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Virtual organization and supply chain management
Abstract
In the center of supply chain management initiatives are the series of applications that synchronize demand and supply, manage inventory, ensure service-level commitments, and provide greater visibility into the manufacturing operations. At the same time the concept of Virtual Organization (VO) challenges the way industrial production systems are planned and managed. The topic is analyzed in context of vertically integrated public limited company Eesti Energia AS (EE) located in the Republic of Estonia where for the companies that are related with electricity grid management is implemented software in the framework Tehnonet (TN), which uses concept of VO
... As Storey et al (2006) state, there is a shift of SCM to a collaborative model and virtuality, two basic characteristics of virtual organisations. Furthermore, Kangilaski (2005) views VOs as a SC strategy, while Browne & Zhang (1999) illustrate the similarities and differences of extended and virtual enterprises. Our work on knowledge-based analysis of supply chain strategies is motivated by the increasing importance of SCM, and it intends to serve as a vehicle for insight into and comparison of different supply chain strategies. ...
... As Storey et al (2006) state, there is a shift of SCM to a collaborative model and virtuality, two basic characteristics of virtual organisations. Furthermore, Kangilaski (2005) views VOs as a SC strategy, while Browne & Zhang (1999) illustrate the similarities and differences of extended and virtual enterprises. ...
The infrastructure of Grid is approaching maturity and can be used to enable the utilisation and sharing of large scale, remote data storages through distributed computational capabilities and support collaborations and co-operations between different organisations. Grid can therefore be suitably used to support the creation and running of a Virtual Organisation (VO). However, to assist the smooth operation of VOs, robust computational and storage facilities alone are not sufficient. There must also exist appropriate rich business infrastructure. In this work, we consider business process frameworks that utilise semantics-based Business Process Modelling (BPM) technologies, and we illustrate the multidisciplinary nature of our approach by applying them to three different fields: Supply Chain Management, Business Intelligence and Knowledge Management, and Intelligent Video Analysis. We aim to show that these three application areas that incorporate semantics-based BPM methods could be used to support developing Grid applications, and to subsequently support VOs.
... These networks are mostly the long term strategic alliances. In addition to the strategic alliances, there are also the goaloriented networks, which can be considered as extensions of the strategic alliances when essential competences / resources are missing or are not reachable [1] [2], and frequently based on vertical cooperation. Such, networks ties the companies together, via horizontal, as well as via vertical communication, to be ready for the new business opportunities, that they will not be capable to respond alone, or to minimize their business risks. ...
Communication is a crucial element in business
environment. It ties companies together to work on a common
business goal, as well as destroys existing business connection.
Thus it is important to understand dynamics of partner
networks. The current article analyses Partner Network lifecycle
and it maturity aspects.
... das competências centrais dos integrantes na cadeia de suprimentos pode revelar a transferência de processos que não agregam valor a outros. Para McIvor (2003), as habilidades da empresa devem ser mantidas se elas servirem para sustentar uma vantagem competitiva, caso contrário devem ser negociadas com alianças estratégicas e relações cooperativas. Vollmann et al. (1996) classificaram as competências na cadeia em: distintivas, qualificadoras e básicas. A identificação da importância das competências permite às empresas estabelecerem as relações entre os processos de negócios com variados graus de proximidade entre parceiros. abertos; cooperação; coordenação e colaboração. Já Lambert et al. (1996) identi ...
The objective of this article is to propose an analytical model of support to the configuration and integration of the supply chain as the basis for the development and/or improvement of SCM projects. The methodological aspects were based on a review of the literature on issues related to supply chain management and value chains. The nature of the research used in this article is basic since it produced a theoretical instrument without practical application. A conceptual structure was built supported by an exploratory and descriptive literature review providing the foundation for the development of the proposed model. The approach of this article is qualitative. The theoretical results obtained represent the proposition of an analytical model developed to properly set up the supply chain integrating various perspectives for a better contextualization of the interactions between the links and members of arrangement. Thus, this article proposes a tool to assist in the development or improvement of projects for supply chain management.
... Reverse logistics consists of planning, implementing and controlling the reverse flow of materials as well as management of related downstream information within the supply chain with the primary purpose of recapturing value. Today customers are looking for product features that include reusability, multi-functionality and reconfigurability [29]. ...
