Transactions on Information and Communications Technologies vol 11, 1995 WIT Press, ISSN

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1 Key quality characteristics of logistic information systems in changing business environments J.H. Trienekens, C. Meijs Department of Management Studies, and Department of Computer Science, Wageningen Agricultural University, Hollandseweg 1, 6706 KN Abstract Wageningen, The Netherlands Business environments are changing fast. Quality characteristics of logistic information systems must be related to new management concepts and information technology opportunities. They must not only refer to software, but also to organisational procedures and to interfaces with other systems. New generations of logistic information systems must especially focus at flexibility and integration. 1 Introduction The logistic manager in many companies has to cope with higher quality demands on products, shorter product life cycles, broader assortments of products and improved delivery conditions to customers. To deal with these challenges new management concepts and new information technology are available. In this paper, key quality characteristics of new generations of logistic information systems are analysed in relation to production management concepts and information technology (see figure 1). Several practical investigations regarding information systems, inter-company collaboration and evolution in the market of logistic information systems were carried out on behalf of our project. Our case was the food processing industry. In our study of quality characteristics, we refer a.o. to the models of Boehm [3] and Cavano & McCall [6]. For the analysis of logistic information systems we refer to Bertrand [2]. In section 2 we will describe the main characteristics of and the most important developments in the food processing industry, taken as our subject. Section 3 gives an overview of evolutions in production

2 148 Software Quality Management management concepts. Section 4 deals with information technology opportunities for logistics. Section 5 describes a quality framework for logistic information systems. Section 6 concludes the paper. Management concepts Figure 1: research concept 2 Food processing industries The food processing industry is one of the most important branches of industry in the European Economic Community (EEC), (Eurostat Industrial Yearbook [5]). This is reflected by the share of this industry in the gross value added of industrial production that is more than 10% in the countries of the EEC; in the Netherlands more than 17%. Typical products in the food processing industry are canned food, dairy products, beverage products, meat products,fishproducts, and many more. 2.1 Important characteristics: quality variations and complex process structures An important characteristic governing the supply of raw materials is the overall variation in quality (composition, age, taste, form, color). This is mainly caused by weather conditions and because of the impossibility of standardising live produce. A characteristic strongly related to quality aspects is perishability which applies to most produce (e.g. vegetables, fruit, meat); quality also varies in time. The fact that raw produce is perishable and subject to quality variations, means, it either has to be processed directly after arrival at the company, or special storing facilities (e.g. freezing and cooling facilities) have to be available. This makes the storing and handling of produce for these industries rather complex and yields in production processes often uncertain (Trienekens [11]). A major characteristic in the production process of food industries is the production of by-products. By-products result from the production processes and have to be sold as well (e.g. cheese and whey; butter and buttermilk). A complexity increasing factor related to this subject is that food processing industries produce in general a large variety of varying

3 Software Quality Management 149 recipes (if the composition of an ingredient changes, the amounts of the other ingredients has to change as well). Because of the high complexity of many processes and because machine-capacities are relative expensive in these companies, management of capacities is often just as important as management of the product flow (Trienekens [11]). 2.2 Changing business environments: evolving customer relationships Currently, many changes are taking place in the area of food production. Important developments are the higher customer demands with regard to product quality (growing health and growing environmental consciousness!), the assortment of end-products and the length of the product life cycle. Strongly related to these issues, we see in the food industry an emerging role for the packing industry; often one food product can be obtained in many different packages depending on the wishes of the customer. Another important issue with regard to customer-relationships is the time and quantity of sales in the short run becoming more and more unpredictable for many companies. This is caused by the policy of chain stores and the unpredictable behaviour of consumers and new markets. These developments lead from a business internal viewpoint to: more attention to customers demands and expectations, higher orientation towards quality control and environmental issues, and a shift from the production of bulk towards the production of specialities. From a business external viewpoint we notice developments towards collaboration with important suppliers and customers, sometimes leading to collaboration in so-called product chains (Meijs & Trienekens [7]), the increasing importance of a solid distribution system and concentration of companies at EClevel. 3 Developments in production management concepts 3.1 Traditional concepts: Manufacturing resource planning Most traditional production systems are based on Manufacturing Resource Planning (MRP) (Bertrand [2]). MRP integrates supply, demand and production planning functions. Major modules of MRP are the long-term (often 1 month or more) production planning module and the materials requirements planning module. For long term production planning a solid forecast of market demands is essential. Given the long term production plan, the requirements of materials for different points of time in the production process are computed on the basis of a Bill of Material. The bill of material describes the components structure of the product. From this a production plan proceeds: the system produces work-orders to be taken into production at shop-floor level. The concept has been developed for industries with discrete

