The IT Factory

Supply Chain Management for IT Infrastructure Services:

Using the SCOR Model.

The IT Factory

IT infrastructure services, Adaptive Infrastructures, Utility Computing Infrastructures, Platforms as a Service, Service Oriented Infrastructures, Cloud Computing Infrastructures, Infrastructures as a Service, Real-Time Infrastructures, On-Demand Computing, Grid Computing…Supply Chain Management …. Are all trends that can be found in the IT industry, some already outdated, some new or still to be clarified. These trends all share some key characteristics. They deal with delivering services in an efficient, automated way, are easily able to adapt to changes in demand and ultimately appeal to anyone who wants to develop new business services fast.

So what are the challenges of traditional IT Infrastructure Departments?

Production methods and techno-tribes

Traditional IT Infrastructure departments with traditional ways of manufacturing IT infrastructure services, face a challenge when it comes to sustainability. These traditional IT departments mainly use job production as the method for manufacturing one-off, tailor-made and departmentalized IT infrastructure services and Engineer-to-Order processes and activities are common practice here. For each new IT request (an order), a new infrastructure service is designed and created (or engineered, hence Engineer-to-Order).In addition, one single traditional IT department typically contains many small, strongly technology focused groups of subject matter experts (equal to workshops with craftsman in factory terminology).

Control

Traditional IT departments put wheels into motion when a customer, typically from a department dealing with applications, requests a new IT infrastructure service for the support of a new application.

The result can, and therefore probably will, be an IT shop floor full of a variety of different machineries and tools, with each their own specific processes and manuals. It goes without saying that this is quite inefficient and high costs are involved. For an IT department, or IT Factory, to improve operations from a quality, cost and efficiency point of view, the challenge is in the area to regain control about how and with what tools and components to manufacture infrastructures.

Turnaround time

In the third challenge, a traditional IT Infrastructure takes many weeks to months of labor and idle time to manufacture a traditional Engineer-to-Order infrastructure service of reasonable size. Turnaround time is a main area of concern and challenge for traditional infrastructure operations where the disadvantages of job production and Engineer-to-Order (e.g. high costs, specialized labor and long duration) cannot follow the increasing pace of change in the business.

The Solution

It is time to move up a gear to implement methods which address today’s challenges: batch or mass production, Make-to-Order, Make-to-Stock and Configure-to-Order. These methods of production have some benefits over job production especially in the area of speed of production by using capital intensive automation and streamlined assembly lines. This increased productivity reduces the likelihood that a piece of infrastructure is never used since the supply of the infrastructure is very close to the point at which the demand for it was initially formulated.

The downside is obviously that mass production delivers some-sizes-fit-most IT infrastructures services and not the tailor-made ones. This requires some flexibility on the customer’s side to accept these “ready-to-wear” infrastructure services instead of the “tailor-mades”. This is something which is accepted in other day-to-day situations when, for example, ordering a car. People expect a limited choice of standard engines. Similarly there is no reason not to accept “ready-to-wear” for IT infrastructures services.

 It’s clear that IT departments need to get down to the Factory floor to gain the experience that has been ‘bread and butter’ thinking for Supply Chain disciplines for many years. Hans van Aken, a seasoned HP employee, with support from The Supply Chain Council, has used the Global Standard SCOR (Supply-Chain Operations Reference-model) to distil the experience of many Supply Chain experts to describe how businesses can implement IT Commoditisation and Value Chain using tried and tested techniques.

Hans van Aken describes how supply chain management for IT infrastructure services can use the reputable SCOR Model. He describes a position where Business demand is met with an efficient IT Supply:

IT Factory
Fig.1 The IT Supply Chain Reference Model
Van Aken notes: This model is actually drawn as a demand-driven IT supply chain which puts the “pull” of the customers’ demands in the spotlight rather than the “push” of available technologies and supplies. The choice for this demand-driven depiction encourages many in IT to first understand the demands of the customers (and the customers’ customers) and then secondly define and organize appropriate supply chains to meet the demands.’ The beauty of the content as devised by van Aken is the detailed practical guidance for delivering the Model. The Model is clearly set out and readers will be re-assured to know that the fundamentals are based on the successes of the tried and tested SCOR approach.
Conclusion

The Author puts the premise that traditional IT Infrastructure Services must adopt a ‘Factory’ approach to streamlining services, saving time and delivering solutions that the business needs faster and more efficiently. Clients are familiar with ‘fit for purpose’ standard solutions and don’t expect bespoke crafted solutions all the time. However they do expect the service to be clear, show a business benefit and deliver fast. The Author suggests that Factory operations can deliver proven models that can be used in just this way.

This text is an introduction to the concept of applying Supply Chain Models to IT Structures. It is part of the full book titled ‘The IT Factory’ which is available from Van Haren Publishing November 2011.
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