Mangment Asignment

NAME: ISRAA NATIQ JABBAR
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1.PRODUCTION MANAGEMENT
1. Define production:
According to Elwood Butta “production is a process by which goods or
services are created”.
Production involves the step by step convertion of one form of material into
another through chemical or mechanical process with a view to enhance the utility
of the product or services.
2. Characteristics features of production system?

1. Production is an organized activity.
2. The system transforms the various inputs into useful outputs.
3. Production system does not operate in isolation from the other organizational
systems.
4. There exists a feed back about the activities which is essential to control and
improve system proformation.
3. Define production management:

“Production management deals with the decision making related to
production process of that the resulting goods and service is produced according to
specifications in the amounts and at the scheduled demanded and at minimum cost”
– Elwood Butta.
4. What are the difference between production management and operation

management?
Production mgmt Operation mgmt
1. It is concerned with manufacturing 1. It is concerned with services
2. Out put is tangible 2. Output is intangible
3. In this, job useless labour and more 3. In this, job use more labour and
equipment less equipment
4. There is no customer participation 4. Frequent customer participation
5. What are the functions of production mgmt?

1. Production planning
2. Production control 1
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3. Factory building
4. Provision of plant services
5. Plant layout
6. Physical Environment
7. Method study
8. Inventory control
9. Quality control
10. Product department
6. Different classification/types of
production:
1. Intermittent production
1.1. Job or unit production
1.2. Batch or quantity production
2. Continuous or mass production
3. Flexible manufacturing system (FMS)
4. Computer Integrated manufacturing (CIM)
7. Difference between job or unit production and batch production:
Job Pdn Batch Pdn

1. Job shop production are 1. This production is characterized by
characterized by manufacturing the manufacture of limited number
of one or few quantities of of products produced at regular
products intervals.
8. What are the characteristics of batch productions?

1. Shorter production runs.
2. More number of set ups and hence set up cost.
3. Amount of supervision required is less compared to job order.
4. Plant and machinery are flexible.
5. Higher level of work in process inventory.
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9. Batch production
Batch production is as a form of manufacturing in which the jobs pass
through the functional department in lots or batches and each lot may have a
different routing.
10. Job production

Job production are characterized by manufacturing of one or few quantity of
product is designed and produced as per the specification of customers with in
prefixed time and cost.
11. Characteristics of job production:

1. High variety of product and low volume.
2. Use of general-purpose machines. And facilities.
3. Frequently changing set ups.
4. Process type layouts for arrangement of facilities.
5. Large inventory of materials, tools and parts.
12. What is meant continuous / mass production?

Manufacture of discrete parts or assemblies using a continuous process are
called mass production. The machineries are arranged in a line or product layout.
13. Advantages of mass production:

1. Higher rate of production with reduced cycle time.
2. Higher capacity
3. Less skilled operator can manage the process
4. Low in process inventory
5. Production cost per unit per unit will come down due to economies of scale.
14. Define Flexible manufacturing system (F M S)

A Flexible manufacturing system is a configuration of computer. Controlled,
semi-independent workstations where materials are automatically handled and
machine loaded. An FMS is a type of flexible manufacturing system that builds
on the programmable automation of NC and CNC machines.
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15. Characteristics of FMS

1. It contains several work station, each does different operations.
2. The work station and machines are automated.
3. FMS is a computer control system.
4. Three program machine, select position and activities the specific tool for
each job.
16. What are the classification of production based on type of production

& strategy:
1. Make to stork (eg) books, television, airline flight.
2. Make to order (eg) wedding invitations, customer built homes.
3. Assemble to order (eg) computer system, corporate training.
17. What is meant by make to stock?

Make to stock products and services are designed and produced for
“standard” Customers in anticipation of demand. This system ensures immediate
delivery of good quality, reasonably priced, off the shelf standard products (eg)
Books, Televisions, airline flights etc.
18. Make to order?

Make to order products and services are designed, products and delivered
to customer specification in response to customer order.
(eg) wedding invitations, custom – built homes.
19. Assemble to order?

Assemble to order products and services are produced in standard modules
to which options are added according to customer specification.
(eg) Computer Systems, corporate training etc.
20. Interration between production and marketing?

 Needs of customer with respect to the company’s products and services.
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 The demand for the products and the likely market frend for the future period.
 Special features required by customer regarding the products like feedback, performance
etc.
 Delivery requirement of the products. Market department requires the following
information.
 Production status of the production.
 Performance characteristics of products.
 Delivery schedules.
 Product features and specification.
21. Interrelation between production and Finance

The product department has to invest in physical facilities, requires raw materials and
components parts, etc. Thus Finance department has to make provisions for both long term and short
term requirements.
The production department has to furnish the detailed production budgets to finance department.
22. Interrelation between production per and personnel

The personnel department has to keep records of the development of workers, identify their
training needs, man power utilization etc.
In order to achieve production goals in particular and organisational goals in general, personal
deportment has to channelise the skills and efforts of the work fore into constructive outlets to achieve
the set objectives.
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2.Purchasing Management and Supplier Relations,
As is known, the process of procuring raw materials can be carried out properly if the supplier chosen by the
company has sufficient commitment and capability. For mutual harmony, the vision and mission of the two
parties must be the same, mutually beneficial, and both parties will get a win-win solution so that
cooperation can continue to run well.
Keep in mind that the supplier is the company's business partner and the company must also understand that
the second line of the production process is the supplier. So if at any time there is a problem with the
material or materials ordered, it is not the responsibility of only one party but a shared responsibility which
must be adjusted to their respective portions.
Purchasing is one of the general basic functions that exist in every company. It is said to be a function,
because if there is no purchase, the company will not be able to run well. Meanwhile, from its own nature,
purchasing is a very important and integral basic part of a business management.
While purchasing management is a way that is applied to be able to manage various goods needed by the
company, of course involving several other sources such as people, systems and processes that aim to buy
various goods and services so that they can then be processed and then resold so that the company can
benefit.
Meanwhile, according to Wikipedia, purchasing management (procurement management) is a link in a
material management activity. Purchasing management has a role as an intermediary between distributors
and companies in terms of procurement of goods/services that can support company operations.
While the purchasing department is a part that regulates or makes purchases in a company. Purchasing
management has basic factors, one of which is that the goods that will be purchased must be obtained at the
best price. This is done in order to save costs and the company can benefit.
As for the purchase requisition (PR) is made by someone or an outside part of the purchasing department
who is there when they need a product. Whether it's to improve service to its customers or to supply outlets.
In large companies, they usually use a computerized purchasing procurement system to carry out the
purchasing process. This is in contrast to small companies that tend to still use manual systems or those
that are still simple to carry out the purchasing process. It can be concluded that large companies do prefer
a more modern system to make it more practical and minimize human error at the time of recording,
because large companies usually buy goods in large quantities.
What is the Role/Function of Purchasing in a Company?
There are several roles/purchasing functions in a company, including the following:
1. The most important function in a company

