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Business Activity Monitoring (BAM) |
“A process by which key operational business events are monitored for changes or trends indicating opportunities or problems, and enabling business managers to take corrective action.”
Similar to SCEM, BAM is usually (but not always) used in conjunction with Key Performance Indicators (KPIs) to give a longer term view of various performance criteria.
KPI monitoring in real time
Organizations are using key performance indicators (KPIs) to monitor and measure all aspects of the business from finance to the shop floor. By setting tolerances for key aspects of the operation, workers and management can focus on business, periodically checking KPIs to determine whether adjustments are required to maintain progress against objectives.
By automatically monitoring KPIs in virtual real time organizations eliminate employee cycles spent proactively checking these values. It also improves agility by instantly alerting the appropriate individual(s) and systems when a KPI value is out of range so that corrective action can be taken immediately.
Tracking and analyzing the frequency with which various exception conditions occur can give a valuable insight into the operation of a business.
By tracking KPI deviations over time, such as failed incoming quality inspections by a vendor or late deliveries by individual freight haulers, companies not only can identify negative trends but also closely monitor quality process improvement efforts.
Alerts can also be quickly created and placed against KPIs for new suppliers or vendors, monitoring performance against contractual service level agreements until reliability is clearly demonstrated.
Examples of how the Categoric solution could create value include:
Finance
Alert when budget is within "x" percentage of being exceeded or has been exceeded.
Work Order Management
If the duration of an open work order slips, alert Operations to re-allocate resources or re-route jobs to meet production time schedules.
Process Control Tolerances
If quality control standards and tolerances are not being met, notify QA, Maintenance, or Engineering.
Material Movement
If materials required for manufacturing operation do not arrive at a work cell before safety stock is broached, alert Operations.
Delivery Monitoring
Alert Traffic or Expeditor if scheduled JIT inventory delivery is more than "n" minutes late.
Equipment/Vehicle Maintenance
Alert if scheduled preventative maintenance "lock-out" does not occur.
Product Obsolescence
When individual products have been held in inventory past a time threshold, alert to possible excess-no move-obsolete situation.
Inventory Management
Initiate replenishment cycle immediately upon material levels hitting a ROP.
Quality Conformance
Alert Purchasing and Engineering if a materials delivery fails incoming inspection.
Planning Forecast Review
Alert Planner if forecast received is n% off of expected.
Consider the immediacy of the examples above. All of these processes would involve substantially more steps and delays using traditional reporting techniques.
It is vastly more efficient to eliminate reporting and response latency in favor of a solution which by exception management decreases time to organizational awareness, frees-up employee hours spent reviewing reports and wipes out the traditional lag time from event to observation to notification to escalation to action.
What does this mean?
The approach that can be taken with the Categoric solution is to reduce key points of latency (delay) in the notification and response cycle.
Traditional process for addressing an exception:
1. Exception/problematic event occurs
2. Discovery
3. Notification
4. Escalation
5. Response/intervention
Categoric approach to addressing exceptions:
1. Exception/problematic event occurs
2. Simultaneous notification/escalation/optional automated response
3. Optional manual response/intervention
The key, as shown by comparing the two flows above, is to compress the time between when an event happens and when action is taken. The traditional five-stage flow from event to response involves at least four distinct delays.
In a process where daily or weekly reports are the norm, the gap between 1 and 2 will represent a delay of at least a day or a week. With multiple exceptions over time this delay increases arithmetically with the number of reports it takes to observe a serious trend. However the delay may cause an exponential increase in business damage.
The Categoric solution can provide automatic detection, simultaneous direct notification of all appropriate personnel and systems, automated rules-based escalation and optional triggering of automated corrective action.
In other words, Categoric can reduce the five stage flow to three or even to two stages if a business rules-based response has been set up.
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