Classification Redefined A foundation to organizational efficiency with minimal investments
By Anurag Jain, chief solution partner, NPI/PLM, Tata Consultancy Services Co-authors: Sachin Gadgil, Sathishkumar T, Sharad Pandey and Jimish Shah
If you are a product manager, knowledge management champion, portfolio manager or an internal consultant working on reducing time to market, cost reduction, strategic sourcing, portfolio development and regulatory compliance, there is good news for you. There is a fundamental solution to address your challenges with minimal investment.
This article highlights the potential of classification, and provides pointers on how to build and deploy a scalable classification framework to realize organization goals. It will force you to rethink classification as a key differentiator in success. To know what all can be done achieved and how.
Introduction In every product or process industry, classification (part, product, process etc.) has been in use for a long time. However, in most of the organizations, the classification logic is so antiquated and retired, that it is becoming legacy and liability. The classification logic is serving today’s needs at best, but it loses huge benefit potential from cost, time and quality aspects. If improperly addressed, it clogs the bandwidth of organization from carrying out innovation or designing products or services that will be economically effective.
Classification is defined as “systematic arrangement in groups or categories of objects under consideration, based on certain parameters at various levels.” While this definition is fundamental, potential benefits are still evading most organizations. What are those benefits? And where they can be leveraged the most? The figure below gives some pointers.
Benefits of Classification
In many organizations, however, these goals are not realized to the desired level, as the classification exercise is not given due attention and support. In most cases, it is treated as a low key, mandatory rigmarole to deal with. It is considered as single stage static definitions, or a one-time clean up activity. In actual deployment, it may even become more like where each part of the organization has its own perception and requirements on how to classify objects. What actually required is a consistent and comprehensive view for the organization, which can provide a lot of continual value.
The most important factor for classification is to see it from value chain perspective. The perspective, where classification is not only linked to the static definition of parts or products but is also coupled with the value chain processes and reverse processes as well. Here, classification assumes living existence, and hence it is vital to design its origin and usage with provision for regular refinements and revisits. Classification should be considered as a journey rather than a static process, taking integrated views into consideration. This article tables a robust and scalable framework for classification. Intent is to showcase ‘Art of Possible’ and not to delve into details.
However, one should keep in mind, that classification is not a silver bullet. It serves as a foundation and feeder for several capabilities for the organization. For compounded benefits, classification works in synergy with other core capabilities and delivers continual benefits. Obviously, success of the structure depends on robustness of the foundation and agility of collaboration. The following figure shows how each capability fits into the big picture.
Principles Behind Versatile, Effective and Robust Classification So what goes in to building a robust, scalable and useful classification structure? Some of the important aspects are object definition, grouping and hierarchical structure of objects and classification data, modularity and level abstraction of information, ability to link objects to categorization in different streams and at different levels, and accuracy and scalability of classification schema. It will be an understatement to say that object definition is the most fundamental aspect. The quality and scalability of classification will depend on how well object definition is done across the organization. It helps in distinguishing different object types as per their application and applying appropriate classification structure. For example, instead of defining manufacturing tool as just another category of “part” and force fitting required classification structure on top of part classification structure, we can define them as different object types and have a separate classification structure.
Other factors are classification schema and linkages. Different classification schemas are needed for different purposes. Classification can be applied in a hierarchical manner, based on the requirement in context. Advantage of this approach is that Grouping and hierarchical structure of objects, classification data, modularity and level abstraction of information helps keep classification structure easy to understand and use. Additionally, it brings in robustness and scalability to the framework in long term. Ability to link objects to categorization in different streams and at different levels will enable the “pull” of information. It gives ability to link all the relevant information to an object, addressing enterprise needs.
Classification Approaches A building block approach is proposed for deployment or should we say, to embark on Classification Journey. Each of the cubes, in the figure given below, represents the enablers for classification at that level. The framework represents a matrix structure with different levels of benefit realization cutting across the organizational objectives. To meet the classification requirements, an organization should go along the desired path of benefit realization with respect to the objectives.
The figure below includes two approaches by which the classification framework can be deployed. But on both the approaches, the focus is aligned toward benefit realization. The first approach (on top right) shows the benefit-centric approach where the classification is defined to meet a specific objective of the organization and build upon the benefits. The second approach (right bottom) addresses a linear pattern for classification deployment to meet multiple objectives of the organization without compromising on the benefits. There may also be an objective centric approach (hybrid approach) where the deployment takes a zigzag pattern to suit the need of the organization. Whatever may be the approach, the basic principle of deployment should be to grow with the respective foundational blocks and make it a process continuum.
Building Block Approach to Achieve Classification Continuum
Implementation Scenarios Apart from approaches mentioned above, the scenario that one is trying to address affects the classification deployment. Different scenarios pose different challenges. One must be sensitive to those challenges and address them upfront. Planning the deployment is very important to ensure success of program. Some of the relevant scenarios are described below:
A small organization
A large and complex organization
Looking for ways to harmonize their respective classification structure after merger or acquisition
Looking for upgrading the outdated classification schema
Looking for a scalable classification approach without losing the existing information in the system
Restructuring is required in most of the cases; attention should be provided to business model.
Existing tool or solution partner defined schema can be leveraged if aligned with objectives.
This should be well defined and uniformly understood across the organization.
Definitions of new Classification Schema
Best of two can be adopted, with objective analysis without losing sight on desired benefits.
Relevant industry standards can be leveraged.
The various options must be objectively assessed based on predefined parameters.
Mapping of existing logic
If above two are well executed, this step will go through without major problem.
This activity is required only on need basis.
This may turn very complex based on delta you have defined in object definition from existing system.
Quality of existing data and technical compatibility are major factors.
Comparatively in this case migration is easier.
At times, loose object definitions, technical compatibility and phased migration can prove a roadblock.
Metrics and Measurement
Part redundancy, product development costs, migration costs
Product development costs, supply chain costs, time to market
Part redundancy, migration costs, supply chain costs, time to market
Conclusion The topic of classification is not simple. Classification is not rigmarole. The purpose of classification can be defeated by bad design, in absence of vision to treat it as a journey for organizational effectiveness. It can work wonders if perceived well, and it’s made to work in conjunction with other initiatives in the eco-system of a business. There are methods and framework available with ready experience to ensure that an organization sets on the classification journey with the right map and accurate compass.
About the Authors The authors have consulting experience with a large, global base of customers and have expertise in areas of visioning, definition and complex program management. The authors are practicing consultants working with Tata Consultancy Services (TCS), an IT services, consulting and business solutions organization that delivers real results to global business. All exhibits are based on TCS research and consulting experience, unless otherwise stated.
Released: December 3, 2012, 10:35 am