A Review on Virtual Enterprise Models

In this chapter the most relevant and most discussed virtual enterprise models are introduced in a broader sense: the Supply Chain Management, Extended Enterprise, the Agile Enterprise/Manufacturing, the Virtual Enterprise/Virtual Organization, the BM_VEARM Agile/Virtual Enterprise and OPIM (One Product Integrated Manufacturing). At the end of the chapter a discussion is presented.

Performance Analysis

Chapter VII discussed how traditional Internet-based technologies could support Agile/Virtual Enterprise integration. Chapter VIII presented the specification of the Market of Resources as an enabler of this organizational model and Chapter IX introduced its development. This chapter discusses the ability of the Market of Resources to cope with the requirements of Agile/Virtual Enterprises and compares its performance with the performance of traditional Internet-based technologies. It starts with the explanation of the cost-and-effort analysis undertaken, based on the cost-and-effort models introduced in Chapters VII and VIII, followed by the parameterization of this models, by identifying its time constants. This chapter presents a comparative study of performance between the traditional Internet-based tools and the Market of Resources, based on the results of an analytical simulation of the cost and effort of the Market of Resources compared with the utilization of traditional tools in the support of A/VE integration. Finally it identifies the solution space where the Market of Resources presents more efficiency in A/VE integration.

Traditional Technologies to Support Agile/Virtual Enterprise Integration

Since the mid-nineties, a considerable number of research and development projects and industrial initiatives have been undertaken to define infrastructures and supporting functionalities for Virtual Enterprise integration (i.e., computer supported tools and environments to support any or all of the following functions of the VE life cycle: VE design, search, negotiation, selection and integration of resources into a VE, and coordination functions). Examples of such developments towards VE integration include: • Agent technology, a promising approach to support electronic market brokerage and electronic negotiation; and • Environments for virtual enterprise integration, as the electronic marketplaces, most of them supporting transaction facilities, negotiation and electronic contracting.This chapter explains how “traditional” Internet-based tools (WWW search engines, WWW directories, electronic mail and e-marketplaces) can be used to support some of the functionalities required by the A/VE model, analyses costs of subcontracting, and introduces a cost-and-effort model that traduces the activities of A/VE integration that can be undertaken with the support of these traditional tools.

Market of Resources

Electronic Marketplaces (e marketplaces) appear to be a promising solution to B2B e-commerce, however its role, as well as the role of other solutions we have identified that can be used to help or to partially support A/VE integration, must go beyond helping to identify suppliers, improving the efficiency of purchasing transactions, etc., as also confirmed by several credible analysts and information technology research sources. Simultaneously, and considering the perspective of the recent virtual enterprise models, we could not see any other environment to cope with its requirements than the integrated environments as the one we are proposing: a Market of Resources or similar solutions. In this chapter we analyze the context in which the Market of Resources appears, identifying favorable existing conditions and reviewing forecasts by credible analysts and consultancy houses, present a SWOT1 analysis, present some critical success factors associated with the exploitation of the Market of Resources, identify the targeted users, and finally explore some potential opportunities and expected benefits. This chapter also identifies the opportunities for the Market of Resources, presenting the e-marketplaces’ evolution, the failure of the first generation of e-marketplaces and presenting some research forecasts for B2B Internet-based transactions. In addition, it highlights the main strengths and weaknesses of the Market of Resources’ ability to support the A/VE model requirements and the main opportunities and threats associated to its exploitation, using a SWOT analysis. This chapter presents the set of critical success factors for the Market of Resources, their definition or explanation and the competitive advantage that each critical success factor confers. It identifies the target users of the Market of Resources and reflects on the opportunities and expected benefits presented by the creation of the Market of Resources to its targeted users and to the implementation of the A/VE organisational model. Finally, it presents some conclusions and future trends.

