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Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
Nowadays, in a hotly competitive environment, enterprises are continuously trying to provide products and/or services to customers faster, cheaper, and better than competitors do. Managers have learned that they cannot do it alone; rather, they must work on a cooperative basis with other enterprises in order to succeed. Although the resulting enterprise networks are more competitive, the tasks for planning, management and optimisation are much more difficult and complex.
While alliance like enterprise networks with the underlying supply network represent tremendous business opportunities, they also make the involved enterprises face greater uncertainties and risks. Firstly, networks or some of the underlying supply chains have to be modified or dissolved once the business opportunities evolve or disappear. Secondly, changes or major perturbations at one enterprise may propagate through the whole network to other enterprises and hence influence on their performances. The evolvement from single enterprise with a high-vertical range of manufacture towards enterprise networks offers new business opportunities especially for small and medium enterprises (SMEs) that are usually more flexible than larger enterprises are. However, in order to be successful, performances and expected benefits have to be carefully evaluated and balanced in order to become a partner of the right network for the right task. All these issues have to be taken into account in order to find an efficient, flexible and sustainable solution. In the area of production, these networks involve transformation processes from raw material through several stages of manufacturing, assembly and distribution to finished products, which are finally delivered to customers. It also includes flow of information and finance in addition to the material flow. Each stage of material transformation or distribution may involve inputs coming from several suppliers and outputs going to several intermediate customers. Each stage may involve information and materials flow connected with some intermediate and distant stages.
The underlying networked enterprises (supply chain networks) are complex and their analysis requires a carefully defined approach. Moreover, as technological complexity has increased, supply chains and thus such production networks have become more dynamic and complex to handle. Consequently, it is easy to get lost in details and spend a large amount of efforts for analysing the supply chain without meaningful results. Another issue coming along with the design and management of enterprise networks is the great variety of available policies and alternatives for each of these problems (design and management), by the need to assess complex trade-offs between conflicting objectives (cost, product quality, delivery time, etc).
The Guest Editors would like first to thank all reviewers for providing in-depth comments and constructive criticisms, and the authors for contributing their high-quality manuscripts. Without their help, it would have been impossible to produce this special issue. Finally, the Guest Editors extend their thanks to I*PROMS partners, a network of excellence for innovative production machines and systems funded by the European Commission under its Framework 6 Programme. The Guest Editors hope that the results of the efforts will be enjoyed.
Hence, a comprehensive and efficient strategic design of enterprise networks requires the determination of:
The number, location, capacity, and type of manufacturing plants, warehouses, and distribution centres to be used.
The set of suppliers to be engaged.
The transportation modes to be used.
The quantity of raw materials and finished products to purchase, produce, store and transport among suppliers, plants, warehouses, distribution centres, and customers.
All the decisions listed above are not trivial, especially at the international level and have to be taken under consideration of uncertainties and risks in order to come to network configurations that are not only efficient but also robust. This special issue is dedicated to such emerging issues in management of networked manufacturing enterprises. More emphasis will be given to the papers describing theoretical results with applications.
Overview of the papers included in the special issue
We have encouraged authors to submit their papers with both theoretical and practical implications. We have selected six papers after a peer blind review process.
The new competition is a major upheaval that is affecting every aspect of how networked enterprises (supply chain networks) organize and operate. Moreover, we are in the midst of a fundamental revolution in the nature of business and therefore if an individual enterprise want to thrive in this new landscape, it has to understand how supply chain networks work and how you can make them work better. enterprise resource planning (ERP) systems are increasingly becoming commonplace in the SME sector and are being viewed as one of the prime ways to achieve competitive advantage and to reengineer processes. Over the past few years, the number of large enterprises buying new ERP systems has reached saturation point. This has led to the ERP developers seeking instead other potential markets among SMEs. The made to order (MTO) scenario within the SME sector is one which is very capricious in terms of demand forecasting, lead times, routings, etc. When selecting a system, an organisation in such a segment needs a tailored methodology and a list of key target areas to consider.
The first paper from Aman Deep, Peter Guttridge, Samir Dani and Neil Burns presented the findings of research carried out as part of an industrial project for selection of an ERP system in a MTO SME scenario. It develops a framework or methodology for selection. It also highlights the areas pertaining to the unique needs of firstly, the SME sector and secondly, the MTO sector, to be considered while selecting a solution. A work book was developed to provide a structured ERP software selection process for SMEs using a comprehensive literature review plus practical experience. This research is potentially aimed as being useful to other SME's as a guide for a structured selection process.
Analyzing knowledge management initiatives in manufacturing enterprises becomes of major interest as it is relevant to further explore how this initiative can help optimize production processes and integrate operational requirements with enterprise-level decision-making processes as well as it can add value to customer in the industry at various stages of value chain such as exploration, inbound logistics, technological operations and outbound logistics.
