Assistant Professor

Industrial and Manufacturing Engineering

Wichita State University

Wichita, KS 67260-0035

(316) 978-3425

whitman@bigfoot.com

Professor and Chair, Assistant Professors

The University of Texas at Arlington

Industrial & Manufacturing Systems Engineering Department

P.O. Box 19017

Arlington, TX 76019

(817) 272-3092

{dliles,bhuff,jrogers}@imse.uta.edu

This paper presents a manufacturing reference model for enterprise engineering. Enterprise Engineering is defined as that body of knowledge, principles, and practices having to do with the analysis, design, implementation and operation of an enterprise. A common understanding of the enterprise is critical for any improvement effort. Modeling is an approach to providing a common understanding of the enterprise and how to achieve its desired future condition. A reference model is a model which provides a basis for developing a more detailed model for a specific instance of an enterprise. This paper provides an overview of models, a description of their use, a survey of other enterprise reference models, and a description of the manufacturing enterprise reference model.

Key Words: Enterprise Reference Model, Manufacturing, Enterprise Engineering

In today's competitive environment, the ability to transition to an improved enterprise, is a critical discriminator between players in a given market. Superior performance of the extended enterprise is central to achieving manufacturing excellence in the 21st century. The first step in any improvement effort is to achieve a complete, common, and correct understanding of the enterprise. Enterprise models are used to achieve this understanding. This paper presents the background for enterprise models, their use, and proposes a manufacturing enterprise reference model.

A common understanding of the enterprise is critical for any improvement effort. Modeling is an approach to providing a common understanding of the enterprise and how to achieve its desired future condition. Models are useful to: provide a focus for discussion, provide a means for communicating the enterprise, provide a basis for the analysis and design of a new process, act as a baseline for continuing process improvement, and facilitate the control of the real world process . According to Frasier, enterprise modeling enables the common understanding of all the pertinent aspects, the clear description of business problems and requirements, the identification of various design alternatives and a mechanism for the analysis of these options for design implementation at strategic, tactical, and operational levels . Petrie describes the importance of enterprise modeling as providing a common understanding of the enterprise and its interactions which can then be used to rationalize and improve these interactions.

Enterprise modeling has been utilized to construct models of organizations for purposes of predicting and estimating the impact of change within an organization brought about by changes in the external environment. The power of a model comes from its ability to simplify the real world system it represents and to predict certain facts about that system by virtue of corresponding facts within that model (Wood 1994). This section presents a summary of the common uses of enterprise models (EM) found in the literature. EM’s are used for :

• Facilitating human understanding and communication. This is accomplished by identifying: what things mean, what is done, how things are done, who does these things, what things should be measured, and the associated costs with these things. This is commonly referred to as semantic unification pg 8.
• Supporting process management and improvement. This is accomplished by providing a mechanism for the understanding and analysis of the process.
• Providing process guidance. This is accomplished by providing a mechanism to assist humans in the actual execution of processes.
• Facilitating benchmarking. Benchmarking requires a common understanding and documentation of processes .
• Automating execution. This is accomplished by providing a mechanism for the execution of processes.
• Enabling Enterprise Engineering. These models are actually a means to enable communication in an enterprise engineering context . Without models, it is difficult to perform any kind of engineering.
• Facilitating the control of the real world process .

• Analysis for design implementation at strategic, tactical, and operational levels .
• Decision support by providing access to required information, simulation of alternatives, and real time implementation of decisions.
• A competitive edge - The company that has an enterprise model will be able to react faster than its competition and gain a competitive advantage by studying the behavior of the organization based on changes in the environment .

Johnson, et al. suggests that the transformation of the enterprise can be represented as a series of snapshots describing the state of enterprise processes during various stages of improvement. These snapshots or templates describe process operations, resources, relationships, capability, etc. and includes relevant process benchmarks and process metrics. The enterprise design or transformation methodology is represented on figure 1 by the transition path arrow. An overall vision and three sets of strategies support the transformation. Enterprise models facilitate the transition process by providing a consistent and common view of the enterprise. Consider, for example, the "snapshots" shown in the figure as a different enterprise model reflecting the enterprise at that point in the transition. Thus, a key use of enterprise models is the facilitation of transition.