Requirements for Agile/Virtual Enterprise Intetgration

This chapter introduces the requirements for Agile/Virtual Enterprise (A/VE) integration, discusses reconfigurability dynamics and business alignment and proposes a virtual enterprise extended life cycle. The requirement of dynamic reconfigurability of the A/VE model is introduced in and the causes of reconfiguration needs are presented. This chapter also clarifies the concepts of basic resources and complex resources, and discusses concepts related with selection complexity, selection models and solution space dimension. It gives examples of reconfigurability dynamics, and introduces three dynamics parameters. The need of keeping the A/VE aligned with business requirements results in A/VE reconfiguration. The permanent business alignment of the A/VE requires a high reconfiguration dynamics. This chapter introduces a referential for A/VE alignment, involving the market opportunity (or the product required by the market), the A/VE project and the resources providers. It also presents the main functionalities that must be assured to support the implementation of the A/VE model. Finally, this chapter presents a new VE lifecycle, the Agile/Virtual Enterprise extended life cycle.

Business Requirements and Background

Before introducing the Agile/Virtual Enterprise organizational model and all the concepts underlying the topic of Agile/Virtual Enterprise implementation and management support, we need to introduce a business requirements analysis to help understanding the actual economical and organizational context we live in, and to justify the emergence of new organisational models. This chapter starts with a brief introduction of the role of enterprises and the market, followed by a characterisation of the actual economic context of strong competition, and the evolution of product life cycle in this context, and concludes with a the identification of the requirements for competitiveness and a business alignment requirements analysis.

Development o the Market of Resources

In earlier chapters we have presented the main information and communication technologies and applications that can be used to implement functionalities of the Market of Resources, namely Internet technology, Agent technology, Internet-based marketplaces, etc., and standards for integrability. Electronic Marketplaces aggregate a set of technologies able to respond to some of the requirements of the Market of Resources, which can be complemented with other technologies. This chapter introduces some technology that can support the development of the Market of Resources and discusses its utilisation, as well as presents a prototype developed to demonstrate the operation of some functions of the Market of Resources. This prototype is used later, in Chapter X, in the analytical simulation of the Market of Resources performance.

Information and Communication Technologies

“The introduction of reliable, low-cost electronic computers into the economy was the most revolutionary technical innovation of the twentieth century” (Freeman & Soete, 1997, p. 158). “The fact that a new technology has many potential applications does not mean that all of these will occur simultaneously, or even over a short period. On the contrary, the assimilation of a major new technology into the economic and social system is a matter of decades, not years, and is related to the phenomenon of long cycles in the economy” (Freeman & Soete, 1997, p. 184). This was what, in fact, Schumpeter (1939) suggested. The focus of information technology within organizations has shifted over the last thirty years, from improving the efficiency of business processes within organizations, to improving the effectiveness of the whole value chain. During the sixties and seventies, businesses focused on the use of mainframes to process large quantities of data. In the 80s, businesses focused on using personal desktopcomputers to improve personal efficiency. The last decade has seen the use of information and communication technologies to create electronic networks within and between organizations. The information and communication technologies (ICT) of today consist on advanced communication systems that, combined with advanced information technologies, allow the overcoming of time and space conditionings, by means of: (1) communication networks (telephonically, satellite, cable, etc.) that transport information, (2) basic services (electronic mail, interactive video) that allow the utilization of networks, and (3) applications (electronic commerce, electronic marketplaces, teleoperation, electronic business) offering specialized solutions for groups of users. Information and communication technologies and systems are the support of concepts as distributed systems, computer-supported cooperative work, electronic commerce, electronic marketplaces, teleoperation, virtual prototyping, concurrent engineering, telemedicine, telework, etc., most of which, more deeply or less deeply, are connected with the implementation of some of the emerging ICT-based organizational models, to which the present book is a contribution. In this chapter we present some of the main ICT and some ICT-based techniques and applications that can support and enable the new organizational models, in particular, that can support Agile/Virtual Enterprise integration. Addressed is the impact of the new information and communication technologies. This chapter also reviews some of the most relevant technologies that can contribute to support the A/VE model, and introduces relevant applications of these information and communication technologies, some of then considered of relevance to the implementation of the Market of Resources. Finally, this chapter addresses the issue of information integration, presenting recent developments.