There are 6 main functions in a company, including: creation function, finance function, personnel function,
purchasing function, conversion function, and distribution function. If one of these 6 functions is not
fulfilled, the company cannot operate smoothly. Therefore, these functions must exist so that the company's
operations can run well. However, there are also companies that double it into one department.
2. An Important Part Of The Production Process
Every company, of course, has its own goal in order to be able to develop and produce goods and of course
can take advantage. In order to make it happen, the company must have 5 M namely Machines, Manpower,
Materials, Money and Management.
Materials are various raw materials that will be processed by the company so that they can become products
that are ready to be marketed to consumers. Purchasing management will certainly manage and take care of
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this section so that the goods purchased are of high quality, and the quantity and price must also be
appropriate.
2. Responsible Purchasing Management for Outside Manufacturing

Purchasing management usually only buys raw or semi-finished goods, and later these goods are produced
to become finished goods in the production section. So it can be said that purchasing management is
responsible for various things that are outside of manufacturing. While the part in manufacturing will be
taken care of by the production department.
But, what is meant by manufacturing? Actually manufacturing is an interrelated activity and from these
activities will create a finished product. Manufacturing activities themselves include product design,
selection of raw materials, planning for the production process, inspection and also marketing.
4. Corporate Profit Center
Purchasing management can also be said to be the center of corporate profits. Because a company makes a
profit or not is determined by the team from the purchasing department. The company's profits will increase
if the purchasing team suppresses the spending budget. Therefore, it is very important to know when is the
right time to be able to buy raw materials.
5. Part of Corporate Strategy
Any company certainly has a strategy to be able to benefit and develop its business. And purchasing
management is very important because it can have an effect on profits for the company.
Steps in Making a Purchase
Before deciding to buy a raw material, there are several steps in making a purchase, including:
1. Doing Planning
The first step that must be taken by the purchasing management team is to do careful planning. This plan
includes what are the advantages and disadvantages when buying raw materials at certain times. And the
purchase must also be in accordance with the existing budget.
2. Choosing a Supplier
The second is to choose a supplier that suits the company. The supplier that will be chosen by the company
is of course a supplier with a good reputation, professional, highly committed to being able to grow
together, having healthy finances, and being flexible. Management will also definitely consider where the
location of the supplier is. Because the farther the location of the supplier, the shipping costs will also
increase so that it can make the company spend more.
3. Make an Offer
After the supplier is determined, then the offer is made. This offer must take into account various provisions
from the company such as details of goods, duration of use, number of goods, and payment due.
5. Negotiation
And negotiations were carried out so that they could achieve common goals and get a win-win solution.
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3.Supply Chain Relationships and Supplier Relationship Management:
In many cases, the information systems, technology, inventory, and transportation management systems
required for the supply chain management (SCM) effort are available and ready to be implemented, but the
initiatives fail due to poor communication of expectations and the resulting behaviors.
Relationship Management is defined as the strategy employed by an organization in which a continuous

