PRODUCT CHAIN ​​OPERATIONS CENTER – AN APPLICATION OF SUPPLY CHAIN ​​MANAGEMENT

The concept of Supply Chain Management brought a vision of complexity and integration to product chains1, which can be fully observed considering: supply chains, production plants and distribution networks. Complete chains generate greater complexity in the flow of information and bring the need for better decision models.

In parallel, the current development of information technology allows the management of all agents in the product chain. Supervisory systems and monitoring centers are used to ensure a continuous and reliable flow of information from the chain, as well as agility in decision-making.

Currently, the continuous increase in the level of complexity in product chains generates uncertainties regarding the efficiency of companies in the operation of these chains and the continuous improvement of their processes. It is questioned, then, if only the use of supervisory systems and monitoring centers is enough for this new level of operation.

HISTORIC

Since the industrial revolution and the advent of serial production, efforts have been made to systematize the description of processes through flowcharts, indicators and other techniques, in order to achieve the desired results. This systematization was accompanied by the creation of controls that allowed the observation of the results and, in a second moment, the detection of events that influenced these results. Companies from different sectors, such as chemical, steel, metallurgical and automotive, among others, used and developed techniques for planning and controlling their processes.

Initially, the control rooms were made up of large panels with instruments and lamps for presenting information, introducing the concept of process integration. Control was divided between monitoring carried out in the rooms and acting on the process locally with the equipment, through manually operated buttons and levers.

Accompanying the development of technology, the equipment was modernized and the control rooms, too. Supervision of processes is no longer carried out via a panel and manual actuators. Computers incorporated these functions, arranging data NUMA more organized graphic interface, allowing the monitoring and remote control of the process, in addition to enabling the storage and analysis of the acquired data. In the mid-1980s, with the growth of the industry, the first SCADA (Supervisory Control and Data Acquisition) systems for controlling production processes appeared on the market.

Figure 1 - Functioning of the SCADA system

As the complexity of processes grows, so does the number of sensors, actuators, command devices, monitoring devices and, consequently, the number of parameters and events that the operator needs to interpret. At this time, decision support programs are introduced, which are now integrated into conventional SCADA. As a result, the degree of automation of production processes in industry increases.

At the same time, the development of monitoring centers takes place, which incorporate SCADA concepts from production systems and apply them to logistics systems. The monitoring centers control the vehicles, coordinating the supply and distribution of materials. One direct application is TMS (Transportation Management System) systems. It is a set of software that assists in carrying out activities related to cargo scheduling, document issuance, fleet and product traceability, freight auditing, route planning, cost monitoring and service level (Marques, Vitor ).

Figure 2 - Operation of the TMS system

In this way, at the end of the 90s, there were systems that obtained good results in the control of production processes and logistical processes. However, these systems operated autonomously and generated management information that was analyzed at the tactical and strategic levels for decision making. Therefore, efforts were made to integrate these processes through operation centers.

Figure 3 - Evolution of process control through Centers

PRODUCT CHAIN ​​OPERATION CENTER (COP)

Concept. With the possibility of controlling all the steps that make up the product chain, and appropriating the concept of Supply Chain Management (SCM), systems naturally emerged that sought complete integration of the product chain. On the other hand, the increasingly complex operating scenarios, with more agents inserted in the links of the chain, brought the adequate justification to enable the creation of operation centers, always aiming to achieve better performance with decreasing costs.

Supply Chain Management encompasses all activities related to the flow and transformation of goods from the raw material stage (extraction) to the end user, as well as the respective information flows. Materials and information flow both up and down the product chain (Ballou, Ronald, 2004).

In this sense, the product chain operation center (COP) can be defined as a system that appropriates information from the production process and the logistics process and that combines parameters and events that direct decisions towards the global optimum of the chain. , regardless of the local greats. The operation center for the chain has clear characteristics that distinguish it, such as:

• It operates at three levels: operational, tactical and strategic;
• Controls the production and logistics processes of the product chain;
• It establishes a decision model where the links in the product chain are integrated.

Figure 4 - Operation Center for the Product Chain (COP)

When controlling integrated processes, management is expected to be carried out through a planning, execution and control cycle (PDCA). This cycle will feed solutions that will be applied to the different links in the chain at the operational, tactical and strategic levels. Operational decisions will be focused on correcting events that affect the short-term planning of the chain, in one or more processes. At the tactical level, action is expected on repetitive events with structural causes in the process, which will lead to medium-term solutions involving the performance of the links in the chain, meeting demand and investments. To act at the strategic level, managers will be evaluating the composition of the product chain itself, through the inclusion and replacement of complete production or logistics processes.

The COP must use decision support systems that propose alternatives for optimizing the overall result of the chain, considering the integration of the various production and logistics processes. This decision model should allow for aggregate calculations of cost and delivery time, in addition to the expectation of the final quality of the product. Generated scenarios must be analyzed by an operation group capable of assessing the criticality of events and impacts on the entire chain.