BM_Virtual Enterprise as an Agile/Virtual Enterprise Model

Chapter III presents the BM_Virtual Enterprise (BM_VE) model, as an Agile/Virtual Enterprise, in total or partial conformance with the BM_Virtual Enterprise Architecture Reference Model (BM_VEARM) (i.e., as a dynamically reconfigurable network integrated over the global domain, satisfying the requirements for integrability, distributivity, agility and virtuality as the competitiveness factors). According to BM_VEARM, a virtual enterprise (VE) is “… an optimized enterprise, synthesized over a universal set of resources, with a real-time replaceable physical structure, and when the synthesis and control are performed in an abstract or virtual environment.” The importance of presenting the BM_VE is in the fact that VE, or Agile/Virtual Enterprise (A/VE), implementation and management is not possible without Market of Resources (MR), and similarly defined structures and/or organizations, as an external independent institution that would serve as an environment to support the VE dynamic integration, operation and reconfiguration, as well as “boost” to the networking (VE) dynamics, providing overcoming (i.e., minimizing) of the twofundamental networking disablers: (1) “transaction” (i.e., reconfigurability) costs, and (2) the VE partners’ knowledge and rights protection. Market of Resources is the third mechanism, or tool, that BM_VE, or any VE conceived as a dynamically reconfigurable enterprise network uses. It is an institution, or enterprise, operating as a meta-enterprise of the operating VE. BM_Virtual Enterprise uses three main mechanisms, or tools: Broker, Virtuality and Market of Resources. Broker is the agent of agility and virtuality. Virtuality as a tool is a specific organizational structure pattern that contributes to further improvement of agility/reconfiguration dynamics. The consequences of virtuality, as defined in BM_VE model (i.e., in BM_VEARM), are: (1) the hierarchical structure of VE, or A/VE, organization, (2) the Resource-centered Virtual Enterprise Definition (in a way the inverse definition of the “traditional” VE definitions), and (3) the virtualization process. The consequences of virtuality in BM_VE, following BM_VEARM, the Resource centered Virtual Enterprise Definition, and the process of virtualization, following BM_VE and BM_VEARM, directly implied by the (BM_VE) VE Extended Life Cycle, characterized by the “contractualization of the Market of Resources” environment, or a meta-enterprise for its (VE) implementation and management. BM_VE is a ubiquitous enterprise too. This is exactly because ubiquitousness is necessarily based on the Resource-centered Virtual Enterprise Definition. Market of Resources, and similarly defined environments, enable VE, or A/VE, to operate as a ubiquitous enterprise too. Ubiquitous enterprise, and VE as a ubiquitous enterprise, could be considered as the next generation (enterprise) organizations.

The Proposal of a Market of Resources

A review of VE integration-related literature reveals that although considerable research has been undertaken focusing on selection of cooperation partners, development of infrastructures (mechanisms and tools) to support VE management and coordination, insufficient attention has been devoted to the problem of creating the environment where these processes take place (i.e., the environment to enable an efficient and effective dynamic integration, offering strategies for dynamically align the virtual enterprise with business to support dynamic reconfiguration). The concept of A/VE we are addressing is broader, more embracing and more dynamic than the concepts of Virtual Enterprise or Extended Enterprise found in the literature, as these do not require the dynamic integration we defend for agility, and for which we propose the implementation of a Market of Resources. This chapter introduces the concept of a Market of Resources as an environment to cope with the A/VE model requirements (i.e., an environment for Agile/Virtual Enterprise integration and business alignment) identifying the relevantrequisites related with A/VE design and integration, and defining its participants. It also illustrates the technical requirements to support the Market of Resources and how exiting technologies support the main processes of the Market of Resources.