Manufacturing of material handling equipment companies become more interested in the sustainability of their products. One possible approach to make material handling equipment more sustainable is to make it reconfigurable, reusable and reliable. Those products are likely to be reused when customers’ requirements change. More sustainable material handling equipment can be much easier куsold in the future, due to the possibility to be reconfigured in accordance to the new customer requirements is high.
This paper is focused on the development of a reverse logistics framework for more sustainable material handling equipment design. The novelty of the proposed reverse logistics framework is that it can reduce the backward flow of products to the manufacturer by enabling distributors to reconfigure products according to the renewed customer requirements. In the presented case study the benefits of employing sustainable reach truck were investigated. As a result, using sustainable product provides cost and flexibility advantages for both manufacturer and customer.
Planning an Virtual Organization in a reasonable time to make proposal by Focal Player to the potential customer is quite challenging. There is a need to understand existing capabilities and their availabilities in the Partner Network and if there are determined some constraints, the external companies should be called in. The current article analyzes and proposes an approach how the Focal Player in Partner Network could use maturity based models to perform business process analyses which needed to be implemented to satisfy the potential customers' need.
Electricity markets across Europe have changed significantly over the last years as market liberalization, changing power generation dynamics, privatization and structural change have replaced the state in which European energy was before. The European Commission expects that the internal European Market should run as one market without restrictions on the individual borders. The change continues with ongoing moves for further market liberalization and competition with a number of major European energy businesses. To be ready for such alternation, businesses need to redesign their existing business processes using ICT solutions as an important enabling factor. Current article analyzes the main challenges of implementation phase of Asset Management software. The challenges are analyzed in example of Estonian power utility Eesti Energia locating in Republic of Estonia, which Distribution and Transmission Network companies are currently implementing Asset Management software within project called VHT. The project's 1st phase go live date is the 1st of June, 2009.
New business condition and current economical situation are forcing companies to rethink their way of operating. The rapidity
of managing changes has become increasingly important. To be more competitive, companies are forming Virtual Organizations
(VO) where short-term spontaneous collaboration activities are rather common. Such interoperability leads to increasing organizational
architectural complexity. As the VO interoperability availability depends on quality of companies Enterprise Architecture
approach belonging to ecosystem, the current article propose focus points for architecture management in VO.
KeywordsEnterprise Architecture-Virtual Organization-Communication
The concept of virtual organization (VO) challenges the way industrial production systems are planned and managed. Basically, a VO is temporary alliance of enterprises that come together to share skills and resources in order to better respond to business opportunities and are enterprises whose cooperation is supported by computer network. At the same time, the importance of information and communication technology (ICT) has been growing and has caused the situation where ICT functional area profoundly affects the organizational performance. The current article focuses on the topic, how to align business goals and ICT activities in VO.
Concept of Virtual Organization (VO) is one enabling factor for today's Small and Mid sized Enterprises (SME) to rebuild their position in new market condition. As the businesses are highly supported by Information and Communication Technology (ICT), nowadays it is highly important to manage it in a way that will minimize the possibility that ICT will be the bottleneck which makes constraints for new cooperation. In current article, the approach of Enterprise Architecture management is analyzed in context of VO-s.
The paper begins with an overview of some of the forces that have shaped supply chain management and partnership relationships. Next the potential benefits and risks of involvement in supply chain management/partnership relationships are discussed from the perspective of both the shipper and the service provider (warehousers and transportation firms). Results from a major survey of shippers, warehousers and transportation providers are used to illustrate the risks and benefits. Means of minimizing the potential risks are also suggested. The paper concludes with a discussion of issues in supply chain management that would benefit from further analysis and research. These issues include determination of whether a firm should use a supply chain management approach, the management structure to use in supply chain management, and modelling supply chain management systems.
Since the late 1950's it has been recognized that the systems used internally within supply chains can lead to oscillations in demand and inventory as orders pass through the system. The uncertainty generated can result in late deliveries, order cancellations and an increased reliance on inventory to buffer these effects. Despite the best efforts of organizations to stabilize the dynamics generated, industry still experiences a high degree of uncertainty. The failure to significantly reduce uncertainty through traditional approaches may in part be explained by chaos theory. This paper defines deterministic chaos and demonstrates that supply chains can display some of the key characteristics of chaotic systems, namely: chaos exhibits sensitivity to initial conditions; it has Islands of Stability; generates patterns; invalidates the reductionist view; and, undermines computer accuracy. The implications for the management and design of supply chains are discussed.