4 150 Software Quality Management manufacturing processes (v. Rijn [10]). These industries produce mostly bulk products to stock (they sell products from stock). Major characteristics are: -a predictable supply of raw materials and demand of products, with regard to quality and quantity; -a convergent, fixed, product structure (BOM): one production process yields only one end-product, materials are fixed; -a planning orientation on products and materials. From the characteristics and developments described in section 2, demands with regard to production planning in food industries can be deduced. Production planning concepts for food industries must be able to handle: -a varying supply of raw materials and demand of products, with regard to quality and quantity; -a divergent, variable, product structure: one production process often yields several (by-)products; materials are dynamic and variable in nature; -a planning orientation on (machine-) capacities. 3.2 New directions: customer orientation, total quality management and capacity planning As a consequence of the increasing complexity of the choices to be made in managing the production processes in food industries, there is a growing need to appropriate production management concepts. In recent years we have noticed a shift from MRP concepts to customer oriented concepts based on timely and flexible production, and concepts based on capacity oriented planning. At the same time new attention to quality issues leads to the application of quality management concepts. The most important concept is Total Quality Management (TQM) by which customer demands, product quality and process quality are linked into an integrated quality system. -Customer order orientation. Important developments exist towards concepts that can handle different so-called customer order decoupling points (Trienekens [11]). A customer order decoupling point is the point in the production process from which the process starts after a customer-order has come in. For part of the products in food industries production to stock still holds. For an increasing amount of products however a major part of the production process only starts after the customer order comes in. For these orders the 'just in time' (JIT) concept can be applied to, at least part of, the production process. JIT is a short term production concept and is based on the requirements of customers and a philosophy of flexibility and responsiveness. With JIT, a company produces only the products and components that are required by a customers order. The customers therefore dictate production by placing orders for the products. The object is to only receive materials immediately prior to their use in the production process.

5 Software Quality Management 151 -Total Quality management. Total Quality management aims at the integral improvement of products, processes and production means (people) (Trienekens [12]). The relation of the company to the customer is of major importance. One of the key issues of Total Quality Management (TQM) is the search for continuous quality improvement. People that are working together in teams on continuous product- and process improvements is a key issue in this concept. TQM therefore opts for more then just quantitative measurements of end products or standardisation of processes (compare ISO 9000). However, besides people improving the process, continuous and thorough measurement of customers perceptions related to process and product quality remains important to achieve a secured quality system. -Capacity oriented planning concepts. The most complex part of capacity planning takes place at the shop floor level in which actual production takes place. An important task for the shop-floor production manager is scheduling the work-orders. The basis of the schedule made is the production capacity available, with its constraints and conditions. In food industries optimizing the production sequence and reduction of setup times are of key importance. Concepts of capacity planning, often supported by electronic planning boards, are now more and more used for optimisation of the workflow in food industries. A better planning of capacities can offer opportunities to a better and more flexible response to customer orders. The new concepts offer opportunities for food industries to better adjust their processes to customer demands. Flexibility, responsiveness, customer oriented quality assurance and optimization of the workflow are key notions in this context. 4 Information Technology opportunities for food industries 4.1 Logistic information systems for food industries: quality management and lot traceability In food processing industries production control and inventory control must deal with the variety and dynamics of the quality of the raw produce and semi-manufactures. Quality management therefore is a main topic in food processing industries. A sound quality control system is needed for the registration of the process and the product information (e.g. composition, storage time, history of products). Another important issue in food processing industries is lot registration. It is important to know from which lots the raw produce has been selected during the production process. Traceability is a main topic in food processing industries. Quality management and lot traceability issues in food industries are