Presley, et al. propose that business processes may be placed into three categories: First are those processes which transform external constraints into internal constraints (set direction), next are those processes which acquire and make ready required resources (acquire resources), and third are those processes which use resources to produce enterprise results (transform). By providing categories to organize processes, more holistic enterprise designs may be achieved. Figure 2 shows activities (boxes) arranged into business processes (ellipses). The business processes are organized into an enterprise represented by the larger box. At this high level of abstraction, the enterprise itself is represented as an activity that takes inputs and transforms them into outputs using available resources under the bounds of a set of constraints. Although the boundaries are shown in the figure as solid lines, the open nature of the enterprise could be represented by dotted lines. However, it is important when modeling to define these boundaries and identify those details beyond control.

Frequently, the only activities or processes considered in modeling and improvement activities are those listed as category 3, which transform inputs into products and services. However, it is as important to consider the strategic and acquisition activities in an enterprise. Understanding the different process categories is vital in developing useful representations. By making modelers (and reviewers) aware of these three categories, the frequently overlooked categories of setting enterprise direction and acquiring and preparing resources are more likely to be considered.

Liles, et. al. defines an enterprise as "a complex set of business processes that can be designed to accomplish a specific set of objectives." Vernadat , pg. 19 defines the enterprise as "made of a large collection of concurrent business processes executed by a set of functional entities (or resources) that contribute to business processes." In the context of enterprise modeling, the term enterprise is used to designate specifically that part of the company which is of interest. This scope is determined by the end user of the model.

"Enterprise Engineering is defined as that body of knowledge, principles, and practices having to do with the analysis, design, implementation and operation of an enterprise." The principles and practices of the Enterprise Engineer are; Theory, Abstraction, Design and Implementation. Another term for abstraction is modeling. Modeling provides a mechanism for enabling a common understanding and the possibility for testing hypotheses. Enterprise Engineering views the enterprise as a complex system of processes that can be engineered to accomplish specific organizational objectives .

The Enterprise Engineer must recognize the ever-changing organic nature of the enterprise . Enterprise Engineering takes a holistic approach to the enterprise that is opposed to the more common myopic view of designing components of the enterprise with only a post-implementation consideration of integration issues. This post-implementation approach tends toward sub-optimal solutions.

Petrie (Petrie 1992) describes the importance of enterprise modeling as providing a common understanding of the enterprise and its interactions which can then be used to rationalize and improve these interactions. Petrie states that "Enterprise Integration (EI) is distinguished by concentrating on improving the coordination among interacting organizations, individuals, and systems" (Petrie 1992, pg. 1). EI initially focused on the integration within an enterprise, whereas integration between enterprises is now also addressed. Most EI efforts are partially accomplished by modeling the enterprise to aid in identifying the components for integration.

Business process re-engineering (BPR) is characterized by Hammer and Champy as "a set of procedures for effecting radical change." , pg. 5. Continuous improvement (CI) is seeking to build upon the existing business processes but to do it better, faster, and cheaper. CI is also frequently referred to by the Japanese term kaizen. CI is contrasted with BPR in that it is incremental in nature. Ideally, one radically changes the business with a BPR approach and then after the enterprise is re-engineered, incremental (continuous) improvement is pursued. A model of the enterprise is a vital component of any BPR or CI effort.

Three types of models are considered: partial, reference, and particular. A partial model leaves out key details that are populated at lower levels specific to the aspect being modeled. A reference model is a partial model that provides a basis for developing a more detailed or particular model which represents a specific instance of an enterprise .

Enterprise reference models provide many benefits to the enterprise engineer. Enterprise models are commonly used to provide a reference for differing enterprises within the same sector. Similarly, significant reduction in the time to create an enterprise model can be achieved with a reference model as a starting point. With many enterprises using the same reference model to start models, the quality, consistency, and interchangeability of enterprise models is enhanced. This facilitates both communications between enterprises and interconnectivity of resultant enterprise models. Individual enterprise plans, programs, projects, as well as extended enterprise configurations can be evaluated based on the enterprise reference model. The enterprise reference model will also serve as a basis for comparing the overall scope (both breadth and depth) of individual models and a suite of enterprise models to expand the pervasiveness of models in the enterprise.

