Innovative managerial control system (IMCS): an application in precast concrete building products industry

Abstract

The monitoring and control of business processes and their variables have strategic importance in order to respond to the dynamics of the world of business. Many monitoring processes are focussed on controlling time and cost and the overall performance is evaluated through a standard set of key performance indicators. These passive approaches do not consider a holistic/system view and therefore ignore the interrelationships between various external and internal variables impacting a business process. This paper investigates an application of multivariate statistical process control techniques [mainly principal component analysis (PCA) and partial least squares (PLS)] which have been successfully used in process and chemical industries, to model, monitor, control and predict business process variables. A prototype, innovative managerial control system (IMCS), was developed to investigate the application of PCA and PLS techniques to monitor, control and predict business process performance. Data was collected and analysed using a case study in a precast concrete building products company. This study has proved that the PCA approach can be effectively used to control business processes. Also, the PLS approach is found to provide better forecasts as compared to commonly used decomposition method. The benefits and limitations of using multivariate statistical process control techniques as applied to business process control are highlighted.