise software in general, taking advantage of the resource management which is the utilization of Web-based techniques. (timesheets) module of the system, the enterprise For instance, an extension of this work may be is able to manage the cost of the service personnel the employment of intelligent vehicle routing prob- (engineering, R&D departments, etc.) involved. lem (VRP) solution methodologies to an integrated • Upgraded use of the company’s already operat- Web-based ERP system specialized for the needs of ing quality management system, which was not transportation management. supported by an information system. The use of the proposed ERP system enabled the enterprise References to avoid much paperwork, to reduce personnel’s occupation times with quality management issues [1] G. Dimitrios, S. Hans, C. Andrzej, Managing process and and to provide report insight to the management. service fusion in virtual enterprises, Information Systems 24 • Flexible and efficient production planning by (6) (1999) 429–456. implementing the manufacturing management [2] J. Liu, S. Zhang, J. Hu, A case study of an inter-enterprise (scheduling) module of the system. Project deliv- workflow-supported supply chain management system, Information & Management 42 (2005) 441–454. ery times and idle times were reduced signifi- [3] W. Marquardt, M. Nagl, Workflow and information cen- cantly, productivity was raised, more precise tred support of design processes—the IMPROVE perspec- delivery time assessment incurred stock level tive, Computers and Chemical Engineering 29 (1) (2004) minimization and customer satisfaction 65–82. improved. [4] H.A. Akkermans, P. Bogerd, E. Yucesan, L.N. van Was- senhove, The impact of ERP on supply chain management: • Facilitated communication and data, transfer of Exploratory findings from a European Delphi study, Euro- critical information for the whole enterprise. pean Journal of Operational Research 146 (2) (2003) 284– Now employees have instant access to real-time 301. data, documents and reports that concern their [5] J. Olhager, E. Selldin, Enterprise resource planning survey of duties. View of information flow is fully custom- Swedish manufacturing firms, European Journal of Opera- tional Research 146 (2) (2003) 365–373. ized according to each user position. [6] Johny K.C. Ng, W.H. Ip, Web-ERP: The new generation of • Finally, the company exploited the abilities enterprise resources planning, Journal of Materials Process- to control sales and promotion activities ing Technology 138 (2003) 590–593. through the system, received quantitative data [7] P. Kelle, A. Akbulut, The role of ERP tools in supply chain about the results of each promotion technique information sharing, cooperation, and cost optimization, International Journal of Production Economics 94 (2005) and managed to increase sales department 41–52. efficiency. [8] I. Choi, C. Park, C. Lee, Task Net: Transactional workflow model based on colored Petri Net, European Journal of Operational Research 136 (2002) 383–402. [9] M. Weske, W.M.P. van der Aalst, H.M.W. Verbeek, 7. Conclusions Advances in business process management, Data and Knowledge Engineering 50 (2004) 1–8. In this paper, a novel Web-based ERP system [10] W. van der Aalst, K. van Hee, Workflow Management, developed for attacking business problems and Models, Methods, and Systems, The MIT Press, 2002. managing real-world supply chain problems was [11] E. Gudes, A. Tubman, AutoWF – a secure Web workflow system using autonomous objects, Data & Knowledge presented. It involved a powerful workflow business Engineering 43 (2002) 1–27. process mechanism and a complete enterprise [12] S. Bischof, E.W. Mayr, On-line scheduling of parallel jobs resource management engine. The system imple- with runtime restrictions, Theoretical Computer Science 268 mentation includes a bridge between business pro- (2001) 67–90.
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