The enterprise reference model provides a clear and concise graphical view of the operation of current manufacturing enterprises. A casual observer can learn about the operation of the enterprise including both the activities involved and the practices included in an enterprise with the resultant model. By providing an enterprise reference model that has gathered input from many other models, the resulting model may be applied to a variety of sizes and sectors of manufacturing.

There are several reference models of manufacturing enterprises currently available. This section reviews these models and describes the need for the manufacturing enterprise reference model described in this paper. The Automation & Robotics Research Institute (ARRI) at The University of Texas at Arlington has developed several models of the manufacturing enterprise. In the early 1990's, two models were developed. The "Operate a Small Manufacturing Enterprise" model was initially developed by reviewing the literature. Twelve different models from the 1980's were reviewed, including models from Wizdom Systems, IBM, The Computer-Aided Systems Association of the Society of Manufacturing Engineers, CAM-I, Espirit, and from several textbooks. The resultant model was then revised with in-depth interviews and reviews of the model with several manufacturing companies in the Dallas/Fort Worth metroplex.

This model was developed in the IDEF0 (Integration DEFinition) method. IDEF was developed by the U.S. Air Force’s Integrated Computer-Aided Manufacturing (ICAM) project in the late 1980’s. There are many different IDEF methods. Each method is useful for describing a particular perspective of an enterprise. The two IDEF methods used by ARRI for reference and particular models are functional or activity modeling (IDEF0) and process description capture (IDEF3). We will show only IDEF0 models in the figures for this paper. Therefore, a more detailed description of the components of IDEF0 follow. Five elements in the IDEF0 functional model are shown in Figure 3. The activity (or function) is represented by the boxes; inputs are represented by the arrows flowing into the lefthand side of an activity box; outputs are represented by arrows flowing out the righthand side of an activity box; the arrows flowing into the top portion of the box represent constraints or controls on the activities; and the final element represented by arrows flowing into the bottom of the activity box are the mechanisms that carry out the activity , .

The second model developed in this time frame was the Consensus Process Model. This model was developed in detailed interviews with three small manufacturing companies. It was developed in IDEF3, the process description capture method (IDEF3 was not yet formalized at this time and it is not completely syntactically correct with the released version of IDEF3). IDEF3 was used because this model took a process, rather than activity, view of the enterprise taking into account the temporal sequence of events. The small, integrated manufacturing model detailed the "ideal" manufacturing enterprise. The consensus process model described the current manufacturing enterprise.

In the mid 1990's, a reference model for a large aerospace company was developed. ARRI interviewed and developed the model with key experts from the company. Other models have also been developed with company participation on various lower level processes, but these three models provide a basis for the basic activities performed in a typical manufacturing enterprise. This led to the need to update these models into a reference model for the manufacturing enterprise. This updated model is described later in the paper.

There are three enterprise reference models commonly available. The Operate a Small Integrated Manufacturing Enterprise Reference (SIME) Model developed in 1990 by ARRI , The National Center for Manufacturing Sciences (NCMS) Strawman Enterprise Reference Model developed in 1993 by Wizdom Systems , the Systems Integration of Manufacturing Applications (SIMA) reference architecture developed by the National Institute of Standards and Technology in 1996 . There are also several other enterprise reference models, but most of these are proprietary in nature or not intended for general use such as for the semiconductor industry, etc. The three existing manufacturing reference models address only partial aspects of the three process categories mentioned earlier.

The Operate a Small Integrated Manufacturing Enterprise (SIME) Reference Model has been used and tested with many small manufacturers. Many of the terms used were specific to small businesses. This model was made more generic to apply to a wide scope of enterprises to include the extended enterprise. The knowledge gained in the enterprise model development for the large aerospace company was integrated in the model proposed in this paper. Additional details were provided regarding the "Direct Enterprise" activity. Some of the terminology was changed for ease of understanding.