level of engagement is maintained between the organization and its audience. Relationship management can
be between a business and its customers (customer relationship management) and between a business and
other businesses (business relationship management). Managers often assume that the personal relationships
important to the supply chain will fall into place; however, managing supply chain relationships among
organizations can be the most difficult part of the SCM initiative.
Moreover, the single most important ingredient for successful SCM may be trusting supply chain
relationships among partners in the supply chain, where each party has confidence in the other members’
capabilities and actions. And trust building is characterized as an ongoing process that must be continually
managed. One materials management vice president at a Fortune 500 manufacturer expressed this feeling as
follows:
“Supply chain management is one of the most emotional experiences I’ve ever witnessed. There have been
so many mythologies that have developed over the years, people blaming other people for their problems
based on some incident that may or may not have occurred sometime in the past. Once you get everyone
together into the same room, you begin to realize the number of false perceptions that exist. People are still
very reluctant to let someone else make decisions within their area”.
Supplier Relationship Management – A Perspective:
In the early stages of supply chain development, organizations often eliminate suppliers or customers that
are unsuitable, because they lack the capabilities to serve the organization, they are not well aligned with the
company, or they are simply not interested in developing a more collaborative relationship. Then,
organizations may concentrate on supply chain members who are willing to contribute the time and effort
required to create a strong supplier relationship management. Firms may consider developing a strategy
with this supplier to share confidential information, invest assets in joint projects, and pursue significant
joint improvements.
However, many firms lack the guidelines to develop, implement, and maintain supply chain alliances in
creating new value systems, companies must rethink how they view their customers and suppliers. They
must concentrate not just on maximizing their own profits, but on maximizing the success of all
organizations in the supply chain. Strategic priorities must consider other key alliance partners that
contribute value for the end customer. Instead of encouraging companies to hold their information close,
trust-building processes promote the sharing of all forms of information possible that will allow supply
chain members to make better, aligned decisions. Whereas traditional accounting, measurement, and reward
systems tend to focus on individual organizations, a unified set of supply chain performance metrics should
be utilized as well.
Strategic alliances can occur in any number of different markets and with different combinations of
suppliers and customers. A typical supplier-customer alliance involves a single supplier and a single
customer. A good example is the supply chain relationships between Proctor & Gamble and Wal-Mart,
which have worked together to establish long-term electronic data interchange (EDI) linkages, shared
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forecasts, and pricing agreements. Alliances also can develop between two horizontal suppliers in an
industry, such as the supply chain relationships between Dell and Microsoft—organizations that collaborate
to ensure that the technology road map for Dell computers (in terms of memory, speed, etc.) will be aligned
with Microsoft’s software requirements. Finally, a vertical supplier-supplier alliance may involve multiple
parties, such as trucking companies that must work with rail-roads and ocean freighters to ensure proper
timing of deliveries for multi-modal transshipment.
Overall, creating and managing a strategic alliance means committing a dedicated team of people to
answering these questions, and working through all of the details involved in managing the supplier
relationship management. Unfortunately, there is no “magic bullet” to ensure that alliances will always
‘work However, it is reasonable to assume that, like a marriage, the more you work at it, the more
successful it is likely to be!
Supply Chain Relationships – In General:
Many firms have directed significant attention toward working more closely with supply chain partners,
including not only customers and suppliers but also various types of logistics suppliers. Considering that
one of the fundamental objectives of effective supply chain management is to achieve coordination and
integration among participating organizations, the development of more meaningful “relationships” through
the supply chain has become a high priority.
Supply chain relationships in general, with an emphasis on the types of relationships, the processes for
developing and implementing successful supply chain relationships, and the need for firms to collaborate to
achieve supply chain objectives. The second is that of the third-party logistics (3PL) industry in general and
how firms in this industry create value for their commercial clients. The 3PL industry has grown
significantly over recent years and is recognized as a valuable type of supplier of logistics services.
As suggested by the late Robert V. Delaney in his 11th Annual State of Logistics Report, supply chain
relationships are what will carry the logistics industry into the future. In commenting on the current rise of
interest in e-commerce and the development of electronic markets and exchanges, he states, “We recognize
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and appreciate the power of the new technology and the power it will deliver, but, in the frantic search for
space, it is still about supply chain relationships.” This message not only captures the importance of
developing logistics relationships but also suggests that the ability to form relationships is a prerequisite to
future success. Also, the essence of this priority is captured in a quote from noted management guru
Rosabeth Moss Kanter2 who stated that, “being a good partner has become a key corporate asset; in the
global economy, a well-developed ability to create and sustain fruitful collaborations gives companies a
significant leg up.”
Intensity Of Involvement:
The range of supply chain relationships types extends from that of a vendor to that of a strategic alliance. In
the context of the more traditional -vertical’ con¬text, a vendor is represented simply by a seller or provider
of a product or service, such that there is little or no integration or collaboration with the buyer or purchaser.
In essence, the relationship with a vendor is “transactional,” and parties to a vendor relationship are said to
be at “arm’s length” (i.e., at a significant distance). The analogy of such a relationship to that experienced
by one who uses a “vending” machine is not inappropriate. While this form of relationship suggests a
relatively low or non-existent level of involvement between the parties, there are certain types of
transactions for which this option is desirable. One-time or even multiple purchases of standard products
and/or services, for example, may suggest that an “arm’s length” supply chain relationships would be
appropriate.
Alternatively, the supplier relationship management suggested by a strategic alliance is one in which two or
more business organizations cooperate and willingly modify their business objectives and practices to help
achieve long-term goals and objectives. The strategic alliance by definition is more strategic in nature and is
highly relational in terms of the firms involved. This form of supplier relationship management typically
benefits the involved parties by reducing uncertainty and improving communication, increasing loyalty and
establishing a common vision, and helping to enhance global performance. Alternatively, the challenges
with this form of relationship include the fact that it implies heavy resource commitments by the
participating organizations, significant opportunity costs, and high switching costs.
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Leaning more toward the strategic alliance end of the scale, a partnership represents a customized business
relationship that produces results for all parties that are more acceptable than would be achieved
individually. Partnerships are frequently described as being “collaborative”. Note that the range of
alternatives suggested in Figure 5-1 is limited to those that do not represent the ownership of one firm by
another (i.e. vertical integration) or the formation of a joint venture, which is a unique legal entity to reflect
the combined operations of two or more parties. As such, each represents an alternative that may imply even
greater involvement than the partnership or strategic alliance. Considering that they rep¬resent alternative
legal forms of ownership, however, they are not discussed in detail at this time.
Regardless of form, supply chain relationships may differ in numerous ways. A partial list of these
differences follows:
 Duration.
 Obligations.
 Expectations.
 Interaction/Communication.
 Cooperation.
 Planning.
 Goals.
 Performance analysis.
 Benefits and burdens.
In general terms, most companies feel that there is significant room for improvement in terms of the
relationships they have developed with their supply chain partners. The content of this chapter should help
to understand some key ways in which firms may improve and enhance the quality of relationships they
experience with other members of their supply chains.
Model For Developing And Implementing Successful Supply Chain Relationships:
For purposes of illustration, let us assume that the model is being applied from the perspective of a
manufacturing firm, as it considers the possibility of forming a supplier relationship management with a
supplier of logistics services (e.g., transport firm, ware¬houseman, etc.).
Step-1 Perform Strategic Assessment:
This first stage involves the process by which the manufacturer becomes fully aware of its logistics and
supply chain needs and the overall strategies that will guide its opera-lions. Essentially, this is what is
involved in the conduct of a logistics audit, which is discussed in details in SCM-521 ( This course is a part
of: supply chain management certification online and logistics management courses, and they are a part
of supply chain management diploma online. The audit provides a perspective on the firm’s logistics and
supply chain activities, as well as developing a wide range of useful information that will be helpful as the
opportunity to form a supply chain relationships are contemplated. The types of information that may
become available as a result of the audit include the following:
 Overall business goals and objectives, including those from a corporate, divisional, or logistics
perspective.
 Needs assessment to include requirements of customers, suppliers, and key logistics providers.
 Identification and analysis of strategic environmental factors and industry trends.
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 Profile of current logistics network and the firm’s positioning in respective supply chains.
 Benchmark, or target, values for logistics costs and key performance measurements.
 Identification of “gaps” between current and desired measures of logistics performance (qualitative
and quantitative).
Given the significance of most logistics and supply chain relationship decisions, and the potential
complexity of the overall process, any time taken at the outset to gain an understanding of one’s needs is
well spent.
Step-2 Decision to Form Relationship:
Depending on the type of supplier relationship management being considered by the manufacturing firm
under consideration, this step may take on a slightly different decision context. When the decision relates to
using an external provider of logistics services (e.g., trucking firm, express logistics provider, third-party
logistics provider), the first question is whether or not the provider’s services will be needed. A suggested
approach to making this decision is to make a careful assessment of the areas in which the manufacturing
firm appears to have core competency. For a firm to have core competency in any given area, it is necessary
to have expertise, strategic fit, and ability to invest. The absence of any one or more of these may suggest
that the services of an external provider are appropriate.
If the relationship decision involves a channel partner such as a supplier or customer, the focus is not so
much on whether or not to have a relationship but on what type of relationship will work best. In either case,
the question as to what type of relationship is most appropriate is one that is very important to answer.
Lambert, Ernmelhainz, and Gardner have conducted significant research into the topic of how to determine
whether a partnership is warranted and, if so, what kind of partnership should be considered. Their
partnership model incorporates the identification of “drivers” and “facilitators” of a relationship; it indicates
that for a relationship to have a high likelihood of success, the right drivers and facilitators should be
present.
Drivers are defined as “compelling reasons to partner.” For a supplier relationship management to be
successful, the theory of the model is that all parties “must believe that they will receive significant benefits
in one or more areas and that these benefits would not be possible without a partnership.” Drivers are
strategic factors that may result in a competitive advantage and may help to determine the appropriate type
of business relationship. Although other factors may certainly be considered, the primary drivers include the
following:
 Asset/Cost efficiency.
 Customer service.
 Marketing advantage.
 Profit stability/Growth.
Facilitators are defined as “supportive corporate environmental factors that enhance partnership growth and
development.” As such, they are the factors that, if present, can help to ensure the success of the supplier
relationship management. Included among the main types of facilitators are the following:
 Corporate compatibility.
 Management philosophy and techniques.
 Mutuality of commitment to relationship formation.
 Symmetry on key factors such as relative size, financial strength, and so on.
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In addition, a number of additional factors have been identified as keys to successful relationships. Included
are factors such as exclusivity, shared competitors, physical proximity, prior history of working with a
partner or the partner, and a shared high-value end user.
Step-3 Evaluate Alternatives:
Although the details are not included here, Lambert and his colleagues suggest a method for measuring and
weighting the drivers and facilitators that we have discussed. Then, they discuss a methodology by which
the apparent levels of drivers and facilitators may suggest the most appropriate type of relationship to
consider. If neither the drivers nor the facilitators seem to be present, then the recommendation would be for
the rela¬tionship to be more transactional, or “arm’s length” in nature. Alternatively, when all parties to the
relationship share common drivers, and when the facilitating factors seem to be present, then a more
structured, formal supplier relationship management may be justified.
In addition to utilization of the partnership formation process, it is important to con¬duct a thorough

