This special issue of Production Planning & Control (PPC) on Extended Enterprises in Changing Business Environments is constructed from the selected referred papers presented at the 2nd International Workshop on Supply Chain Management and Information Systems (SCMIS2004), hosted by the Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, 7–9 July 2004 in Hong Kong, and contributions from other researchers in the field of production planning and control. The workshop was jointly organised by The Hong Kong Polytechnic University, University of Cambridge (UK), Taiwan Lan Yang Institute of Technology, The University of Sheffield (UK), and University of Massachusetts, Dartmouth (USA). The workshop was sponsored by Taylor and Francis Group Ltd, Emerald Publishing Group, Group Sense (International) Ltd, Huawei Technologies Co. Ltd, L.K. Machinery Co. Ltd, and Department of Industrial and Systems Engineering at The Hong Kong Polytechnic University.
Today, practitioners of production and operations are challenged to solve complex problems with solutions that need to simultaneously satisfy a set of social, political and economic objectives. They need to address their evolving business landscape in formulating, designing and implementing competitive solutions in order to add value to their business. There has been a wide criticism about the current operations management researches, which have flourished on artificial laboratory settings with conditions of operations and assumptions that are much simplified and become unrealistic in the real world. A new paradigm of research is necessary to align the decisions of the operations manager to the changing business environment. In short, operations managers demand a broader scope of research in order to help them propel business growth. One emerging area is the organisational concept of extended enterprise. Operations managers must understand their role in relation to the development of the extended enterprise. Studies on extended enterprise are still at its infancy. Practical cases are necessary to develop in-depth understanding of this topic of study. Studies in extended enterprise have been related to a number of associated topics that managers must consider in relation to their own production and operations context.
The aim of this special issue is to investigate the critical issues and roles of a new paradigm—extended enterprise in changing business environments. Theory building and empirical study papers that have strong relevance to the practical world were welcomed, as well as case studies and papers with best practices experiences. This special issue contains nine papers discussing a range of advanced and contemporary concepts, methods, tools and models for extended enterprise environments. A mix of theory building and empirical study papers that have strong relevance to the practical world are available. The acceptance of all papers in the special issue followed the normal PPC review guidelines. We provide a brief overview of the papers which appear in this issue.
The paper, ‘Development of an extended enterprise performance measurement system’ by Folan and Browne, discusses the development of a performance measurement system specifically designed for the requirements of the extended enterprise, via two performance measurement frameworks: the structural extended enterprise balanced score card; and the procedural framework for the selection and implementation of measures. The extended enterprise balanced score card offers a four-perspective framework, to be implemented at each node, that provides a generic structure for the management of performance measures in the extended enterprise; while the procedural framework operates at both the local and holistic levels, to provide a step-by-step generic process towards performance measure selection and implementation. When combined, the two frameworks produce the basic extended enterprise performance measurement system, which was subsequently tested at a first-tier supplier in the European automotive industry. The characteristics of the extended enterprise are taken as a given starting point, and the paper concludes by pointing out the need for extended enterprise performance management to balance the developments outlined here.
Dimitriadis and Koh, in their paper ‘Information flow and supply chain management in local production networks: the role of people and information systems’, study the interrelationships of people and information systems in supply chain management using the local production networks concept, which was adapted to small- and medium-sized enterprises (SMEs) in Greece. Thirty semi-structured interviews were conducted, and major findings suggest that localised production systems are complex economic entities. It is found that most of information needs are external and are acquired mainly through informal contacts with personal sources. It is suggested that leader firms should play consciously and actively the role of the network caretaker facilitating the flow of information wherever and whenever needed internally and that other production units should develop their own links in order to be sure that important information is not ignored by the network.
The paper, ‘E-organisation and its future implication for SMEs’, by Azumah, Koh and Maguire, stress that e-organisations are expected to be one of the promising organisational forms in the Internet cultural era (ICE). It is empirically debated that most traditional organisations are evolving towards becoming e-organisations. Their work focuses on the use of network technologies and information and communication technology (ICT) by SMEs in their current business environment. Through a literature review and interviews, they discovered various options for managing the organisational transformation, and its effects, to ascertain the appropriate strategies within a range of SMEs. Their major findings suggest that the SMEs’ journey towards becoming e-organisations can be classified into three stages: 1/2-fusion, fusion and the ultimate e-organisation stage. Based on this work, strategic solutions were proposed for future SMEs intending to adopt Internet and other network technologies.
Chung and Leung, in their paper, ‘Collaborative planning, forecasting and replenishment (CPFR): A case study in copper clad laminate industry’, argues that the CPFR process is a powerful tool with which to enhance the co-operation between partners from upstream to the vendor/suppliers and downstream to the customer. They tested the CPFR process in the Hong Kong copper clad laminate industry for validation in a manufacturing field. This is new in the sense that most of the previous CPFR pilot cases were carried out for the grocery industry, an industry very different to the copper clad laminate industry. A modified model for implementing the CPFR process that considers engineering change control is proposed to account for the differences.
The paper, ‘Business-to-business integration – The mediating effects of network structure and network atmosphere’, by Wang, Heng and Ho, critique the literature that research in interorganisational information systems (IOS) for business to business (B2B) e-commerce tends to focus on the factors that lead to adoption of these systems. They claim that the literatures fail to consider one important factor, that is, the IT capability of a network member of a supply chain, and the link between this factor and the intention to adopt. Using a critical approach to the review of the literature, they examine the structure, dynamics and complexity of the link between them. They suggest six mediating factors between IT capability and its intention to increase the sophistication of its business-to-business integration (B2Bi). A relational model of network atmosphere and network structure, which between them encompass these factors, is proposed.