The second paper from María P. Salmador and M. Angeles Palacios presented the process followed to build a knowledge vision in the enterprise, the first stages of the initiative, the development of new projects, and the lessons learned resulting in the creation of a knowledge management unit, a working model, a strategy, and a set of different projects that were on the basis of the competitive advantage of the enterprise. The perspective proposed in this research should be viewed with some caution, because of the methodological limitations of the present study as we drew on detailed descriptions of one enterprise. The extent to which the local explanation presented develops into a more general framework depends on how well it, or its descendants, explains the “phenomena” in future work. Their research methodology is an in-depth case study. The empirical data were collected from an international oil- and gas-manufacturing enterprise operating in more than 30 countries and leader in Spain and Argentina. The purest form of a longitudinal field study, daily participant observation, was feasible as one of the authors is an executive at the firm studied. The purpose of their research is to study how managers in manufacturing firms approach the challenge of knowledge management in their enterprises.
The emergence of new manufacturing technologies, spurred by intense competition, will lead to dramatically new products and processes. New management systems, organizational structures, and decision-making methods will also emerge as complements to new products and processes. The third paper from Jain and Benyoucef has attempted to investigate technologies, systems and paradigms for the effective management of networked enterprise (supply chain networks), especially long supply chains. In doing so, they not only presents an exhaustive literature review to identify the complexities, gaps and challenges associated with long supply chains but also the emerging enabling technologies to support these gaps and challenges. This research work highlights the research issues and discusses the key enabling features, which will need to evolve, and perfected in industry in the future manufacturing networked enterprises and especially long manufacturing supply chains.
Virtual organisations (VO) in manufacturing represent a promising approach for dealing with today's difficult markets. The selection of the right partners during the creation phase is a prerequisite to their success. Owing to the complexity of the underlying networks as well as the need to react immediately to market opportunities, tool support is necessary for finding a suitable consortia for a given business purpose while reducing the immanent risk of failure. The fourth paper from Carl Hans exemplified the conception and realisation of such a tool. The paper presents an overview of technical approaches supporting partner identification during the establishment phase of VOs. It describes a concept for a simulation environment addressing the needs of practitioners from industry. Finally, it depicts necessary extensions for model verification and solution finding. The approach taken in this work consists of four steps: first of all, the requirements to be fulfilled by the tool are derived from the main characteristics of VOs. Subsequently, existing approaches which could serve as a technical basis for the tool are presented and ranked. To conclude, a tool design is introduced and applied to a brief case study.
One of the processes which greatly influences decision making within a enterprise is forecasting demand. Nonetheless, demand is one of the greatest sources of uncertainty which enterprises face, so much so that many of these enterprises end up resigning to working with forecasts with numerous errors. Most enterprises know that their forecasts are inexact, but do not know how to solve this problem. Inaccurate forecasts forces enterprises to find ways to compensate for the uncertainty, and the most often used method to achieve this is by building inventory.
The fifth paper from Raul Poler, Jorge E. Hernandez, Josefa Mula, and Francisco C. Lario proposed an overall model of collaborative forecasting for networked manufacturing enterprises. A collaborative forecasting model for networked manufacturing enterprises has been proposed and validated by means a simulation study. This model significantly reduces the inventory levels of the whole network and improves customer service. A structured model has been proposed for the collaboration among firms of a network in the demand forecast and production planning settings. The collaborative forecasting model proposed may be applied node-to-node since it is not necessary that the entire enterprise network participates in the process. This fact facilitates the implementation of the collaboration model and the progressive spreading across the non-collaborative firms. The simulation experiments in a hypothetical enterprise network have allowed to quantitatively assessing the impact of collaboration on customer service and inventory levels. These experiments demonstrate that, even in an enterprise network with low-forecast errors, the communication of demand plans between clients and suppliers significantly reduce the safety stock levels and increase the customer service.
Looking at the huge demand supply gap that persists in Indian edible oil industry, attention needs to be given to boost the productivity of oil sector. Improving agricultural productivity to produce more oilseeds per hectare is beneficial, productivity improvement in the supply chain which includes the oilseed processing sector and its economic reach is also essential. Waste removal from the oilseed processing sector is one key to improve the productivity of sector.
The sixth paper from Dinesh Seth, Nitin Seth and Deepak Goel identified and address various wastes in the supply chain of edible cotton seed oil industry, (specifically processing side) using VSM approach to improve productivity and capacity utilization in Indian context. Critical observations and interviewing techniques were used with open-ended questions to understand the processes involved in the value chain of cottonseed oil industry. Different chain links/members were investigated through personal visits and discussions. VSM is applied as an approach on the industry to identify and remove non-value adding activities. Major findings obtained from the study are:
There is excess cumulative inventory of 244 days in the whole supply chain.
Industry is highly fragmented with large number of small players present which hampers the use of economies of scale.
There are non-values adding activities present in the supply chain such as moving of cottonseed oil from expeller mill to refinery.
The industry still uses outdated old technology which hampers the productivity.
Replication of such studies in other oil seed producing and processing countries will be very useful as the concept of VSM is rarely applied to study edible oil processing and its supply chain.
As mentioned, the contributions cover both aspects of theoretical and practical development regarding the management of networked manufacturing enterprises. It is hard to draw precise conclusions and trends across the papers included in this special issue, but there is no doubt that the papers elaborate and refine many of the trends presented in the introduction of this note. As guest editors, we are very satisfied both with the quality of the papers presented in this issue, and with the relevance on the themes we hoped to put focus on via this special issue.
Vipul Jain and Lyes Benyoucef with David BennettGuest Editors