Practitioners and educators have variously addressed the concept of supply chain management (SCM) as an extension of logistics, the same as logistics, or as an all-encompassing approach to business integration. Based on a review of the literature and management practice, it is clear that there is a need for some level of coordination of activities and processes within and between organizations in the supply chain that extends beyond logistics. We believe that this is what should be called SCM. This article proposes a conceptual model that provides guidance for future supply chain decision-making and research.
The concept of virtual enterprise challenges the way industrial production systems are planned and managed. The materialization of this paradigm, although enabled by recent developments in communication technologies, computer networks, and cooperative systems still requires a full understanding of the processes of interaction between companies as well as the design and implementation of open support platforms. The reengineering of activities for a networked operation and the implantation methodologies considering not only the technical but also the socio-organizational aspects must be also taken into account. This paper describes the current approach being developed by the Esprit project PRODNET II1, which aims to design and develop an open platform to support industrial virtual enterprises with special focus on the needs of small and medium enterprises (SMEs).
The design and development of invisible, easy to use and affordable ICT infrastructures is a key prerequisite for the effective large-scale implantation of the collaborative networks organizations such as virtual organizations, professional virtual communities, e-science communities, etc. This paper introduces an overview of the main classes of infrastructure required by different types of virtual organizations and the main approaches being followed in the European projects in the area.
SCM is one of the hottest topics in manufacturing and distribution, and like JIT and TQC it requires a corporate commitment. This book provides both fundamental principles of SCM as well as a set of guidelines to assist in practical application of SCM. It will be one of the first books on the market that deals exclusively with SCM and its application. Readers in the academic, management sciences, sales, marketing and government environments will find this book of particular interest.
The use of industrial dynamics modelling of real‐life supply chains has only recently re‐emerged from the shadows after a lengthy gestation period. Shows that it is a powerful methodology for predicting and prioritizing methods of re‐engineering the chain in order to achieve enhanced performance when viewed from the perspective of all “players” in the chain. Building an adequate model of an existing, or proposed, real‐life supply chain requires the use of people‐based sources, observation‐based sources, and systems‐knowledge‐based sources. Illustrates each of these approaches. Concludes with predicting the benefits expected from substantial re‐engineering of an electronics products supply chain.
Conflict minerals is a media term used to describe minerals that are mined in a war zone and sold illegally to finance the efforts of armed militias. One of the last regulations signed by Governor Schwarzenegger before he left office in 2010, the Transparency Act requires any company doing business in the state to publicly disclose the policies, processes, and controls that they use to monitor and eliminate slavery and human trafficking in their supply chain. Customers have always made demands on their suppliers to provide more and better information about the products they provide. Sustainability issues are no exception, but over the past few years, these questions have gone from background information to being crucial to how a company scores a response to a request for proposal (RFP). Regardless of size, all companies should at least know the scope of their supply base and where they have points of leverage.
Many firms have been trying to optimize their production and distribution systems separately, but using this approach limits any possible increase in profit. Thus, it is becoming more important to analyse these two systems simultaneously. This paper presents the solutions for integrated production and distribution planning and investigates the effectiveness of their integration through a computational study, in a multi-plant, multi-retailer, multi-item, and multi-period logistic environment where the objective is to maximize the total net profit. Computational results on test problems using the proposed heuristic confirm the substantial advantage of the integrated planning approach over the decoupled one. Sensitivity analysis on the input parameters indicates that, under the right conditions, the effectiveness of integrating production and distribution functions can be extremely high.
Competitive pressures will force major changes in inventory management in the next few years. Changes will result from businesses identifying and capitalising on the opportunities to manage their entire supply chains as single entities. Supply chain management techniques deal with the planning and control of total materials flow from suppliers through end-users (see Figure 1).
Outlines cost benefits for information system implementation using
electronic data interchange as the enabling tool. Highlights rarely
cited on-cost benefits through the examination of supply chain dynamics,
and their relative reductions created through increased stability.
Examines two business re-design strategies, namely lead time reduction
via information systems implementation and information integration in
the form of actual customer demand fed forward to all supply chain
members. Highlights global integrated logistics information systems and
describes their role in overall supply chain system optimization.
