New Technology Development on Canadian Jewelry Industry - Part 2


2.1.6 Automation of Control Historical Background

As the main of modern project management methods are methods of network planning, which was developed in the late fifties (1950) in the United States. In 1956, M. Walker (2003) [7] in DuPont explored the possibility of a more efficient use of Univac computer, has joined forces with J. Kelly from the group of planning of capital construction in Remington Rand. They tried to use computers to produce large complex schedules for modernization DuPont factories. As a result, the streamlined and simple method of describing a project using a computer was created. Originally it was named by the Walker-Kelly, but later was called a critical path method “CPM”, Critical Path Method.

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Simultaneously (in 1958), an independent consulting company Booz, Allen & Hamilton created the method of analysis and evaluation (review) PERT programs (Program Evaluation and Review Technique). The method was used for the project implementation development a missile system Polaris, and, according to the company, it took fifteen years.

Ideas, similar to the underlying ideas of the PERT system, even in the thirties (1930) were proposed in the Soviet Union’ construction (during the construction of the Magnitogorsk Metallurgical Plant), but at that time they were not realized, so the necessary mathematical calculations were not made for them.

However, this does not mean that in Russia the ideas of the method were not interested to anyone. Thanks to the efforts of Nikanorov, S., [7] in the sixties (1960) the Ministry of Defence on behalf of subordinated institutions actively led research in this area.

The type of automation such as "Accounting, Plus Stock Management, Plus Corporate Network" does not mean the management system of the enterprise. One of the main objectives of the present automated management system of the enterprise is not workflow automation, but rather effective analysis of trends, the formation of short-, medium-and long-term forecasts, based on which the company management can make decisions about the organizational structure or production changes. The system is impossible to implement without creating a business model, which defines specific criteria for the operation and influencing factors.

Simultaneously it was developed and implemented a system of documentation flow from which the information serves as the basis for the calculations. Generally, the development of MIS (Management Information System) is not a trivial task, and in each case it is solved in its own way. Therefore, the software for such systems is never turnkey solutions, but rather systems of adaptive design (SAD). For example, a typical automation system for enterprise management from Sun Microsystems covers the following functional areas:

  • Drawing up and monitoring projects;
  • Managing storage resources and optimization of material flow streams;
  • Formation and monitoring orders;
  • Procurement;
  • Management cost products;
  • Load management capacities of the company;
  • Development of new products in view of technical documentation on the existing nomenclature;
  • Financial functions.

Project management systems are able to solve the following problems:

  • The development of the project schedule without taking into account constraints of resources;
  • The development project schedule taking into account limited resources;
  • Defining the critical path and time frame during the execution of the project;
  • Defining the needs of the project in funding, materials and equipment;
  • Determination of timing of loading renewable resources;
  • Risk analysis and planning schedules taking risks into account;
  • Project execution control;
  • Variance analysis of the progress results and the planning results;
  • Forecast of key risk parameters.

Project Management functions:

  • Schedule support for unlimited number of transactions taking into account the priorities of operations, the calculation of the critical path, the computation of time reserves, duration in hours, days, weeks, or a combination of three;
  • Ability to work with custom calendars in terms of activities and resources;
  • Support for all kind of types of work (tasks, milestones, hammock) and types of resources (renewable and nonrenewable);
  • Ability to work with project’ hierarchical structure;
  • Ability to perform sampling, sorting, grouping, summarizing.

Support for all major types of visual representation (Gantt chart, PERT-chart, table of resources / work table, links, resources, histogram). Current Situation

Any management structure has never functioned perfectly according to intended plan. In the process, some side objectives are identified and contradictory interests of the persons involved became in conflict with the objectives of the structure itself (Lynch, R., 2009) [9]. Thus, in normal circumstances the goal of any commercial company is to maximize its profit.

The goal of its head is a complex mixture of overbearing self-assertion and retrieving own benefits which is also often contradicts with each other (De Wit, B., Meyer, R., 2004) [10]. The goal of the staff is also complex combination of the desire to comfortably arrange the work time (not take time off from work, as is often believed) and receive the maximum salary. The goal of its customers is to get products, goods, services without undue problems, complexities and cheaply as possible.

If the author imposes on this mosaic picture of this structure some external impacts with specific objectives (the requirements of tax inspectorate, regulatory and other bodies), it is unclear whether such company could be reasonably managed.

The task of managing any company has two stages: the initial and ongoing. At the initial stage, a key role is to define the goals of functioning (optimality criterion, objective function), at the ongoing stage is necessary to organize the work in a way that each action of individual should ideally be aimed at achieving the optimum criterion (Thomson, J., Martin, F., 2005) [11].

In practice, at least do not contradict such criterion. If the problem is presented in such way, it is possible to computerize such problem. At the initial stage the company hires experts who conduct (very expensive) research of the company, laying the results of the research into the model and deriving the average optimality criterion. Automation of only document flow is even easier.

However, such system does not guarantee the increased productivity and optimal operational business processes of the enterprise. This conclusion can be confirmed at least by the fact that rampant computerization did not led to adequate increase in productivity.

Imagine a company with well-established business processes which with computers help or without it works well. And in this company suddenly appears quite irrelevant conflict. For example, like the recent conflict at "Crystal Plant" (Russia) where the previous director, who has no longer legitimate rights, but only general sympathy of the team, continues to lead.

The most interesting is that the plant continued to function in a relative normal way: all lines were working, the products were shipped. The system was very stable, even though such a powerful external perturbation was taken place, such as a temporary disruption of control. In in another team some irrelevant private conflict could lead to complete collapse.

Large companies are often unmanageable. Successful management requires the level of manager to be adequate to the complexity of a managed object. And no computer system, even is arbitrarily complex, is adequate to the complexity of the team. And that is exactly the content of the author statement: large companies cannot be managed in the way as middle- or small-size companies: for example, via computer management systems (Ojala, A., 2007) [12]. And all talks about the fact that computers can replace people at the managerial level, devoid of substance: as follows the law of Spencer [13] "Everyone can make a decision if he has enough information. A good leader is able to make a decision even without it."

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The real leader makes decisions even in the lack of information that is inconceivable for computer systems. Moreover, in the real life the leader has to make such decisions nearly every day. About such leaders are saying: "he's got flair, he feels the moment." And the most interesting is that such ability for managers is defining the real manager from bad one, rather than the ability to organize work so that the secretary knew what contract and when has to be sent. Last thing could be performed by computer.

In terms of cybernetics various methods of computerization are described, including very good one such as "Automation of management process", which includes automation systems of accounting and workflow, especially in the execution of:

  • Monitoring functions of situations in real or near real time;
  • Periodic reporting;
  • System of modelling and forecasting external circumstances (especially the behavior of markets);
  • System of scenario consequences of the decisions ("what-if" technique).

More correct name for all of these valuable products of information technology is the term "support system for management decision-making."

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