In order to make logical
decisions for product and system development, criteria need to be
established to measure the value or relative
importance of the system reaching its expected goals.
Measures of
Effectiveness (MoE) represent the customer view and
are generally qualitative in nature.
They
describe the customer’s expectations of the
system.
While many results of this
method seem logical and obvious, as systems become more complex,
this method of breaking down customer
requirements into basic components, aids in understanding where
the requirements were derived. Through the formulation of customer needs, we
distinguish the variables
determining system effectiveness in accomplishing
its goals.
This section will discuss key
measures of effectiveness in reaching automated system goals and
the systems production function versus
manual tracking methodology.
System goals have been
established to be 1) ability to track material movement into and out of
warehouse, 2) provide near real-time warehouse
inventory, and 3) provide a method for system update and
programming.
Therefore, three MoE objectives have been
established for measuring system effectiveness
in meeting customer needs. The MoEs are time to
market, cost, and rapid tracking.
Time to market is important when
assuring market share for system implementation. In the case
of automated tracking, time to market is
expected to be very short as it marries pre-existing commercial of
the shelf (COTS) equipment. Both RF communication and computer database
technology exists. System
implementation would entail conjoining the technology
in a warehouse setting.
Both implementation cost and
cost savings are important here. As
discussed in the time to market
section, cost of implementation is based upon
integration of technology, and will be considerably less than
the costs of component design. In addition, the customer would not justify
system implementation if cost
savings over manual tracking were apparent. After implementation, valuable human
resources can be
redirected to other operational functions.
Tracking speed is the
determining factor, aside from cost savings, for implementation. If
automated tracking does not improve tracking time
over manual operations, there is not need to utilize the
system.
An automated system will provide near real-time tracking where a manual
system will incorporate
a lag time between inventory and database
update.
The use of MoEs
provides the ability to assess the attainment of system objectives. Without these
measures, decision-making based on system
effectiveness is virtually untraceable.
The measures of
effectiveness can be found in Table 4.
|
Objectives |
Measures of Effectiveness |
|
1) Time to Market |
1.1 Utilizes
COTS |
|
|
1.2 Viability
in warehouse environment |
|
|
1.3 Simplicity
of conjoining technologies |
|
|
|
|
2) Cost |
2.1
Cost of equipment is not prohibitive |
|
|
2.2 Life cycle
costs are less than manual tracking |
|
|
2.3 Cost
savings are realized upon business expansion |
|
|
|
|
|
|
|
3) Rapid
Tracking |
3.1 Tracking
time is improved over manual tracking |
|
|
3.2 Tracking
time improvement allows for broader market capitalization |
|
|
3.3 Tracking
automation allows for redirection of human resources |
|
|
|
Total productivity of the
automated tracking system can be measured by tracking the throughput
of goods that are tracked in the warehouse
per resources placed into the tracking effort.
Similarly,
economic productivity can be traced for the
tracking portion and applied to the overall economic
productivity of the business. As business grows, the need for tracking
greater quantities of product grows.
As a direct
result, more resources (i.e. labor and labor dollars) need to be expended to
keep up with the
demand. These productivity function described follow the functional
forms below:
Total Productivity of Tracking Portion = Total Resources to Optimally Track Inventory Total Materials Tracked in Inventory
Economic Productivity = Total Cost to Track Inventory Cost of Materials Tracked
The differences
in manual tracking and automated tracking reside in system cost and
efficiency. The
automated system will achieve a constant level of
efficiency for an initial investment, maintenance cost and
a time rated upgrade/replacement cost, no
matter what increase in tracking is incurred during expansion.
On the other
hand, a manual tracking system will reach it level of efficiency, below that of
an automated
system, based upon labor costs for individuals
tracking the inventory. Labor will
increase during
expansion, but will not likely improve in
efficiency with the addition of tracking resources. For example,
30 people
tracking 30 items will not be more efficient than two. It is expected that the production functions
for these systems to follow Figure 16.
Resources Expended
Tracking Efficiency
Manual System
Automated System
Figure 16: Tracking System Production Functions
An automated
inventory tracking system will provide more effective resource utilization over
a manual inventory tracking system.