The NCMS model provides many details relevant to government-based enterprises or those that have government entities as their main customer. This led to specific activities listed which primarily occur in the government environment. However, many of these activities are only found at the lower levels of the model. The NCMS model differs from the proposed enterprise combined reference model by placing the "Provide Resources" activity in the "Manage Enterprise" high level activity. The proposed model shows this activity at the A0 level. The acquisition and preparation of resources is an integral task for all other activities in the manufacturing enterprise. Referring to the previous discussion of categories of processes, the processes which acquire and make ready required resources are viewed as a separate category as they enable the other activities in the enterprise.

The (SIMA) activity model did not attempt to model the overall direction, the asset management, or the acquisition of customers/orders of the enterprise. There is good information in the details of the manufacturing planning process and the manufacture of the part. This information was at a lower level of detail than the scope of this paper.

Therefore, combining the knowledge gained from the previous four models (the three models listed above and the proprietary aerospace model), an enterprise combined reference model was developed.

ARRI has a revised reference model for operating a manufacturing enterprise. Figure 4 shows the A-0 diagram, which is the top-level diagram that defines the purpose and viewpoint and displays the boundaries of the model. The purpose of this model is to provide a common reference point for understanding and communicating the manufacturing enterprise. The viewpoint is that of the enterprise engineer. The enterprise engineer designs the enterprise and must understand the entire enterprise well or a sub-optimal design will be developed. The enterprise engineer also has a view to the details of many various activities and processes and will therefore require the understanding of the entire enterprise. The boundaries define the environment and aid the reader in determining the relevant aspects of the real world that are included in this model.

Enterprise personnel operate the enterprise. They do so by using customer & supplier communications, revenue, customer & industry information, and acquired items. Enterprise personnel operate the enterprise through a process governed by the environment and resources, provides enterprise performance information, stockholder/shareholder returns, more customer & supplier communications and a product.

The operation of the enterprise is accomplished by creating the desired culture, integrating and improving processes, and implementing pertinent technologies in an "optimal" manner according to an implemented strategic plan. Optimal is suggested to mean by Taha the "optimal solution of a model is the best only relative to that model." So, what is meant by "optimal solution" in this context, is the best solution given the parameters entered. The enterprise engineer does not spend endless hours trying to achieve the "theoretical optimum, but rather designs for a "business optimum" to enable the entire enterprise to perform at the desired level.

The high level diagram shown in figure 4 is decomposed into the next level of detail. The next figure, figure 5, shows the six basic activities of a manufacturing enterprise. The six basic activities are Direct Enterprise, Acquire and Develop Assets, Acquire Customers and Orders, Design Product and Processes, Fill Orders and Support Product.

[A1] Direct Enterprise - It is within this function that long-term, high level strategies are derived. Enterprise plans are an overall enterprise directive for the development of tactical level plans, policies, and procedures. Enterprise plans specify the role of the organization with respect to the environment and define the enterprise culture. They also explain the nature of the corporation's competitive strategy (Differentiation versus Cost Leadership or Focus) and indicate markets to be served. They include plans which indicate management's commitment to current manufacturing methodologies such as TQM, JIT, WCM, etc., and also plans which serve as a guide for the acquisition and deployment of resources.

Strategic planning is concerned with defining in broad outline an enterprise's long-term goals, translating those goals into measurable objectives, and determining the strategy by which those objectives can be met. Planning is hierarchical in nature. Some level of planning is an inherent part of all processes in this model. The high level plans and objectives developed from the Direct Enterprise process drive the planning activities performed in all other processes. The strategic goals and objectives of the enterprise are developed from corporate goals. External environmental factors and organizational factors are assessed and a competitive analysis is performed in order to develop the plans which will set forth the direction of the enterprise. The Direct Enterprise activity is responsible for documenting and deploying these plans to other activities. These activities are monitored and measured to ensure satisfactory progress. Corrective actions are taken as necessary. Included in this process are the development and implementation of the enterprise level processes described in this model.

External and internal factors constrain the process. External factors include the environment in which the enterprise operates, resource availability, and corporate interests. The environment is composed of factors such as political, market, and regulatory environments, and customer requirements and expectations. Internal factors, reflected as feedback from other processes, also constrain this process. These factors include information about assets, market and customer information gathered as part of the customer acquisition process, design status and capabilities, and operational status.