assessment of the manufacturing company’s needs and priorities in comparison with the capabilities of each
potential partner. This task should be supported with not only the availability of critical measurements and
so on, but also the results of personal interviews and discussions with the most likely potential partners.
Although logistics executives and managers usually have significant involvement in the decision to form
logistics and supply chain relationships, it is frequently advantageous to involve other corporate managers
in the overall selection process. Representatives of marketing, finance, manufacturing, human resources,
and information systems, for example, frequently have valuable perspectives to contribute to the discussion
and analysis. Thus, it is important to ensure a broad representation and involvement of people throughout
the company in the partnership formation and partner selection decisions.
Step-4 Select Partners:
While this stage is of critical concern to the customer, the selection of a logistics or supply chain partner
should be made only following very close consideration of the credentials of the most likely candidates.
Also, it is highly advisable to interact with and get to know the final candidates on a professionally intimate
basis. As was indicated in the discussion of Step 3, a number of executives will likely play key roles in the
supplier relationship management formation process. It is important to achieve consensus on the final
selection decision to create a significant degree of “buy-in” and agreement among those involved. Due to
the strategic significance of the decision to form a logistics or supply chain relationships, it is essential to
ensure that everyone has a consistent understanding of the decision that has been made and a consistent
expectation of what to expect from the firm that has been selected.
Step-5 Structure Operating Model:
The structure of the relationship refers to the activities, processes, and priorities that will be used to build
and sustain the relationship. As suggested by Lambert and his col¬leagues, components “make the
relationship operational and help managers create the benefits of partnering.”5 Components of the operating
model may include the following.
 Planning.
 Joint operating controls.
 Communication.
 Risk/Reward sharing.
 Trust and commitment.
 Contract style.
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 Scope of the relationship.

 Financial investment.
Step-6 Implementation and Continuous Improvement:
Once the decision to form a supplier relationship management has been made and the structural elements of
the relationship identified, it is important to recognize that the most challenging step in the relationship
process has just begun. Depending on the complexity of the new relationship, the overall implementation
process may be relatively short, or it may be extended over a longer period of time. If the situation involves
significant change to and restructuring of the manufacturing firm’s logistics or supply chain network, for
example, full implementation may take longer to accomplish. In a situation where the degree of change is
more modest, the time needed for successful implementation may be abbreviated.
Finally, the future success of the supplier relationship management will be a direct function of the ability of
the involved organizations to achieve both continuous and breakthrough improvement. A number of steps
should be considered in the continuous improvement process. In addition, efforts should be directed to
creating the break¬through, or “paradigm-shifting,” type of improvement that is essential to enhance the
functioning of the relationship and the market positioning of the organizations involved.
Need For Collaborative Supplier Relationship Management:
Whether the supplier relationship management may or may not be with a provider of logistics services,
today’s supply chain relationships are most effective when collaboration occurs among the participants who
are involved. Collaboration may be thought of as a “business practice that encourages individual
organizations to share information and resources for the benefit of all.” According to Dr. Michael Hammer,
collaboration allows companies to leverage each other on an operational basis so that together they perform
better than they did separately.” He continues by suggesting that collaboration becomes a reality when the
power of the Internet facilitates the ability of supply chain participants to read – transact with each other and
to access each other’s information.
While this approach creates a synergistic business environment in which the sum of parts is greater than the
whole, it is not one that comes naturally to most organized particularly those offering similar or competing
products or services. In terms of a example, consider that consumer products manufacturers sometimes go
to great lengths to make sure that their products are not transported from plants to customers’ distribution
centers with products of competing firms. While this part is = have a certain logic, a willingness of the
involved parties to collaborate and share resources can create significant logistical efficiencies. Also, it
makes sense, considering -entailers routinely commingle competing products as they are transported from
distribution centers to retail stores. When organizations refuse to collaborate, real losses may easily
outweigh perceived gains.
The contemporary topic of importance is “collaboration.” Most simply, collaboration occurs when
companies work together for mutual benefit. Since it is difficult to imagine very many logistics or supply
chain improvements that involve only one firm, the need for effective supply chain relationships is obvious.
Collaboration goes well beyond vague expressions of partnership and aligned interests. It means that
companies leverage each other on an operational basis so that together they perform better than they did
separately. It creates a synergistic business environment in which the sum of the parts is greater than the
whole. It is a business practice that requires the following:
 Parties involved to dynamically share and interchange information.

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 Benefits experienced by parties to exceed individual benefits.

 All parties to modify their business practices.
 All parties to conduct business in a new and visibly different way.
 All parties to provide a mechanism and process for collaboration to occur.
Logistics Relationship and It’s Types:
Generally, there are two types of logistics relationships.
Vertical Relationships:
The first is what may be termed vertical relationships; these refer to the traditional linkages between firms
in supply chain such as retailers, distributors, manufacturers, and parts and materials suppliers. These firms
relate to one another in the ways that buyers and sellers do in all industries, and significant attention is
directed toward making sure that these relationships help to achieve individual firm and supply chain
objectives. Logistics service providers are involved on a day-to-day basis as they serve their customers in
this traditional, vertical form of relationship.
Horizontal Relationships:
The second type of logistics relationship is horizontal in nature and includes those business agreements
between firms that have “parallel” or cooperating positions in the logistics process. To be precise, a
horizontal relationship may be thought of as a service agreement between two or more independent logistics
provider firms based on trust, cooperation, shared risk and investments, and following mutually agreeable
goals. Each firm is expected to contribute to the specific logistics services in which it specializes, and each
exercises control of those tasks while striving to integrate its services with those of the other logistics
providers. An example of this may be a transportation firm that finds itself working along with a contract
warehousing firm to satisfy the needs of the same customer. Also, cooperation between a third-party
logistics provider and a firm in the software or information technology business would be an example of
this type of relationship. Thus, these parties have parallel or equal relationships in the logistics process and
likely need to work together in appropriate and useful ways to see that the customer’s logistics objectives
are met.
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4.SERVICE MANAGEMENT
Executive Summary
Managing service quality is of primary importance for organizations that are increasingly
service oriented, and offering a growing range of services to external and internal customers.
Managing service quality requires the capacity to measure service quality, concomitantly
requiring explicit conceptions of ‘service’ and ‘service quality’. This white-paper explores
three keys areas of service and service marketing literature: service definition and
conceptualisation, service classifications, and service quality models, and make the following
observations and proposals.
Proposal 1
While conceptualisation of services has its root in product marketing literature and hence
began as a “non-product” market offering, focusing on characteristics such as Intangibility,
Heterogeneity, Inseparability, and Perishability, contemporary definitions are focusing more
on the interactive nature of services, and stressing more the interactive processes and
capabilities of the service provider on one hand, and the experience, benefits, and notion of
value-in-use to the service consumers on the other hand. We propose that these differing
conceptions be abstracted into a single, related view of service as follows:
“A service is a (market) offering by one party (the provider) to create value for another party
(customer) through interaction in a co-production process (with the consumer)”.
Proposal 2
There are complex and diverse perspectives on the purposes of, domains of, types of, and
participants of services. This complexity will increase as boundaries between products and
services become blurred, the role of ICT in providing and using services increases, the
alternative channels and combinations of channels by which services are delivered multiply,
and as more organisations (including those in traditionally product-based industries) rely on
new and innovative services for revenue and profit growth. This complexity poses a dilemma:
on one hand, the need for a generic service quality model that enables comparison and
parsimonious management of quality of different services continues to increase as
organisations strive to provide more and better services; on the other hand, the complexity
also means that such a generic model may not be possible. If we strive for an abstraction that
is independent of the complexities identified, we will end up with a model that is too
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simplistic. However, if we strive for a detailed measurement model that could cater to all the
possible variations outlined, the model will be too complex for it to be pragmatically useful.
To mitigate the complexity identified, we propose that our scope of research into service
quality be restricted to the consumer experience of business-to-consumer service encounters,
over potentially multiple channels, with the purpose of seeking insights into how we can
improve upon consumers’ satisfaction.
Proposal 3
Based on this scope, and building upon the existing conceptualisations of service quality in
traditional services, electronic services, and multi-channelled services, we propose the
following hierarchical model of service quality:
Environment Outcome
Quality Quality
Interaction
Quality Integration
Quality
Service Quality
This model proposes that the quality of a multi-channel service as perceived by a