So and Chung, in their paper, ‘Mobile IT infrastructure in value network development: A case study of property management business’, notes that mobile technologies allow users to be easily accessible, and let them access information and services regardless of location or time. It is suggested that enterprises will gradually adapt the mobile solutions to add value to their customers and increase the productivity of their employees. They designed a framework making use of disruptive technology for adoption in a business-to-business context. Also, a mobile IT infrastructure that link up different enterprises together, to allow a group of firms to behave like an extended enterprise, for performance improvement and securing benefits, was developed. A case study of a residential property management company is used to demonstrate the applicability of mobile IT infrastructure to create business solutions for addressing evolving customer needs.
The paper, ‘A virtual warehouse system for production logistics’, by Fung, Cheung, Lee and Kwok, suggest that the traditional inventory planning generated by an advanced planning and scheduling system is inadequate to handle the effect of variability, non-linear relations, and other sudden factors in product demand. They present a virtual warehouse system (VWS), which is capable of refining inventory planning and streamlining product planning and control during sudden changes in product demand. It can also serve as an advisory tool for supporting decision making and monitoring the inventory allocation of WIP when supply shortage occurs. The VWS is based on the concept of the postponement of product differentiation, a simulation model and knowledge-based system. The inventory, originally planned for current and future demands, will act as a buffer to reallocate and fulfil any sudden demand. The flexibility of inventory stirring is one of key significance in this study. A prototype VWS is built and a successful trial implemented in a prestigious manufacturing enterprise. The results show that the inventory level across the supply chain among different parties can be minimised and the manufacturing enterprise is more predictable and adaptable to any abrupt change in product demand.
Jiao, Zhang and Pokharel, in their paper, ‘Coordinating product and process variety mass customized order fulfilment’, argue that the traditional mass production offers limited variety of products, in which order processing mostly concentrates on the acquisition of customer needs, and support to sales. With mass customisation, the fulfilment of customised orders involves frequent design changes and recurrent process variations due to product differentiation. It is imperative to manage the complexity of the variety associated with customer orders, product design and production planning. In this work, they adopt a holistic view of order fulfilment, encompassing sales, design and production. The principle of collaborative product and process variety management is presented. They also developed a co-ordination mechanism of variant handling based on the specification of variety handlers and their states. A product-process variety grid is introduced to unify product data and route information. In addition, they proposed a coding-based system for effective variety management and outlined a Web-based collaborative platform to support distributed order fulfilment among multiple functional departments.
The paper, ‘Emergence of global manufacturing virtual networks and establishment of new manufacturing infrastructure for faster innovation and firm growth’, by Shi and Gregory, introduce some typical case studies in electronics, bio-technology, home electronic appliances, and leisure apparel industrial sectors in order to demonstrate the background to, and driving forces of, manufacturing's transformation towards the global manufacturing virtual network (GMVN). The field work method was used and the results suggest that the GMVN—a new manufacturing architecture—has many distinguished characteristics. It is a promising example of the potential manufacturing configurations which could be used in a collaborative infrastructure, supporting ICT in order to address dramatic forthcoming changes in an increasingly fragmented market environment. The GMVN provides a new platform that engages developing countries’ manufacturing firms to play complementary roles and to be integrated into a global supply chain.
We could not have done this special issue by ourselves and we totally appreciate the efforts and support of all who were involved in making it possible, which includes the authors, the referees who reviewed the manuscripts, the editorial staff of Production Planning & Control and especially the editor of the journal.
Acknowledgments
S. C. L. Kho
is a Deputy Director of MBA in EcoBusiness and a Lecturer in Quantitative Methods and Management at The University of Sheffield, Management School, UK. Her research interests include production planning and control (particularly in MRP, MRPII and ERP), uncertainty management, modern operations management, logistics and supply chain management, e-business, e-organisations and sustainable manufacturing. She has published widely in various international and national academic journals and conferences. She is the Associate Editor of the International Journal of Operations Research, an editorial board member of the International Journal of Logistics Systems and Management and Benchmarking: An International Journal, serves as a chairperson and on the board of committee of various international conferences, and as a referee for several international journals in these disciplines.
Walter W. C. Chung
is an Associate Professor at the Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University. He graduated in Industrial Engineering and received his MBA from UNSW Australia. He is the Programme Leader of MSc in Industrial Logistics Systems. His research interests are in information systems and knowledge management for e-business. A recipient of the President's Awards for Achievement 1996/1997: Research and Scholarly Activities, he has successfully supervised research students up to PhD level and published numerous research papers. He is a member of the editorial advisory boards of international journals and is currently the Asia Pacific Editor of Business Process Management Journal. He has been successful in research grants (HK$7.1 million) and is active in consulting with business and industry. He is the Project Director of the Teaching Company Scheme for a couple of companies.
Angappa Gunasekaran
is a Professor of Management in the Charlton College of Business at the University of Massachusetts, North Dartmouth, USA. Previously, he has held academic positions in Canada, India, Finland, Australia and the United Kingdom. He has a BE and a ME from the University of Madras and a PhD from the Indian Institute of Technology. He teaches and conducts research in operations management and information systems. He serves on the editorial board of 20 journals and edits journals. He has published about 170 articles in journals, 60 articles in conference proceedings and two edited books. In addition, he has organised several conferences in the emerging areas of operations management and information systems. He has extensive editorial experience that includes being the guest editor on many high profile journals. He has received outstanding paper and excellence in teaching awards. His current areas of research include supply chain management, enterprise resource planning, e-commerce, and benchmarking.