6 152 Software Quality Management now more and more linked to the total quality management concept, to achieve a quality assurance system which integrates product and process characteristics with the dynamics of customer demands. This leads to new demands to logistic information systems. 4.2 Evolutions in the market of integral production management systems Most of the demands with regard to registration of process and product data have been met in the ninetie's. A research project in The Netherlands (Moret Ernst & Young [9]) showed an increasing amount of software packages suitable to food industries that support demands like lot-traceability, management of recepies, quality administration, inventory managament, etc. However, the same research showed less support for handling of variable recepies, changeability of recepies, customer specific recepies, traceability of customer orders in the production process. Also less supported were functions like flexible customer order oriented production planning, adequate support of forecasting customer orders, capacity planning, and planning on by-products. Customer orientation, marketing information and decision support are the key issues here. 4.3 New opportunities in information technology: framework for automated production management In a growing number of food industries, on every level of production new computerised information systems can be found, making the steps towards improved functions and internal and external integration of information systems. New information technology opportunities are very promising for the future of logistic information systems. A useful division of production management is a split into three levels. On the highest level we find integration of management of purchasing, sales, inventory management and long-term production planning. The lowest level is the level of process control. At this level production lines and machines are planned and controlled. Between these two there is a third level, the shop-floor. At this level we find functions like scheduling, process control, process registration and quality control. On the highest level (integral production management) important developments in the area of information technology are an increase of functionality (also section 4.2), database technology, 4GL, open systems, intercompany systems with EDI and PDI, graphical user-interfaces. At shop floor level we now see introductions of computer networks for shop floor control and an increasing use of product enclosed information (e.g. barcode). Also electronic planning boards have become available for sheduling tasks at this level; this has been made possible by the fast developments in information technology in recent years, such as high

7 Software Quality Management 153 resolution screens and mouse control. On the level of machine control we see a development from relatively simple machine control by PLC's (programmable logic controllers) towards sophisticated distributed control systems, containing more functions and more possibilities on behalf of integrative management of production lines. Integral Production management 0 ft Shop Floor Control These developments make it possible that machine control can be linked to shop floor control, which again can be linked to integral production management control. In fact we see developments towards Computer Integrated Manufacturing (CIM). CIM is the integration of physical and [ 0 ft Process control Process technology N> Planning and ^ Control data information processing technology, Figure 2: framework for automated throughout the company, and production management therefore encompasses functions like purchasing, production planning, production, quality control, sales, and marketing. An example for a CIM-like architecture for food industries: Adequate forecasting and customer orders (e.g. via EDI) lead to a customer orders sample. The subsequent production orders from the highest management level are linked to the appropriate production method at the shop floor. The specific work methods are stored in a database together with data concerning work-orders, products, recipes, processes, machinecapacities. By means of the computer network and a planning board the production manager can continuously manage the process which is controlled by operators who manage the production lines, supported by PC's that are directy linked to machine control. Changes in customer orders can be planned well at shop floor control level, supported by planning boards and computer networks. Data of machines and processes can be stored in a database and used as management information at different management levels. The new information technology opportunities make a fast and adequate planning cycle in the companies possible. Because of this, faster reactions to customer demands become possible. Integration of systems within the company and with systems of other companies makes therefore a faster but also more flexible reaction to customers orders possible.