Common to all manufacturing companies is the need to control the
flow of material from suppliers, through the value adding processes and
distribution channels, to customers. The supply chain is the connected
series of activities which is concerned with planning, co-ordinating and
controlling material, parts and finished goods from supplier to
customer. Traditionally, the flow of material has been considered only
at an operational level. No longer, however, can the potential of
integrating the supply chain be ignored. Companies that manage the
supply chain as a single entity and ensure the appropriate use of tools
and techniques in order to meet the needs of the market, will not get
left behind in the fight for survival.
Effective supply chain management increasingly depends on information technology. Many of these technologies are relevant for both domestic and international supply chains, and many of these are discussed in other chapters of this book. Our focus is on international supply chain management. Information technologies that are unique to international trade draw on a complex and extensive array of regulations. The purpose of this chapter is to provide an introductory primer for understanding what underlies these technologies and, more important, for a firm considering a shift from supply chains that are largely domestic in scope to a broader international orientation. Although we briefly discuss software specific to international supply chains, most of our discussion pertains to laws, service providers, and ways of doing business that any firm must understand to take advantage of opportunities for international buying and selling. We also provide references and links to more detailed information.
In view of the recent popularity in supply chain management to transfer the stock level decision and the stock keeping responsibility to the upstream, we consider in this paper whether a two-member supply chain (the upstream vendor V and the downstream retailer R) operating in a newsboy environment should adopt this new mechanism. The supply chain can be operated in one of two ways: the traditional way, in which the downstream retailer decides the inventory level and keeps the inventory, or the new way in which inventory-keeping responsibility and stock level decision switch to the upstream vendor. By comparing the expected payoffs in these two cases, we find that transferring demand-uncertainty risk from R to V does not necessarily lead to a higher expected payoff for R or a lower one for V. In general, we find that the critical fractile used in a newsboy problem to determine the optimal stock level can often be used as a yardstick to quickly assess the merits of adopting the new mechanism. Furthermore, we show that when the critical fractile of V is greater than that of R, adopting the new mechanism always makes both V and R better off, provided some kind of risk-sharing rule could be implemented.
In recent years, numerous approaches have been proposed to improve operations performance. Three in particular, just in time, supply chain management, and quality management, have received considerable attention. While the three are sometimes viewed and implemented as if they were independent and distinct, they can also be used as three prongs of an integrated operations strategy. This study empirically examines the extent to which just in time, supply chain management, and quality management are correlated, and how they impact business performance. Results demonstrate that at both strategic and operational levels, linkages exist between how just in time, total quality management, and supply chain management are viewed by organizations as part of their operations strategy. Results also indicate that a commitment to quality and an understanding of supply chain dynamics have the greatest effect on performance.
Sumario: In a time of shortening product life cycles, complex corporate joint ventures, and stiffening requirements for customer service, it is necessary to consider the complete scope of supply chain management, from supplier of raw materials, through factories and warehouses, to demand in a store for a finished product. Hewlett-Packard has developed a framework for addressing the uncertainty that plagues the performance of suppliers, the reliability of manufacturing and trasnportation processes, and the changing desires of customers. The author describes several cases in which entire product families have been reevaluated in a supply chain constext. The methodology he presents should help others to manage their own supply chains more successfully
The concept of virtual organization challenges the way industrial production systems are planned and managed. Basically, a virtual organization is temporary alliance of enterprises that come together to share skills and resources in order to respond better to business opportunities and whose cooperation is supported by a computer network. To support this paradigm, several research directions need to be applied, whose requirements and partial results are presented in this paper. The results are presented in the framework named Tehnonet (TN), which is partly implemented in Eesti Energia AS (EE). EE is a vertically integrated public limited company located in the republic of Estonia. The applications work on TN today covers the entire voltage transmission and distribution management in the Estonian Power System
The article gives the principles how to build up software for handling power network management, using the concept of enterprise resource management (ERM). The problem is analyzed in context of Eesti Energia AS. located in the Republic of Estonia.
In this paper, the author describes how the level of generation capacity connected to the UK's low-voltage distribution networks is set to escalate.
Creating Logistics Value: Themes for the Future
- R A Novack
- C J Langley
- L M Rinehart
Introduction to Supply Chain Management
- R B Handfield
- E L Nichols