[A2] Acquire & Develop Assets - Enterprise personnel acquire and develop new assets using the existing enterprise asset base. They do so by using customer & supplier communications, revenue, assets & capital, and examining the requests for and status of existing assets. The transformation to usable assets is governed by the enterprise plans & performance information, which provides asset information, stockholder/shareholder returns, more customer & supplier communications and prepared assets..

This function is concerned with the management of assets including capital, personnel, information, and facilities. This is a tactical level activity where the strategic level objectives regarding resources are translated into tactical plans which define expected contributions of each operational area toward achieving the strategic plan. Procedures dictate how the objectives are to be accomplished at the operational level. Activities include the production of financial documents and personnel forms which relate information to outside agencies, as well as the development of departmental budgets which are for internal use. Issues relating to personnel, facilities, and security are also addressed. An aggregate plan is developed to maintain the demand/supply balance in as realistic and cost-effective way as possible. This function requires input from marketing (acquire customers & orders) regarding actual orders, forecasted orders, and market conditions. It also requires information from manufacturing (fill orders) regarding capacity status, inventory status, and rates of production and shipping.

Capital, facilities, and personnel are assets which require proactive management. Strategic level objectives regarding the acquisition and allocation of these assets must be translated into tactical plans which represent how the strategic objectives are to be accomplished. These plans will be used to develop policies and procedures to address specific activities. These policies and procedures will dictate how employees conduct activities within the sphere of the enterprise. It should be noted that information is considered a resource which must be managed and controlled. The information system employed by the enterprise should inherently perform these functions, but the system itself requires management by personnel who understand the concept of enterprise-wide integration and, if necessary, are capable of employing advanced communication technologies appropriately.

Assets necessary for the operation and health of the enterprise are acquired, developed, managed, and disposed of by this process. Categories of assets include facilities, equipment, production tools, personnel, intellectual property, and financial assets. (Work in process inventory is managed by the "Fill Orders" process). Supplier/partner capabilities are also managed. Strategic and operational objectives from the A1:"Direct Enterprise" activity act as triggers and controls to this process. Information about asset availability and capability are fed back to A1 to assist in planning. Requests for assets, typically generated by other processes in need of resources, are converted into the necessary "productive" assets by this process. This output is then used as a mechanism by other processes. Other inputs include capital and revenue from product sales. These are used to acquire necessary resources or converted to stockholder returns.

[A3] Acquire Customers & Orders - Acquire customers & orders provides the enterprise with a dynamic external link to its customers and the environment. Through analysis, this function is responsible for deciphering the current competitive state of the market as well as determining customer needs with respect to quality, reliability, maintainability, aesthetics, and "need by" dates. Information gathered during analysis serves as a basis for developing forecasts, strategic plans, tactical plans, and the development of advertising. Feedback is consolidated regarding customer satisfaction and requests for product services after the sale.

In order for an enterprise to remain competitive, current demand must be interpreted and translated to design and manufacturing on a real-time basis. Future demand must be accurately forecasted and the competitive state of the market must be evaluated. All this information plays a part in the strategic planning process as well as the actual process of getting products to the market in a competitive manner.

This process is responsible for identifying and developing market opportunities, developing proposals and bids, acquiring orders, and establishing and maintaining relationships with customers. This process interacts heavily with other processes. Guidance for when and where to pursue business is gained from plans and policies acting as controls from the A1:"Direct Enterprise" process. The process provides an output of customer needs and expectations and information about opportunities which is used for preparation of plans in the "Direct Enterprise" process. Information regarding design and operation status also control the process. Proposals/offerings are output to potential customers. Orders generated as a result of this activity are input to this process as are contracts and build packages from customers.

