Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

Course 4 – Business Process Analysis and Concepts for Planning & Control

Intended learning outcomes: Explain important techniques in business process engineering. Describe characteristic features relevant to planning & control in supply chains. Disclose fundamental concepts in logistics and operations management.


All management tasks and activities must support the objectives of an enter­prise. Chapter 1 of this book showed how, and to what extent, logistics, operations, and supply chain management as well as planning & control of daily processes can contribute to the fulfilling of entrepreneurial objectives.

Appropriate performance indicators are connected to individual entre­preneurial objectives (see Section 1.4). These measures allow a company to evaluate the degree to which objectives are reached and to analyze initial causes and effects. The present chapter presents a systematic procedure for the continuative analysis of business processes and the design of systems for planning & control in supply chains. Figure 4.0.0.1 diagrams an overview.

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Fig. 4.0.0.1        Procedure for analysis of business processes and design of systems for planning & control in supply chains.

With the initiation of the procedure, company management must set the objectives of the enterprise. The basis of any improvement to the success and efficiency of an enterprise is analysis of the current situation. The follo­wing will introduce some methods of analysis that are also (and particularly) relevant to logistics, spotlighting different aspects of the situation.

  • Logistics, operations, and supply chain management have as their object business processes within and across companies. The first sections below will focus on the basics of process management.
  • A next step is business process analyses. The processes, as well as further analyses, are usually worked out for each product family. Section 4.3 outlines possible methods of analysis of processes and procedures. For now, we will begin with less detailed representations, such as organization-oriented process charts.
  • Section 4.4 outlines characteristic features that are relevant to planning & control in supply chains. Different product families, and sometimes even different products, and upstream and down­stream from decoupling points, will have varying values for these features. The features are related to entrepreneurial objectives and thus must consider these objectives. Examination of the features allows us to discover inconsistencies with business processes as revealed by process analysis.
  • Section 4.5 presents fundamental concepts in their dependency on the characteristic features. Here, a company has to position itself within a selection of different production types, and concepts for planning & control.

The results of the various analyses are checked with regard to consistency, both among themselves and in relation to entrepreneurial objectives and desired results. If no general consistency is found, either the system or the company’s objectives must be changed.

  • Change of the system requires detailed process analyses, using, e.g., production-infrastructure layouts or process plans. Section 4.3 deals with such techniques. Then, in a design step, changes are introduced in the process or in design parameters (such as infrastructure, qualifica­tions of employees, product variety concept, or relation­ship to business part­ners). Chapters 6 through 8 discuss possibilities in this regard.
  • Changing the objectives can be necessary, if current options involve too many inconsistencies (see Section 1.3.1).
  • In either case, many steps of analysis may have to be repeated.

If the results are consistent, a design step can work out possible business processes and methods of planning & control. Chapters 5 through 8 discuss the principal methods and their dependency upon analysis results. Chapters 10 through 15 outline more detailed methods.

Once concrete methods of planning & control have been worked out, a company can attempt to estimate the expected values of performance indicators. These estimates will be checked against desired values. If the result is negative, then once again either the system or the objectives of the enterprise must be changed (see above). If the results are positive, the company may have a choice of various possibili­ties. For example, variants emerge as the result of a possible different view of the product family. In other cases, differing methods of planning & control may be implemented.

The approach proposed here is not dependent on any particular type of project organization. However, logistics systems function satisfactorily only when the people who use them (want to) understand them well. For this reason, it is advantageous for the people who use the system to be actively involved in the design process.



Course sections and their intended learning outcomes

  • 4.4 Characteristic Features Relevant to Planning & Control in Supply Chains

    Intended learning outcomes: Produce an overview on principle and validity of characteristics in planning & control. Explain six features in reference to customer, and item or product or product family, five features in reference to logistics and production resources, as well as seven features in reference to the production or procurement order. Describe important relationships between characteristic features and features of transcorporate logistics in supply chains.

  • 4.5 Branches, Production Types, and Concepts for Planning & Control

    Intended learning outcomes: Describe branches of industry in dependency upon two characteristic features, "volume versus variety". Explain in detail production types and concepts for planning & control. Disclose selecting an appropriate branch model, production type, and concept for planning & control.

  • 4.6 Summary

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  • 4.7 Keywords

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  • 4.8 Scenarios and Exercises

    Intended learning outcomes: Differentiate between various concepts for planning & control within the company. Using process charts for synchronization between use and manufacturing with inventory control processes. Elaborate a basic process analysis as well as manufacturing processes in the company-internal layout.

  • 4.9 References

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