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25-Economic View of Cim System Architecture

25-Economic View of Cim System Architecture

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Economic view of CIM system architecture
CIM, system architecture, modelling, ABC( Activity Based Costing), AHP ( Analytical Hierarchy Process)
The synergistic advantage of systems integration forComputer Integrated Manufacturing ( CIM) has been a power- ful thrust behind the productivity advancement in recent dec-ades. However, the dependency among components, theintangible bene®ts and complexity of the system have been a barrier for system developers and the business community. Thispaper reports a systematic approach to assess economic merits of the CIM system. It projects CIM system designs on a multiplelayer architecture with consideration of project life cycle. Itintroduces a modelling formalism to present a structured viewof the economic aspect of the CIM system. The multiplecriteria’s aspect of CIM justi®cation was treated with theAHP ( Analytical Hierarchy Process) method. The complexityof various cost factors is reduced through application of theABC ( Activity Based Costing) method. The bene®ts of lowlevel activities, both tangible and intangible, are then hierarchi-cally aggregated into higher level system objectives. It also pro- vides the necessary linkages between the economic and other views. A simple example was used to illustrate the approach.
A uthors
Y. Chen, Department of Automation, Tsinghua University, Beijing, China; M. M. Tsengand J. Yien, Department of Industrial Engineering and Engineering Management, Hong KongUniversity of Science and Technology, Hong Kong.
graduated from Dept of EE, Tsinghua University, Beijing, in 1959. He had hisadvanced study at UMIST and University of Strathclyde, UK from 1979 to 1982. Up to now, hehas been teaching and researching in Tsinghua University for 38 years. Before 1987, he majored inautomatic control systems, especially large-scale systems theory and its applications. After 1987,he has been concentrating in the research and implementation of Computer IntegratedManufacturing. He has worked for the CIM implementation of several large Chinese companies,and did research on CIM design and implementation methodology. His current research interestlies in CIM system architecture and corresponding modelling methods, as well as justi®cationcriteria of CIM implementation. He is a senior member of IEEE, and a fellow of Hong KongInstitute of Engineers. He has published four books and more than 90 papers.
joined the HKUST faculty as the founding department head in 1993 afterholding engineering executive positions at Xerox and Digital Equipment Corporation for almosttwo decades. He has been teaching and consulting on business process design, AI applications,managing technology and systems design. His B.S. degree is from National Tsinghua University( Hsinchu, Taiwan) . He earned both his MSIE (1973) and Ph.D. (1975) degrees from PurdueUniversity.
 J. T. Y 
is working as a consultant in the CAD Center of the Hong Kong ProductivityCouncil, Hong Kong. His research interests include design of manufacturing and enterprise sys-tems, business process reengineering, axiomatic design and supply chain management. He hasearned his bachelor and master degrees in industrial engineering at the University of Windsor,Canada and is currently a Ph.D. candidate in industrial engineering and engineering managementat the Hong Kong University of Science & Technology.
0953-7287/98 $12
1998 Taylor & Francis Ltd.
1. Introduction
Integration of the manufacturing system has been a very important subject in manufacturing industries inthe last two decades (Chen 1991). In particular the eco-nomical implications of system integration have drawn asigni®cant amount of interest from academics and practi-tioners. The integration of CIM systems strives to derivesynergism among di
erent elements in the manufactur-ing systems. Each individual component, regardless of itssize of investment, often can not be justi®ed on its ownmerits. Returns of CIM system investment, both capitaland human resources, can be elusive. Compounding thecomplexity of the system design, dynamic changes duringthe life cycle of the CIM system implementation are alsoconsidered in this research project. The proposedsystematic approach starts with projecting a CIM (Computer Integrated Manufacturing) system in amulti-layer system architecture. Through which, onecan apply the Analytical Hierarchy Process (AHP), atheoretically sound process, to decompose the systemobjectives and evaluate di
erent system alternativesaccording to multiple criteria. Activity Based Costing(ABC) is also adapted here for connecting key costdrivers in manufacturing enterprise with the businessobjectives. The objectives of this research are several fold:
it provides a systematic approach to evaluate di
er-ent design options for manufacturing systems;
it provides a framework for both business managersand technical professionals to better communicatethe business needs and technical opportunities;
it enables the CIM project team to prioritize thelarge number and sometimes con¯icting prioritiesof CIM initiatives.This paper reports some of our ®ndings and uses asimpli®ed example to illustrate the approach.In the next section, the applied CIM architecture will be introduced and the role of the economic viewdescribed. In Section 3, a proposed modelling formalism will be explained. In Section 4, the AHP method will beintroduced to treat the intangible factors. Finally, basedon the relationships within SLA, the interconnectionsamong di
erent views are explained and a brief conclu-sion given.
2. The contents of SLA and the role of theeconomic view 
C I M system architecture 
Analysing the problem of global CIM system inte-gration will usually start from establishing a system archi-tecture (Chen 1992). A CIM system architecture can bede®ned as `
a set of structured models that represent di 
erent aspects of the w hole enterprise’ 
(AMICE 1993). In essence,models are used to extract the main system characteristics for describing and analysing the systems. Because CIsystems have many di
erent aspects, expressions fromdi
erent perspectives, in this paper referred to as views,are important to de®ne the systems with clarity. Severalrepresentations of CIM system architecture have beenproposed in recent years. CIMOSA (1993), PERA(Williams 1992), GIM (GRAI 1992), etc. are examplesof CIM architectures often mentioned in the CIM research community. These CIM architectures providedimportant frameworks for practitioners to plan andimplement CIM systems in industry. It also served as aroad map for developers to design system components.However, they are still far from general acceptance,one of the di