consumer or customer comprises perception of four aspects of the service: interaction
quality, which measures the quality of delivery of service by the provider, such as attitude,
expertise, behaviour of employee (if the service involves employee interaction), and perceived
security and service recovery quality (if the service is electronic); environment quality,
which measures the quality of the environment in which the service is delivered, such as the
design of the office or service counter or web site, ambient conditions(non-visual aspects such
as temperature, music, etc), and social factors (which captures such aspects as the number and
types of other people and their behaviour in the environment);outcome quality, which
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measures such aspects as waiting time, tangible evidence of the outcome, and valence which
captures attributes (such as losing money in a casino) that control whether customers
believe the service outcome is good or bad; and integration quality, which measures the
cross-channel quality such as the breadth of channel offerings, transparency of these
offerings, and consistency of content and process across the channels.
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Introduction
Organisations rely increasingly on service differentiation for survival and growth. Even
traditionally product-based organisations are turning to associated services for new sources of
revenue (Allmendinger and Lombreglia, 2005). In this increasingly competitive service
market, service quality has come to be recognised as a strategic source of competitive
advantage; it is thus not surprising there has been extensive research into service quality.
However, the conceptualisation and measurement of service quality continues to be hotly
debated, particularly in the services marketing literature (Brady and Cronin, 2001; Pollack
2009). While there has been considerable progress as to how service quality perceptions
should be measured; there is little agreement on what should be measured (Brady and Cronin,
2001).
Nevertheless, it is recognised, both by the smart services CRC and by the wider community,
that a general conceptualisation of service quality is much needed for both academic and
practical purposes. From the academic perspective, it would provide a common foundation
upon which knowledge regarding services and service quality can be accumulated, compared,
and extended. From the practice perspective, the lack of an agreed service quality model
means various types of services continue to be measured idiosyncratically, on a type-by-type
basis, thereby undermining confidence in each unique approach, impeding comparison of
quality across services, thereby compromising potential for a common quality standard. A
general service quality model could also inform and facilitate the management of service
quality, one of the key enabling disciplines for effective management of business service life
cycles (Rosemann, Fielt, Kohlborn, and Korthaus, 2009) as shown in Figure 1 below.
Figure 1: The Detailed Business Service Management Framework
(Rosemann, Fielt, Kohlborn, and Korthaus, 2009)
Service Supplier Service Customer

Management Service Strategy Management
Management
Service Governance
Service Portfolio ManagementService Capability Management
Service Innovation Service Performance Service Compliance

Management Management & Risk
Service Marketing and Sales
Service Service Service Service Service Ops & Service

Analysis Design Implement Publishing Maintenance Retirement
Service Purchasing
Service Quality Management
Service Master Data Management
Service Technology Management

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This white paper begins to address the suggested gap, by first exploring the extant literature to
understand the complexities impeding derivation of such a generic service quality model, and
subsequently by suggesting a means of containing this complexity in order to enable us to
propose a sufficiently general model of service quality. As the following discussion reveals,
due to a lack of a unifying theory, the main difficulties stem from the different
perspectives, purposes, participants, types, channels of delivery, and/or characteristics of
services that underlie the various reported research. This white paper proposes that, to meet
the needs of Smart Services CRC, we focus on the perception of the quality of multi-
channelled services from a consumer’s perspective (with the underlying aim of improving
consumers’ satisfaction).
The remainder of the paper proceeds as follows. The exploration begins with review of the
literature on service definitions and conceptualisations. The review of service definitions
highlights the different views defined by various perspectives and purposes, implicit and
explicit, as embraced by the different researchers. Based on observations from the literature,
and adopting recommendations made in more recent research, we next define the scope of our
conceptualisation and attempt to arrive at a broad definition of a service that represents an
integrated synthesis of these differing views. We then review literature on service
classifications. The initial purpose of this review was to identify any existing, generic
classification or ontology, that suggests possible core attributes of a general conceptualisation
of service. We found, however, that just as there are myriad conceptualisations of services
based on different perspectives and purposes, there are too a diversity of classifications that
are based on different attributes of services. This paper selectively presents those more
widely adopted classifications that highlight the complexities associated with any attempt to
synthesize an all-purpose service definition and model. Review of service quality literature
further reveals the richness and variety of models that have been developed to account for
different service industries (retail, healthcare, banking etc), types of services (traditional,
electronic, multi-channelled), and types of participants (business-to-business, consumer-to-
business, consumer-to-consumer, etc). Using our proposed service definition as the scope of
our service quality model, we propose an integrated service quality model. Finally, we
conclude by highlighting the recommendations from this research and a proposed research
agenda.
Service Definitions
In this section we discuss the definition of ‘service’, drawing mainly from the services
marketing and operations literature, wherein service conceptualisation has received much
attention (see Table 1 for representative samples). While service is also the object of research
in many other disciplines, such as economics, management, engineering, information systems,
and software engineering, to name a few, our review focus on these two disciplines as they
have had a longer history in establishing general conceptualisations of service that are often
technology-agnostics, a key defining characteristic of business services within the business
service management research agenda of this work package.
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Service Marketing research has a long tradition. A ground-breaking article by Shostack

