Definition

Traditional Electronic Data Interchange (EDI) and Just In Time (JIT) inventory management have merged with the focus on Internet Global e-Business to produce a new business process model: Electronic Business Flow Management (EBFM). This new business process model utilizes the traditional EDI infrastructure to form the foundation mechanism for electronic information flow that now feeds the Always On Time (AOT) inventory model. JIT is no longer sufficient, having been developed as an inventory reduction method; it has produced critical inventory shortages, which have been introduced into the process flow model by supply disruptions (strikes, inclement weather, wars, etc.). AOT represents a mechanism to insure that supplies (for manufacturing, distribution, and sales) are always available. This is accomplished by sophisticated inventory forecasting models, which in turn are fed constant information on supply availability and delivery schedules through EDI interfaces (both traditional EDI and the new Internet Global e-Business engines).

Building on previous supply chain models like KANBAN and other integrated Just In Time (JIT) systems , EBFM provides an automated approach to address the 'pull/flow' supply chain. This creation of the new EBFM business process model is inclusive of alternate supply sources that are dynamically balanced through the inventory and distribution control systems of an organization. This constant information flow from a multitude of sources provides the ability to create an AOT (Always On Time) inventory model. Supply outages, forecast with information from the EDI engines, will be pre-empted by rapid and automatic re-direction to supply alternates. This forecasted supply outage will trigger sophisticated inventory supply engines driven by the EBFM business model to generate additional EDI transactions that will alter existing purchase orders or transportation mechanisms (i.e. placement of an ocean cargo on the next Boeing 747 out of Hong Kong). This process will enable a smooth and consistent performance of both the service and hard goods business cycle from raw materials through manufacturing to final consumptive delivery.

While still in its formative states, the EBFM model will enable the Global e-Business community to meet the constant and changing demand of the supply and demand cycle. On-going developments in high-technology hardware has provided the basis for sophisticated computer software engines that are capable of managing what will be enormous volumes of data. This constant flow of data will then be converted into manageable information, from which the EBFM model will be managed.  

At the heart of Electronic Business Flow Management (EBFM) is Electronic Transaction Flow Management (ETFM) and the associated business rules that govern its use.  ETFM is best described as the physical representation of a business transaction as defined by its data elements and their interrelationship to the overall business process model.

Business managers utilizing EBFM  and ETFM will have a tremendous advantage over those competing companies who will still rely on the old JIT inventory model and traditional business process management models. Usable and dynamic information from the EBFM model will provide instantaneous decision criteria for the demanding business decisions that sophisticated business managers have to make. This constant information flow to the management team of the organization will ensure the fast response that today’s business cycles require. It is not only the best product that makes the sale, but the availability of that product when, where and delivered as the customer wishes.  

Recommendation

It is imperative that every business organization completely understand and has documented its business process model and the related Electronic Transaction Flow Management process.  Regardless of current legislative issues (i.e. Sarbanes-Oxley Act of 2002), embracing the concept of Electronic Business Flow Management can lead to better organization and ultimately increased profit to the company.  The EBFM model with its inherent ETFM functional model can help communicate and document the business process to the organization. Furthermore, implementation of the ETFM process model in conjunction with an understanding of the overall EBFM process will reduce potential exposure (both internal and external) of audit and control issues.  As with any organization, communication and information flow is critical to overall business success.  Data management and control are essential to any business operation.

Solution

Implementation of the EBFM process and understanding of a company’s Electronic Transaction Flow Management (ETFM) model (it exists whether understood or not) is not an easy task.  While there is nothing magical about these management disciplines, they are often overlooked or ignored by a company’s senior management (or worse, assumed to be in place).

Complete identification of all data elements inherent in an electronic business transaction is required to implement the EBFM model and the ETFM process.  This requires identification of both internal as well as external (trading partner) data elements.  In most cases, some accommodation of the external trading partner data model will need to be integrated into the company’s data model.  Because this is often extremely complex (especially when dealing with hundreds or thousands of external trading partners) it is often best to utilize outside expertise to initiate the process and train internal company personnel.

An integrated approach to this data gathering and data modeling is where Management Systems Consulting, Inc. can be of assistance.  Through many years of analysis, we have gained an understanding of how business rules impact the organizations ability to process transactions.  Our experience with electronic transaction processing, provide a solid basis for analysis of your company’s requirements.  Even though your business seems to be processing orders and business as usual, there are dramatic improvements (both operationally financially) that can be gained.  If your company is considering a new data processing system (financial, operation, inventory or distribution), we can assist by consolidating the data requirements and documenting the business process as implemented with the EBFM process.

Management Systems Consulting, Inc. is prepared to assist your organization to meet the challenges presented by the evolving Global e-Business model. Contact us to learn how to implement traditional EDI trading partner relationships or to grow existing relationships towards EBFM and the Global e-Business model.