culties arises from the gap in the dynamicnature of the development life cycle and the economicreality of the CIM system. A Stair-Like CIM SystemArchitecture, simply called SLA, proposed by Chen(1996), attempts to provide some remedy for overcomingthis di
culty. In this proposed architecture, an economic view is explicitly incorporated. As shown in ®gure 1, thisscheme of system architecture includes six views in theconceptual development stage, i.e. function, information,resource (physical), decision, organization and economic views. First, functional requirements for operating thesystem would be described in function view by theIDEF0 method. Then, resource view provides the neces-sary resourses to support the realization of functionalrequirements. Information, decision and organization views are describing di
erent aspects of the global sys-tem. Finally, the economic view will be described indetail in this paper.242
Y uliu C hen 
et al.
Figure 1. Stair-like CIM system architecture.
A pplying C I M architecture f or analy sing system integration 
CIM implementation often starts from two models, i.e.AS-IS and TO-BE models. The AS-IS system models are built to serve as a snap shot representation of the existingsystem. It is often drawn by re¯ecting the existing systemsconstruction under a CIM architecture. Similarly, TO-BE models are used to describe the design of new systems.Di
erent views are also captured in model description sothat analysis can be carried out. For example, the func-tion model of the system means that it is an abstractrepresentation for the functionality of the system. Itrepresents an aspect that is interesting to the analysis.Although it does not represent the entire system, it pro- vides a very useful means to model a particular perspec-tive of the entire system for analysis. In this sense, it can be called a view of the global system. The existence of di
erent views means that the global system can be ana-lysed from di
erent perspectives. This is similar to theengineering drawings that di
erent views are expressedto describe a component or assembly. Each view has itsown property. However, all of them are useful in describ-ing the same system. Often there are interactions amongdi
erent views and so could not be completely ortho-gonal. They complement each other to make the wholerepresentations, i.e. the system architecture, completeand accurate. By checking the consistencies and coher-ence of those AS-IS models of di
erent views, the incon-sistent problems, or con¯icts, would be found. Theseshould be solved or improved in the design of the newsystem. The graphical modelling languages make the work much easier and clearer than only using descriptive analysis.2.3.
T he characteristics of S tair- L ike C I M system architecture 
The Stair-Like Architecture (SLA) contains a threeaxes framework (®gure 1) . Each axis, in essence, containsdi
erent types of models for analysis. The ®rst axisprovides the views for designers performing modellinganalysis. A total of six views can be considered.Depending on the complexity of the systems, designerscan choose the number of views as required. The secondaxis shows Project Life Cycle, i.e. project de®nition,analysis, primary design, detailed design and implemen-tation. Because the job of a working team for CIM imple-mentation would be considered complete when the globalintegrated system starts to operate normally, the focus of CIM architecture is in the area of project formulationand development. The maintenance stage is not consid-ered in this architecture. The third axis is for stepwiserealization. In practice, modelling analysis is usually used for conceptual analysis and primary design. First,models of the existing system (AS-IS) should be built toanalyse the problems that need to be re-engineered.Then, a set of desired future models should be designedto express the properties of the TO-BE system. This is thecontents of primary system design. Then, designersshould map these contents in the models of the newsystem to a detailed technical speci®cation. For realizingall the requirements in this speci®cation, a detaileddesign in three concrete domains, i.e. manufacturing,information, and human and organization, should beproduced for this new system. The outcomes of detaileddesign are speci®c systems speci®cations. They are con-crete, accurate and directly realizable. No more abstractmodelling would be needed for this stage and later.2.4.
T he role of econom ic view 
The decision to go ahead and implement CIM oftenrequires detailed justi®cation, e.g. a return on invest-ment. Based on the AS-IS models, cost/bene®t analysiscould be carried out. This work helps to identify thosenon-value added or little value-added processes, andto set priority for those processes which need to be re-engineered. Then, by comparing the same performanceindices of TO-BE models with that of AS-IS models, it facilitates the decision making process. During theprimary system design stage, a number of data wereobtained based on estimation or referred to similar exist-ing data. After the detailed design, actual costs of new facilities and other resources would be obtained.Substituting those parameters into the economic modelto correct the original estimations will help the designerto get more accurate results. It is a necessary iteration.Then, the cost/bene®t di
erence between the AS-IS andTO-BE models indicates the improvement of establishingthe new system.
3. Modelling formalism of economic view 
W hy is the A B C method chosen f or this modelling formalism? 
The objective of the economic view modelling is toanalyse and help justify the ®nancial aspects of CIM systems. Since CIM systems involve a huge amount of investment, it is necessary to have complete and true®nancial information for a justi®cation purpose.Traditionally, cost accounting has played a role to pro- vide such ®nancial information to show how di
erentprocesses contribute to the pro®tability of a business. Itis very common in the old practice to focus on productcosts that are derived from ®xed and variable costs. Fixedcosts are those which are insensitive to the sales volume,
 E conomic view of C I M system architectur

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