Implementation. The implementation of COPs requires companies to have a high degree of planning and control of processes in their product chain. This is an initial condition for seeking integration through a COP. Once this condition is satisfied, there are three critical factors in the implementation:

• Information and technology architecture;
• Selection and qualification of people for the operation;
• Organizational structure.

Figure 5 – Critical factors for the implementation of the COP

Information architecture planning will be carried out based on the structure of the product chain itself. Once the processes that make up the chain and their relationships have been defined, it is necessary to determine which parameters and events will be used in the COP, with “parameters” being those values ​​necessary for calculating results and scenarios, and “events” being those occurrences that generate an impact over the entire chain. A methodology for defining this information is based on matrices that assess severity, tendency and degree of tolerance.

The information architecture is also subject to technological challenges: the integration of systems that do not have common data standards and the quality of the extracted data. Systems integration is addressed through interface solutions with appropriate communication standards for sending data to information management systems at the COP. In the case of information quality, there are two main points: the appropriation of different values ​​for the same parameter in different systems and the transparency of the criteria for generating values ​​and events. The solution to these points involves the design of the information matrix itself, that is, the selection of data and sources to be used in the COP.

The selection and training of people who will operate the COP must have as criteria: technical knowledge of the product chain, knowledge in process management (planning, execution and control), and the ability to work in groups. The qualification should be aimed at forming a team that can manage the complete chain, knowing the integrated processes, instead of trying to add the knowledge of specialists in each of the processes. This qualification can be leveraged with the participation of the future operators team in planning the information architecture.

The organizational structure at the COP should feature the use of horizontal groups to allow for agility in communication and the sharing of decisions and responsibilities. Within the structure, the following groups should be foreseen:

• Operation, which will deal with the monitored parameters and events and will be responsible for corrective actions in the processes. This group has a direct interface with the managers of the processes that make up the product chain;
• Operational planning, which will interpret performance, quality and meeting demand through management data, in order to carry out structural actions on the chain. This group interfaces with areas such as purchasing, sales, marketing and finance, through structured S&OP (Sales and Operations Planning) processes, in addition to the operation itself. It is important to emphasize that, in the composition of this group, the people who will update the structure of the COP, due to improvements in the processes that make up the product chain;
• Strategic planning, which will seek alternatives among the components of the product chain to meet the company's strategy. The interface of this group is clear with the top management decision levels.
• For the implementation of the COP to be facilitated, a stage of educating people for change should be foreseen, which should not be underestimated. The integration of the various chain processes will influence the creation of a new trait in the company's culture. The development of this new culture must begin before implementation and its consolidation will occur during the stabilization process of the COP operation.

Figure 6 – Organizational structure of the COP

Benefits. With the concept of integrated control of the product chain, the COP brings benefits to the various agents in the chain. With immediate actions on events occurring during process monitoring, it is possible to visualize gains in service level and productivity in the short term. From this perspective, it is also possible to mitigate or even avoid accidents with on-time monitoring.

Through the COP, there is greater visibility of the entire operation, which allows, through broader analyses, the identification of bottlenecks and procedural problems. With tactical and strategic planning, these analyzes become inputs for a review of processes and activities that bring significant improvements to the operation. With this identification of possible points of improvement by acting on processes instead of events, it is possible to minimize operational times and, consequently, reduce costs for the company.

Figure 7 - Benefits provided by the COP

CONCLUSION

The complexity of operations and the application of SCM concepts made the Product Chain Operations Center (COP) model quite attractive; however, the difficulty of implementing these centers ends up generating partial solutions, with partial results as well. The most adequate decision for the construction of this model in the company is to carry out a phased implementation, seeking the use of SCADA systems and monitoring centers as a preparation for the gradual integration of the processes in the COP. The maturity of this model involves the development of people and technology within companies, effectively becoming a process of cultural change.

BIBLIOGRAPHIC REFERENCES

BALLOU, RONALD H. Supply Chain Management/Enterprise Logistics. 5th ed. Porto Alegre: Bookman, p. 28, 2004.

FLEURY, AFONSO CC; FLEURY, MARIA TEREZA LEME. Competitive strategies and essential competences: prospects for the internationalization of industry in Brazil. Management & Production, v.10, nº 2, pp. 129-144, Aug. 2003.

GOHN, MAURITIUS. SCADA-Supervisory system. The importance of Information Technology in Integrated Logistics. Estácio de Sá University, September 2006.

JUNIOR, ARMANDO NCM; DE MOURA, DANIELLE COSTA; RODRIGUEZ, CARLOS TABOADA. Organizational Structure and Control of Logistics Operations. Federal University of Santa Catarina. 1998

MARQUES, VITOR .Using the TMS (Transportation Management System) for effective transport management. COPPEAD/Center for Studies in Logistics, April 2002.

ZAMPRONHA, ROGÉRIO. The evolution of supervisory systems. Available in: http://www.softbrasil.com.br/site/novidade/artigos/117/, accessed in March 2011.

Authors: Marcus Vinicius Esperian D'Elia and Paula Evaristo Arantes