Introduction
According to the TOGAF manual, when creating the Architecture Vision, it is advisable to begin by establishing an overarching architecture that illustrates how all the various components from different architectural domains will come together. This should align with the chosen course of action.
To construct the Architecture Vision, consider stakeholder concerns, business capability requirements, scope, constraints, and guiding principles. This process involves developing a high-level representation of both the existing Baseline Architecture and the desired Target Architecture. The Architecture Vision should encompass the broader project scope, but at a high-level overview. Informal techniques are often utilized.
A common approach is to craft a simplified solution concept diagram. This diagram should succinctly depict the primary components of the proposed solution and illustrate how implementing this solution will yield benefits for the enterprise.
Example: Inventory Management System
Problem Description:
Let’s consider a hypothetical problem: “Inefficient Inventory Management at a Retail Store.”
In this scenario, a retail store is experiencing significant issues with their inventory management system. The store often runs into problems such as overstocking certain products while understocking others. This inefficiency leads to increased carrying costs, stockouts, and missed sales opportunities. The store also faces challenges in tracking product expiration dates, resulting in increased waste of perishable goods. Additionally, the manual nature of their inventory management processes is time-consuming and error-prone.
As-Is Analysis:
- Manual Processes: The store currently relies heavily on manual inventory management processes, which involve counting items on shelves, recording data on paper, and updating spreadsheets. This manual approach is prone to errors and consumes a significant amount of time.
- Lack of Real-Time Data: The store lacks a real-time inventory tracking system, making it difficult to get up-to-date information on stock levels. This leads to frequent stockouts and overstock situations.
- Inaccurate Forecasting: The store struggles with forecasting demand accurately. As a result, they often order too much of certain products and too little of others, leading to imbalanced inventory levels.
- Perishable Item Waste: Due to the absence of proper tracking, the store often fails to sell perishable items before their expiration dates, resulting in significant waste and financial loss.
- Limited Supplier Communication: The store doesn’t have efficient communication channels with suppliers to adjust orders in response to changing demand or to receive timely information about product availability.
- High Carrying Costs: Excessive inventory ties up capital and results in higher carrying costs, impacting the store’s profitability.
To-Be Analysis:
- Implement Inventory Management Software: The store should invest in an advanced inventory management software solution that provides real-time tracking of inventory levels and automates many aspects of inventory management.
- Barcode Scanning: Implement barcode scanning technology to streamline the tracking of products entering and leaving the store. This will reduce errors and improve efficiency.
- Demand Forecasting: Utilize data analytics and historical sales data to improve demand forecasting. This will help the store order the right quantity of products and reduce overstock and stockout situations.
- Supplier Integration: Establish better communication channels with suppliers through electronic data interchange (EDI) or similar systems. This will enable real-time updates on product availability and facilitate timely adjustments to orders.
- Expiry Date Tracking: Incorporate a system that tracks the expiry dates of perishable items and automatically alerts staff when items are nearing expiration to reduce waste.
- Employee Training: Provide training to employees on the new inventory management system to ensure they can use it effectively.
- Performance Metrics: Implement key performance indicators (KPIs) to measure the efficiency of the new system, such as inventory turnover ratio, carrying costs, and order fulfillment rates.
- Continuous Improvement: Regularly review and optimize inventory management processes based on data and feedback to adapt to changing market conditions and customer preferences.
By implementing these changes, the retail store can transition from an inefficient manual inventory management system to an efficient, automated, and data-driven system that reduces costs, minimizes waste, and improves overall profitability.
From As-is / To-be to Solution Concept Diagram
Let’s break down the system components into front office, mid-office, and back-office layers for both the “As-Is” and “To-Be” scenarios of the inventory management system:
As-Is Inventory Management System:
- Front Office:
- Point-of-Sale (POS) Terminals: These are used by store employees to record sales transactions and update inventory levels when products are sold.
- Customer-Facing Applications: Mobile apps or online interfaces where customers can check product availability and place orders.
- Mid-Office:
- Inventory Management Software: A basic inventory management software that includes functions for manual data entry, inventory tracking, and order management.
- Spreadsheet Applications: Excel or similar tools used for recording and managing inventory data.
- Manual Data Entry: Employees manually record inventory counts and update stock levels.
- Back Office:
- Inventory Storage: The physical storage areas within the store where products are kept.
- Paper Records: Paper-based records of inventory counts and orders.
- Supplier Communication: Email or phone communication with suppliers for placing orders and checking product availability.
To-Be Inventory Management System:
- Front Office:
- Enhanced Point-of-Sale (POS) Terminals: These are upgraded with barcode scanners and real-time inventory integration.
- Customer-Facing Online Portal: An improved online platform with real-time inventory data, order history, and product availability information for customers.