(1977) argues that Service Marketing is an uncharted frontier, requiring new concepts to
succeed. In particular she argues that “it is wrong to imply that services are just like products
‘except’ for intangibility” (Shostack, 1977, p.73). Shostack introduces a ‘molecular model’ to
postulate that total market entities (or offerings) consist of ‘combinations of discrete elements
which are linked together in molecule-like wholes.’ This enables the definition of a market
entity that can be partly tangible and partly intangible and does not neglect either aspect. It
makes it possible to describe an array of market entities along a continuum from tangible to
intangible being dominant. ‘The greater the weight of intangible elements in a market entity,
the greater will be the divergence from product marketing in priorities and approach.’
Service as “Not-product” market offering
In the early days there was a strong need to differentiate services from products; to argue the
need for Service Marketing as a separate discipline with its own body of knowledge. Early
attempts to define the nature of the service act, seem to be either definitions by exclusion or
by illustrative lists (Judd, 1964). Judd defined ‘marketed services’ saying: ‘Pending the
development of a positive definition, some progress can be made by returning to the principle
of definition by exclusion. Such a definition, limited to marketed services, is: “A market
transaction by an enterprise or entrepreneur where the object of the market transaction is other
than the transfer of ownership (and title, if any) of a tangible commodity.”’(Judd, 1964: 59)
This resulted in a relentless pursuit of the characteristics that differentiate services from
products. The most cited such service characteristics are Intangibility, Heterogeneity (or non-
standardisation), Inseparability (of production and consumption), and Perishability (or
exclusion from inventory) (Zeithaml, Parasuraman, & Berry, 1985), often referred to as IHIP.
Of these characteristics, intangibility is often considered the most prominent, denoting that
services are activities and not physical objects. However, Lovelock and Gummesson (2004)
argue that intangibility is an ambiguous and limited concept, and that many services are
directed at achieving tangible changes in customers themselves or their possessions.
The IHIP characteristics are often criticised because they are based upon what a service is not.
The IHIP characteristics are often seen as a contra-view of service (e.g. as non-goods), overly
emphasizing the view of the provider (Vargo & Lusch, 2004), and does not capture the
essence of services; in particular their process and interactive nature (Edvardsson, Gustafsson,
& Roos, 2005). Vargo and Lusch warn that such a perspective may point service management
in the wrong direction, i.e. to make service provision more good-like. Moreover, Vargo and
Lusch argue that many of these characteristics apply equally to goods as they do to services
(e.g. the intangible benefits of goods can be more important than their tangible attributes) and
can be used to make goods production more service-like. Edvardsson et al. (2005) suggest the
need to differentiate those services for which each of the IHIP characteristics are relevant and
situations where they are useful and fruitful. Broadly, instead of drawing a distinction
between goods and services, it makes more sense to see the goods and services as the
extremes of a goods-services continuum, as already suggested by Shostack (1977).
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Service as Processes
Subsequent to IHIP, many new definitions that emphasise services as processes, and
addressing the interactions between provider and customer and the role of the customer as co-
producer appear. Grönroos (2006) defines service as ‘a process consisting of a series of more
or less intangible activities, that normally, but not necessarily, take place in interactions
between the customer and service employees and/or physical resources or goods and/or
systems of the service provider, which are provided as solutions to customer problems.’
According to Grönroos (2006, p.319) ‘services emerge in “open” processes where
customers participate as co-producers and hence can be directly influenced by the progress of
these processes;’ while, traditionally, ‘physical goods are produced in “closed” production
processes where the customer only perceives the goods as outcomes of the process.’
This means that the consumption and production of services are at least partly simultaneous
processes and that the customer at least partly enters the production sphere, and the service
provider at least partly enters the consumption sphere (Grönroos, 2006). This perspective on
service is not only wide-spread in Service Marketing; it is also the dominant perspective in
Service Operations literature. Teboul (2006) differentiates between processes in the front-
stage (service) where the interaction with the customer takes place, and processes in the back-
stage (production). An organization is more a service organization when the relative share of
the processes in the front-stage compared to the back- stage increases. A slightly different
perspective comes from Sampson and Froehle (2006), who emphasize the role of customer
inputs by stating that customers act as suppliers in a service production process. They see this
as different from other forms of customer involvement such as selecting and consuming the
output.
Services as Benefits
In the Grönroos (2006) definition of service, in addition to emphasizing the process, Grönroos
also states that services are provided as solutions to customer problems; a value-generating
service provides a solution to customer problems, irrespective of whether this solution is
based on a physical product or not. Similarly, Johnston & Clark (2005) state that, from the
customers’ perspective, service is the combination of the customers’ direct experience of the
service process and their perception of the outcome of the service, i.e. the result of service
delivery to the customer. These views address service as solutions, outcomes, benefits or
value for the customer. Grönroos (2006) suggests a good enough core solution (a physical
product, a service, or a combination of goods and services) is necessary to compete in the
marketplace, but is not sufficient for a competitive advantage. This requires an enhanced
offering consisting of physical product components, service components, information,
personal attention and other elements of customer relationships. Grönroos labels this
combination a ‘service offering’, even when the core solution is based on a physical product,
because all elements of the offering are combined to provide a value-generating service for
customers. Lusch and Vargo (2006) also refer in their definition to services being for ‘the
benefit of another entity or the entity providing the service itself’. Moreover, they state that
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what matters is value-in-use or value created (and determined) at the moment of consumption,
not value-in-exchange or value added to goods during the production process. Another benefit
perspective is provided by Lovelock and Gummesson (2004), who present services as
‘offering benefits through access or temporary possession rather than ownership, with
payments taking the form of rentals or access fees.’
Services as Resources/Capabilities
The ‘service as benefit’ perspective, discussed above, however, also implies that rather than
exchanging products for products, actors exchange capabilities for capabilities (Vargo &
Lusch, 2004). They stress the role of operant resources, i.e. resources employed to act on
operand resources (and other operant resources) to produce effects, as opposed to operand
resources, i.e. resources on which an operation or act is performed to produce an effect. They
consider knowledge and skills as the ultimate operant resource. Related to this, Grönroos
(2006, p.324) states that service is ‘a process where a set of resources interact with each
other and with the customer aiming at supporting the customer’s processes in a value-
creating way.’ He stresses that services are value-supporting processes, unlike goods that are
value-supporting resources. This has relevance to views on selecting and deploying resources
in strategic management, as discussed in the resource-based view and the dynamic capabilities
approach (e.g. Makadok, 2001). Services as the process of using one’s resources for the
benefit of another entity or the entity itself, is the basis of the ‘Service-Dominant Logic’ of
Vargo and Lusch (2004), who argue that organizations, markets, and society are
fundamentally concerned with exchange of service. This implies that all firms are service
firms; all markets are centred on the exchange of services, and all economies and societies are
service based.
Service as Perspective
While Service Marketing literature has become increasingly prominent and voluminous, as
evident from the preceding discussion, the research community has yet to achieve consensus
on what ‘service’ means. It may transpire that the search for a generally accepted definition is
to no avail. An extensive literature review by Edvardsson et al. (2005) suggests that service
definitions are too narrow, and that cited characteristics are outdated as generic service
characteristics. They conclude that at a general level, a service is better conceived as a
‘perspective’ on value creation, rather than a category of market offerings. They further
suggest, that at lower levels of abstraction (or detail or specificity), a generic service
definition is not possible, as these more specific conceptions are by definition more specific to
a particular provider, a particular time, the particular service itself, and a particular
perspective. Edvardsson et al. (2005) consider why definitions refer to either ‘services’
(plural) or ‘service’ (singular), and suggest that these have different meanings depending on
whether ‘we view the definitions as an objective way of portraying services or as a way of
constructing them in terms of value-creation.’ On the one hand, ‘services’ are seen as
activities that are the object of exchange relating to something that can be offered to the
customer. On the other hand, ‘service’ can be perceived as a perspective on value creation
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relating to the performance of the whole organization providing the customer with a good
experience and outcome.
Conclusion
In this section we discussed different service definitions and their elements. Contemporary
definitions seem to be moving away from the market offering definition and IHIP
characteristics to the interactive nature of services, and stressing more the interactive
processes and capabilities of the service provider on one hand, and the experience, benefits,
and notion of value-in-use to the service consumers on the other hand. Based on the above
observations, we propose that the differing conceptions be abstracted into a single, related
view of service integrating the perspective of service as a marketing offering, interactions,
processes, capabilities, and benefits, as follows:
A service is a (market) offering by one party (the provider) to create value for another party
(customer) through interaction in a co-production process (with the consumer).
Figure 2: Proposed Service Conceptualisation
Consumer:
Value creation, interaction, experience, outcome
A Market Offering
Provider:
Processes, activities, capabilities
It is important to note that embodied within this definition is two perspectives of service:
service is both (1) an offering, or a service concept, that specifies what is being offered to a
potential customer,
e.g. a banking service, a customer service at department store, etc; and (2) an encounter, or
what happens, when service (provider) and consumer interacts, e.g. when a consumer makes a
withdrawal at a bank or funds transfer through internet banking, or when a consumer returns
an item at a department store. The first perspective, which will impact upon the purchase or
engagement intention of the customer, embodies the potential value and benefit from a
(potential) customer’s point of view, and the processes, activities, and the capabilities put in
place by a provider to deliver that value or benefit. The second perspective, which has impact
upon the re-purchase or re-engagement intention of the consumers, embodies the co-
production interaction that bring the provider’s capabilities to bear, and put the processes and
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activities in action to provide an experience and an outcome that delivers value and provides
satisfaction to the consumer of the service.
The first perspective has clear implications for other research within the business service
management framework, particularly the service life-cycle management, service marketing
and sales, service purchasing, and parts of service value management (such as service
portfolio management and service innovation management) while the second perspective is
important for research such as service quality management and service performance
management.
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Table 1: Salient Service Definitions from Service Marketing and Service Operations
SOURCE DEFINITION
SERVICE MARKETING
Zeithaml, Bitner & Gremler Services are deeds, processes, and performances provided or coproduced by one entity or
(2009) person for another entity or person.
Grönroos (2000, p.46) A service is a process consisting of a series of more or less intangible activities, that normally,
but not necessarily, take place in interactions between the customer and service employees
and/or physical resources or goods and/or systems of the service provider, which are
provided as solutions to customer problems.
Lovelock & Wirtz Services are economic activities offered by one party to another, most commonly employing
(2007, p.15) time-based performances to bring about desired results in recipients themselves or in objects
or other assets for which purchasers have responsibility. In exchange for their money, time,
and effort, service customers expect to obtain value from access to goods, labor,
professional skills, facilities, networks, and systems; but they do not normally take
ownership of any of the physical elements involved.
Vargo & Lusch (2004) Service [is] the application of specialized competences (knowledge and skills), through deeds,
processes, and performances for the benefit of another entity or the entity itself.
Lusch & Vargo (2006)
SERVICE OPERATIONS
Johnston & Clark (2005) From the customers’ perspective, service is the combination of the customers’ experience and
their perception of the outcome of the service. (OR Service is the combination of outcomes
and experiences delivered to and receive by a customer.)
The service experience is the customers’ direct experience of the service process and concerns
the way the customer is dealt with by the service provider. The service outcome is the
result for the customer of service delivery.
Fitzsimmons & Fitzsimmons A service is a time-perishable, intangible experience performed for a customer acting in the
(2006, p.4) role of a co-producer.
Teboul (2006) Service is front stage. Delivering a service involves a contract, an interaction between the
service provider and the customer. Customers are an integral part of the service delivery
as they are “transformed” or simply interact during the transaction.
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6. BUSINESS PROCESS MANAGEMENT
Introduction
Business process management (BPM) is one of the most existing topics in information, because it addresses
the interplay of people and organizations on the one hand, and “process aware software” on the other hand
(van der Aalst et al., 2000, 2003b). Particularly interesting are generic tools like workflow management
products to support the creation of business process systems. The definition of a business process
management system I prefer, is: a generic software system that is driven by explicit process designs to enact
and manage operational business processes (van der Aalst et al., 2003a). The system should be process-
aware and generic in the sense that it is possible to modify the processes it supports. The process designs are
often graphical and the focus is on structured processes that need to handle many cases.
To show the relevance of business process management systems, it is interesting to put them in a historical
perspective. Consider Figure 1, which shows some of the ongoing trends in information systems (van der
Aalst, 2002; van der Aalst et al., 2003a). This figure shows that current information systems consist of a
number of layers. The center is formed by the operating system, i.e. the software that makes the hardware
work. The second layer consists of generic applications that can be used in a wide range of enterprises.
Moreover, these applications are typically used within multiple departments within the same enterprise.
Examples of such generic applications are a database management system, a text editor, and a spreadsheet
program. The third layer consists of domain specific applications. These applications are only used within
specific types of enterprises and departments. Examples are decision support systems for vehicle routing,
call center software, and human resource management software. The fourth layer consists of tailor-made
applications. These applications are developed for specific organizations.
Figure 1 Trends relevant for business process management (van