8 154 Software Quality Management Another advantage of these CIM-like developments is that product and process data can easy be obtained by different production levels and used for analysis objectives. These data can be very supportive for the use as tools in total quality management (TQM). This to improve quality of products and processes, as related to customer demands and perceptions. 5 Quality characteristics of logistic information systems As has been described in the previous sections of this paper, customer orientation, total quality management and optimization of capacity-use are increasingly supported by new management concepts and information technology. This brings about new challenges and opportunities to developers of logistic information systems. 5.1 Characteristics of logistic information systems Bertrand [2] describes four layers in logistic information systems: -the systems software; -state-independent transaction processing systems; -state-dependent transaction processing systems; -decision support and structured decision systems. The system software contains the application independent software, such as the operating system, a database management system, 4GL, etc. The state-independent transaction processing systems constitute data that are independent from the state of orders and materials in the goods flow to be controlled. Examples are productstructures (bill of material, recipes), routings, capacity data. State-dependent transaction processing systems constitute data about the state of orders and materials in the goods flow. Examples here are orders, quality data, actual customers, etc. The fourth layer supports human decision making: forecasting, production schedules, materials requirements planning, capacity planning. We may conclude from the sections 2, 3 and 4 that in the food industry flexibility towards customer orders and markets, integration with other systems (business internal and external) and decision support functions deserve special attention. Product and process registrations of the production process are in general well supported, as well as long-term scheduling and material planning functions (section 4.2). Important improvements must therefore take place in: -the systems software: flexibility in use and integration with other systems -the state-independent layer, e.g.: customer specific recipes, changeability of recipes, customer orientation in general; -the state-dependent layer, e.g.: quality control and customer order support; -the decision support layer, e.g.: flexible production planning, capacity planning, forecast support, planning on by-products.

9 Software Quality Management Technical changes in logistic software systems Standard software packages usually aim at a wide variety of industries. In order to adapt the software to different businesses, the systems software should provide facilities for the setting of variables with respect to the characteristics of data storage media and peripherals. Furthermore the basic 1st layer may provide syntactical flexibility, so that the formatting requirements for attributes can be adapted to the local requirements. It is more difficult to change the semantics of software. This can be illustrated by the Entity Relationship diagram that is related to the second and the third layer of the model. Decision support is for a large part based on the constraints and conditions given by these two layers. Fig. 4 depicts the extended data structure adapted from Bertrand [3]. by Figure 3: data structure diagram The major entities and their relationships are: Product that has Recipes, Workorder defined for Product performed by Actual process, conducted with Capacity. The changing business environment may press for more flexibility, reflecting in e.g.: -a recursive relationship 'comprises' of Product, indicating that some nearly 'end-products' are engineered to customers specific requirements; -an n:m relationship between Process and Capacity (instead of an n:l relationship); -an l:n relationship between Product and Recipe, indicating that recepies can be adjusted to the taste and demands of the customer. As we have described earlier, we believe that the concepts and the information technology for the challenges described above are available. However, this brings about important shifts in the attention to quality attributes of logistic information systems for developers and users.

10 156 Software Quality Management 5.3 Quality model In order to compare quality in different business logistic situations, both qualitatively and quantitatively, it is necessary to establish a model of quality. Therefore we will introduce a model that is specialized for assesment of logistic information systems. In this reference model we will pay attention to the management (total quality management issues), the software and the system perspective for relevant logistic situations. Some basic assumptions for the construction of this model are: -several perspectives of the involved organisational units and their people have to be incorporated in the quality model. Logistic information systems are often used in a distributed environment; -quality is relative, we may recognize trade-offs between different quality characteristics. -Quality model of Boehm and Cavano & McCall. Boehms's model was defined to provide a set of 'well-defined' characteristics of software quality (Boehm [3]). The model is hierarchical in nature and the quality criteria are subdivided. The division is made according to the uses made of the system and is an early attempt to bridge the gap between the software engineers and users of information systems. Cavano & McCall [6] address three areas of software work: product operation, product revision, and product transition. These two models share a number of common characteristics arising from their hierarchical nature and also from their origins in the computing culture of the 1970's. In literature severals other models for software quality attributes were established; for the Netherlands we can refer to Deelen & Rijsenbrij [4] and Bemelmans [1]. Neither model claims to be universal or exclusive. For the logistic application area we will determine the relative importance of these characteristics. -Quality model of logistic information systems. Our quality model of a logistic information system comprises 3 major elements. Besides the technical characteristics of the system (intrinsic software quality), we distinguish the quality of organizational agreements and rules, and the interactions of the system with consumers, suppliers and related systems (for the latter see also Meijs & Trienekens [7]). By doing this we take into account the technical (IT) perspective, the organisational (management) perspective, and the systems perspective (figure 3). These three elements can be elaborated into several quality attributes that are common among software quality practitioners: -Technical (software) quality: operations with the logistic information system should hold correctness, reliability, maintainability, testability and integrity; -Organisational quality refers to: functionality (completeness and consistency), useability (learnability), support to the organisation and manual procedures. These criteria are related to TQM and JIT, section 3.2;

