The reengineering of a purchasing system by simulation and principal component analysis

Abstract

This paper introduces a framework for the reengineering design and assessment of a purchasing management system by Business Process Simulation (BPS) and Principal Component Analysis (PCA). The conceptual model of the business process was developed by Integrated Definition for Function Modelling (IDEF0). The process times were collected by a standard time study and analysed by statistical analysis and the computer simulation model of the process was developed by Visual SLAM. The current system was then compared with three Business Process Reengineering (BPR) models through PCA. The first BPR utilises the Davenport approach for the design process and uses organisational, human resource and Information Technology (IT) enablers. The second and third alternatives use Electronic Data Interchange (EDI) technology and the deletion of expense accounts in the current purchasing system. The approach of this study may be used for the reengineering design and assessment of other purchasing management systems. The unique features of this study are threefold. First, it introduces a framework for the development of BPS and, consequently, the BPR of purchasing systems. Various alternatives (including the Davenport approach) with respect to BPR may be assessed. There is also a verification mechanism for both BPS and PCA via Numerical Taxonomy (NT).