- Mid-Office:
- Advanced Inventory Management Software: A robust software solution that offers real-time inventory tracking, demand forecasting, and supplier integration.
- Barcode Scanning Technology: Integrated with the inventory management system to streamline product tracking and reduce errors.
- Automated Data Entry: Minimized manual data entry through the use of barcode scanners and automated inventory updates.
- Back Office:
- Optimized Inventory Storage: Improved organization and labeling of storage areas, including dedicated sections for perishable items.
- Expiry Date Tracking System: A module within the inventory management software to track and manage perishable item expiration dates.
- Supplier Integration: Electronic data interchange (EDI) or similar systems for real-time communication with suppliers, including automated order adjustments based on demand forecasts.
- Digital Records: All inventory data is stored digitally within the inventory management software, eliminating the need for paper records.
The “To-Be” scenario involves a significant upgrade to the inventory management system, introducing advanced technology, automation, and real-time data integration at all levels. This transformation aims to improve efficiency, reduce errors, enhance customer experience, and optimize inventory levels.
Summarizing the components for The Inventory Management System
The following table summarizing the components of the “As-Is” and “To-Be” inventory management systems, along with the identified gaps and the expected value to be obtained in the “To-Be” scenario:
| Current System Component | Target System Component | Gap | Value to Be Obtained |
|---|---|---|---|
| As-Is Inventory Management System: | |||
| Front Office: | |||
| Point-of-Sale (POS) Terminals | Enhanced POS Terminals with Barcode Scanners and Real-time Inventory Integration | Lack of barcode scanning and real-time integration | Improved transaction speed, reduced errors, real-time inventory tracking |
| Customer-Facing Applications | Customer-Facing Online Portal | Limited information and functionality for customers | Enhanced customer experience, real-time information access |
| Mid-Office: | |||
| Inventory Management Software | Advanced Inventory Management Software | Basic functionality and manual data entry | Real-time tracking, demand forecasting, supplier integration |
| Spreadsheet Applications | Barcode Scanning Technology | Reliance on manual data entry | Reduced manual effort, fewer errors |
| Manual Data Entry | Automated Data Entry | Manual data entry is time-consuming and error-prone | Minimized manual effort, improved accuracy |
| Back Office: | |||
| Inventory Storage | Optimized Inventory Storage | Lack of organization and labeling | Improved organization, reduced search time |
| Paper Records | Digital Records | Reliance on paper-based records | Enhanced data accessibility, reduced paperwork |
| Supplier Communication | Supplier Integration | Manual communication, delayed responses | Real-time communication, automated order adjustments |
| To-Be Inventory Management System: | |||
| Front Office: | |||
| Enhanced Point-of-Sale (POS) Terminals | (Continuation) | (Continuation) | (Continuation) |
| Customer-Facing Online Portal | (Continuation) | (Continuation) | (Continuation) |
| Mid-Office: | |||
| Advanced Inventory Management Software | (Continuation) | (Continuation) | (Continuation) |
| Barcode Scanning Technology | (Continuation) | (Continuation) | (Continuation) |
| Automated Data Entry | (Continuation) | (Continuation) | (Continuation) |
| Back Office: | |||
| Optimized Inventory Storage | (Continuation) | (Continuation) | (Continuation) |
| Expiry Date Tracking System | Expiry Date Tracking Module | No expiration tracking system | Improved perishable item management |
| Supplier Integration | (Continuation) | (Continuation) | (Continuation) |
| Digital Records | (Continuation) | (Continuation) | (Continuation) |
The “To-Be” system enhancements are aimed at filling the identified gaps in the “As-Is” system, leading to improved efficiency, reduced errors, enhanced customer experience, and optimized inventory management.
Summary
The “As-Is” inventory management system comprises various components, including front office, mid-office, and back office layers. However, it exhibits limitations such as manual data entry, reliance on paper records, and suboptimal communication with suppliers. To address these deficiencies and unlock new opportunities, the “To-Be” inventory management system is envisioned.
In the “To-Be” system, each layer undergoes a transformation:
- Front Office: The point-of-sale (POS) terminals are enhanced with barcode scanners and real-time inventory integration, while the customer-facing online portal gains more functionality and real-time data access.
- Mid-Office: The basic inventory management software is upgraded to an advanced solution with real-time tracking and supplier integration. Barcode scanning technology and automated data entry reduce manual effort and errors.
- Back Office: Inventory storage is optimized for better organization, and an expiry date tracking module is introduced to manage perishable items efficiently. Supplier integration is improved, and all inventory data is stored digitally, eliminating paper records.
This transformation promises significant value, including enhanced transaction speed, reduced errors, improved customer experiences, real-time information access, demand forecasting, and streamlined supplier communication. Overall, the “To-Be” inventory management system represents a comprehensive upgrade that aligns with the evolving needs of modern businesses, ensuring they stay competitive and responsive in the market.