11 Software Quality Management 157 -Quality of interfaces captures the criteria portability, reusability and interoperability. These criteria are related to developments to computer integrated manufacturing, section 4.3. Flexibility and integration demands to logistic information systems cover all three major elements. Of major importance is that organisational aspects, by means of total quality management in our example, become integrated with the software system and with other adjacent systems. Flexibility is especially Organisational quality procedures Figure 4: quality model to be found in the technical element (customer orders must be able to be worked out fast and adequatly) and in the organisational element (the human factor and the decision support models in the organisation are of major importance for the logistic information system). Integration is especially to be found in the organisational element, in the systems (interface) element: connections with other (inter)organisational or software systems, and in the software-technical element (integrity of data). 6 Conclusions and further research In this study key characteristics of logistic information systems in changing business environments were described. Analysing the changing business environment of the food industry and major developments in production management concepts and IT opportunities, we conluded to a change in focus on quality characteristics of logistic information systems. In the new generations of information systems the emphasis moves to the characteristics integration and flexibility. Quality of logistic information systems is not only related to technical quality aspects but strongly refers to organisational and (inter-)system quality aspects. This extension in quality thinking explains flexibility and integration from an organisational integrating viewpoint. However, important questions remain for further research. A natural step beyond quality models is the measuring and benchmarking of processes (Meijs [8]); every quality model should have its metrics system. Also further research has to be done to trade-offs between quality attributes in logistic information systems. Introducing more flexibility in a logistic information system may well conflict with attributes like maintainability, functionality and useability. This should be well considered in developing and using logistic information systems. A third important research questi-

12 158 Software Quality Management on would be the elaboration of the linkage between organisational quality, software quality and system quality. References 1. Bemelmans, T.M.A. Management information systems and automation, Kluwer, den Haag, 1994, (in Dutch). 2. Bertrand, J.W.M., Wijngaard, J. & Wortmann, J.C. Production Control, a Structural and Design Oriented Approach, Elsevier, Amsterdam, Boehm, B.W., et al. Characteristics of software quality, TRW Series of Software Technology, Vol. 1, North Holland Publishing Company, New York, Delen, G.P.AJ. & Rijsenbrij, D.B.B. Quality attributes of software projects and information systems, Informatie, jrg. 32, nr. 1, Kluwer, Deventer, 1990, (in Dutch). 5. Eurostat. Industrial Yearbook 1993, Statistical Office of the European Economic Community, Luxembourg, Cavano, J.P. & McCall, J.A. A framework for the measurement of software quality, Proceddings of the Software Quality and Assurance Workshop, red. S. Jackson and J. Lockett, ACM, Meijs, C. & Trienekens, J.H. Optimization of the value chain using computer aided reference models, 3rd IFIP WG7.6 Working Conference on Optimization-Based Computer-Aided Modelling and Design, Prague, The Czech Republic, May 24-26, Meijs, C. & Dijks G. Information system architectures and benchmarks for local tourist offices, 2nd Int. conference on information and communication technologies, Springer Verlag, Vienna, Moret Ernst & Young, management consultants. Logistic packages food, Utrecht, The Netherlands, 1993, (in Dutch). 10. Rijn, Th.M.J. van, Schyns, B.V.P., et al. MRP in Process; The applicability of MRP-II in the semi-process industry, van Gorcum, Assen The Netherlands, Trienekens, J.H. & Trienekens, J.J.M. Information systems for production management in the food processing industry, Proceedings of the IFIP TC5/WG5.7 Fifth International Conference on Advances in Production Management Systems- APMS '93, Eds LA. Pappas and I.P. Tatsiopoulos, Greece, Athens, Trienekens, J.J.M., Time for better quality, improvement of information systems, Thesis, Thesis Publishers, Amsterdam, The Netherlands, 1994, (in Dutch).