[A4] Design Product & Processes - Products are designed after specific product requirements are defined. The requirements definition process utilizes various trade-off studies to determine an optimum set of product requirements. The processes necessary to manufacture and support the product must be addressed during design to ensure that a quality, producible, and reliable product can be manufactured to meet the needs of the customer as well as the manufacturing and product support operations. Even with these precautions, there will always be design problems discovered after production begins. The Fill Orders function forwards design change requests to design to seek correction while Acquire Customers and Orders and Support Product relay customer satisfaction over the products life. Quality and reliability cannot be inspected into a product, therefore adequate testing and evaluation of both product and process must be done throughout the design effort to ensure production optimization and customer satisfaction.

The design function is responsible for the development of products and the processes by which they will be produced. It is imperative that the process be developed and tested concurrently with the product to ensure smooth transition to production. This design process is an iterative process as the design is refined and tested with respect to manufacturing capabilities. There is also an iterative interaction with the acquisition of customers and orders with regard to determining how to best satisfy the customer.

An integrated product/process development approach is employed in the development of products and the manufacturing processes used for their production. Products and processes are developed concurrently employing a team approach. Representatives from all functions, customers, partners and suppliers are part of this design team. This will help ensure a repeatable process that consistently and efficiently produces products that meet or exceed customer expectations. The primary input into this process are product and process needs. Outputs include the build package and feedback to other processes, primarily Direct Enterprise and Acquire Customers/Orders. Requests for assets are sent to the asset management process.

[A5] Fill Orders - The fill orders process includes all tasks required to produce and deliver products. The process acquires raw materials and purchased components, plans and schedules production tasks required to produce products and tools, tracks work in process, completes detail part and tool fabrication, subassembly and assembly work, and delivers the finished product to customers. Material is input into the process and output as product. Feedback is sent to other processes regarding status, capacity, and capability. Constraining this process are build package, plans, policies, and procedures.

Before production can be executed, adequate planning and control mechanisms must be established. This means ensuring that adequate assets (material, information, equipment, and labor) are available to meet production requirements, and providing a release mechanism which controls the loading of the shop floor. As products are produced, facilities must be maintained and inventories must be managed. Raw materials, components, subassemblies, supplies, information, or services might be procured to aid the production effort. The final product, which includes the actual product, documentation, and support services that might be required, must be efficiently distributed. Frequently, spare part orders are filled using the same process and provides spare parts information.

[A6] Support Product - After a product is manufactured and sold, certain support functions might be necessary. These might include issuing manuals and documentation, providing training and logistics support, providing repair services, or issuing spare parts.

Providing product support throughout the product's life cycle is very important. It affects the perception of both the enterprise and the product by the customer, and therefore affects the ability of the enterprise to remain competitive.

IDEF0 models are a hierarchical collection of diagrams which form a model. The intent of the model is to introduce the information in a consistent and understandable manner. The reading of an IDEF0 model by examining each diagram before proceeding to the next level is referred to as "breadth-first" reading. An overview of the model is provided in this manner. The reading of an IDEF0 model to look at the details by reading down the "tree" is referred to as "depth-first" reading. The node tree of a model provides a quick overview of all the activities in a model . The first two decompositions of the Operate Enterprise model are shown in figure 6 below. The complete details of the model may be viewed at the Enterprise Engineering Group of the Automation & Robotics Research Engineering website at: http://arri.uta.edu/enteng/ in the enterprise models section.

The superior performance of the extended enterprise is central to achieving manufacturing excellence in the 21st century. Modeling is an approach to providing a common understanding of the enterprise and how to achieve its desired future condition. Models are useful for many purposes including to act as a baseline for continuing process improvement. The enterprise reference model presented in this paper provides a clear and concise graphical view of the operation of current manufacturing enterprises. By providing an enterprise reference model that has gathered input from many other models, the resulting model may be applied to a variety of sizes and sectors of manufacturing. The Automation & Robotics Research Institute (ARRI) at The University of Texas at Arlington has developed several models of the manufacturing enterprise. The six basic activities of a manufacturing enterprise are defined in this model as Direct Enterprise, Acquire and Develop Assets, Acquire Customers and Orders, Design Product and Processes, Fill Orders and Support Product. If properly developed, this reference model could lead to a suite of models to act as living models to aid in monitoring the capability of an individual process as well as the enterprise as a whole in its response to unanticipated change.