der Aalst, 2002)
In 1960s, the second and third layers were missing. Information systems were built on top of a small
operating system with limited functionality. Since no generic or domain specific software was available,
these systems mainly consisted of tailor-made applications. Since then, the second and third layers have
developed and the ongoing trend is that the four circles are increasing in size, i.e. they are moving to the
outside while absorbing new functionality. Current operating systems offer much more functionality.
Database management systems that reside in the second layer offer functionality which used to be in tailor-
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made applications. As a result of this trend, the emphasis shifted from programming to assembling of
complex software systems. The challenge no longer is the coding of individual modules, but orchestrating
and gluing together pieces of software from each of the four layers.
Another trend is the shift from data to processes. The 1970s and 1980s were dominated by data-driven
approaches. The focus of information technology was on storing and retrieving information and, as a result,
data modeling was the starting point for building an information system. The modeling of business
processes was often neglected and processes had to adapt to information technology. Management trends
such as business process re-engineering illustrate the increased emphasis on processes. As a result, system
engineers are resorting to a more process driven approach.
The last trend we would like to mention is the shift from carefully planned designs to redesign and organic
growth. Due to the omnipresence of the Internet and its standards, information systems change on-the-fly.
As a result, fewer systems are built from scratch. In many cases, existing applications are partly used in the
new system. Although component-based software development still has its problems, the goal is clear and it
is easy to see that software development has become more dynamic.
The trends shown in Figure 1 provide a historical context for BPM systems. BPM systems are either
separate applications residing in the second layer or are integrated components in the domain specific
applications, i.e. the third layer. Notable examples of business process management systems residing in the
second layer are workflow management systems (van der Aalst and van Hee, 2002; Jablonski and Bussler,
1996; Lawrence, 1997; Leymann and Roller, 1999; Marinescu, 2002) such as Staffware, MQSeries, and
COSA, and case handling systems such as FLOWer. Note that leading enterprise resource planning systems
populating the third layer also offer a workflow management module. The workflow engines of SAP, Baan,
PeopleSoft, Oracle, and JD Edwards can be considered as integrated BPM systems. The idea to isolate the
management of business processes in a separate component is consistent with the three trends identified.
BPM systems can be used to avoid hard-coding the work processes into tailor-made applications and thus
support the shift from programming to assembling. Moreover, process orientation, re-design, and organic
growth are supported. For example, the current workflow management systems can be used to integrate
existing applications and support process change by merely changing the workflow diagram. Isolating the
management of business processes in a separate component is also consistent with recent developments in
the domain of Web services: Web services composition languages such as BPEL4WS, BPML, WSCI,
XLANG, and WSFL can be used to glue services defined using WSDL together.
2. Business process management demystified
Many people consider BPM to be the “next step” after the workflow wave of the 1990s. Therefore, we use
workflow terminology to define BPM. The Workflow Management Coalition (WfMC) defines workflow as:
“The automation of a business process, in whole or part, during which documents, information or tasks are
passed from one participant to another for action, according to a set of procedural rules” (Lawrence,
1997). A workflow management system (WFMS) is defined as: “A system that defines, creates and
manages the execution of workflows through the use of software, running on one or more workflow
engines, which is able to interpret the process definition, interact with workflow participants and, where
required, invoke the use of IT tools and applications” (Lawrence, 1997). Note that both definitions
emphasize the focus on enactment, i.e. the use of software to support the execution of operational processes.
In the last couple of years, many researchers and practitioners started to realize that the traditional focus on
enactment is too restrictive. As a result, new terms like BPM have been coined. There exist many
definitions of BPM but in most cases it clearly includes workflow management (WFM). We define BPM as
follows: supporting business processes using methods, techniques, and software to design, enact, control,
and analyze operational processes involving humans, organizations, applications, documents and other
sources of information. Note that this definition restricts BPM to operational processes, i.e. processes at the
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strategic level or processes that cannot be made explicit are excluded. Note that systems supporting BPM
need to be “process aware”, i.e. without information about the operational processes at hand little support is
possible.
Figure 2 shows the relationship between WFM and BPM using the BPM life cyle. The BPM life cyle
describes the various phases in support of operational business processes. In the design phase, the processes
are (re)designed. In the configuration phase, designs are implemented by configuring a process aware
information system (e.g. a WFMS). After configuration, the enactment phase starts where the operational
business processes are executed using the system configured. In the diagnosis phase, the operational
processes are analyzed to identify problems and to find things that can be improved. The focus of traditional
WFM (systems) is on the lower-half of the BPM life cyle. As a result, there is little support for the diagnosis
phase. Moreover, support in the design phase is limited to providing an editor and analysis and real design
support are missing. It is remarkable that few WFM systems support simulation, verification, and validation
of process designs. It is also remarkable that few systems support the collection and interpretation of real-
time data. Note that most WFM systems log data on cases and tasks executed. However, to support any
form of diagnosis, no tools are offered by the traditional systems.
Figure 2 The BPM life cycle to compare WFM and BPM
Currently, many workflow vendors are positioning their systems as BPM systems. Gartner expects the BPM
market to grow and also identifies business process analysis (BPA) as an important aspect (Gartner,
2002). It is expected that the BPA market will continue to grow. Note that BPA covers aspects neglected by
traditional workflow products (e.g. diagnosis, simulation, etc.). Business activity monitoring (BAM) is one
of the emerging areas in BPA. The goal of BAM tools is to use data logged by the information system to
diagnose the operational processes. An example is the “ARIS process performance manager” (PPM) of IDS
Scheer (2002). ARIS PPM extracts information from audit trails (i.e. information logged during the
execution of cases) and displays this information in a graphical way (e.g. flow times, bottlenecks,
utilization, etc.). BAM also includes process mining, i.e. extracting process models from logs (van der
Aalst et al., 2003). BAM creates a number of scientific and practical challenges (e.g. which processes can
be discovered and how much data are needed to provide useful information).
When it comes to redesigning operational processes two trends can be identified: straight through
processing (STP) and case handling (CH). STP refers to the complete automation of a business process, i.e.
handling cases without human involvement. STP is often only possible if the process is redesigned.
Moreover, STP is often only possible for a selected set of cases. The latter means that cases are split into
two groups:
Cases that can be handled automatically (in Dutch these cases are called “Gladde gevallen”).
Cases that require human involvement.
By separating both groups it is often possible to reduce flow time and cut costs. While STP strives for more
automation, CH addresses the problem that many processes are much too variable or too complex to capture
in a process diagram (van der Aalst and Berens, 2001). In CH, the normal route of a case is modeled, but at
the same time other routes are allowed if not explicitly excluded. One way to do this is to make workflows
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data-driven rather than process-driven and allow for authorizations to skip or undo activities. Also the focus
is on the case as a whole rather than on individual work-items distributed over work-lists.
3. Conclusion
To summarize, BPM extends the traditional WFM approach by support for the diagnosis phase (cf. BPA
and BAM software) and allowing for new ways to support operational processes (cf. CH and STP). This
poses many scientific and practical problems. However, it is important to realize that in the 1970s, people
like Ellis (1979), Holt (1985) and Zisman (1977) already worked on so-called office information systems
(van der Aalst, 2002; van der Aalst et al., 2003a). These systems, just like the BPM systems developed
today, were also driven by explicit process models. Therefore, it is important to learn from the past and
avoid putting old wines in new (trendy) bottles. Only by this way will BPM become a mature technology.
NIM: A012211108
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NAME: ISRAA NATIQ JABBAR

2. Characteristics features of production system?

3. Define production management:

4. What are the difference between production management and operation

5. What are the functions of production mgmt?

7. Difference between job or unit production and batch production:

Job Pdn Batch Pdn

8. What are the characteristics of batch productions?

10. Job production

11. Characteristics of job production:

12. What is meant continuous / mass production?

13. Advantages of mass production:

14. Define Flexible manufacturing system (F M S)

15. Characteristics of FMS

16. What are the classification of production based on type of production

17. What is meant by make to stock?

18. Make to order?

19. Assemble to order?

20. Interration between production and marketing?

21. Interrelation between production and Finance

22. Interrelation between production per and personnel

2.Purchasing Management and Supplier Relations,

What is the Role/Function of Purchasing in a Company?

There are several roles/purchasing functions in a company, including the following:

1. The most important function in a company

2. An Important Part Of The Production Process

2. Responsible Purchasing Management for Outside Manufacturing

5. Part of Corporate Strategy

Steps in Making a Purchase

3.Supply Chain Relationships and Supplier Relationship Management:

Relationship Management is defined as the strategy employed by an organization in which a continuous

Supplier Relationship Management – A Perspective:

Supply Chain Relationships – In General:

Model For Developing And Implementing Successful Supply Chain Relationships:

Step-1 Perform Strategic Assessment:

Step-2 Decision to Form Relationship:

Step-3 Evaluate Alternatives:

In addition to utilization of the partnership formation process, it is important to con¬duct a thorough

Step-4 Select Partners:

Step-5 Structure Operating Model:

 Scope of the relationship.

Step-6 Implementation and Continuous Improvement:

Need For Collaborative Supplier Relationship Management:

 Parties involved to dynamically share and interchange information.

 Benefits experienced by parties to exceed individual benefits.

Logistics Relationship and It’s Types:

Generally, there are two types of logistics relationships.

This model proposes that the quality of a multi-channel service as perceived by a

Service Supplier Service Customer

Service Portfolio ManagementService Capability Management

Service Innovation Service Performance Service Compliance

Service Marketing and Sales

Service Service Service Service Service Ops & Service

Service Quality Management

Service Master Data Management

Service Technology Management

Service Marketing research has a long tradition. A ground-breaking article by Shostack

Service as “Not-product” market offering

Figure 2: Proposed Service Conceptualisation

6. BUSINESS PROCESS MANAGEMENT

Figure 1 Trends relevant for business process management (van

2. Business process management demystified

Figure 2 The BPM life cycle to compare WFM and BPM