Future manufacturing systems—Towards the extended enterprise

The role and attributes of manufacturing companies in virtual supply chains

Purpose

– The purpose of this paper is to identify the role and main attributes of manufacturing companies which operate in virtual supply chains.

Design/methodology/approach

– In order to identify the role and main attributes of manufacturing companies enabling to operate in a virtual supply chain, a three-step statistical analysis was employed, namely exploratory factor analysis, hierarchical cluster analysis and non-hierarchical clustering technique.

Findings

– The findings show that virtual supply chain operations would not be supported by manufacturing companies offering highly customized products achieved by a unit production, developed in details and engineered to order. On the contrary, the large manufacturing companies of virtual supply chains report a high level of flexibility stemming from a wide scope of more standardized products offered to the market. The conducted study show that better ability of manufacturers supporting virtual supply chains is not industry specific.

Research limitations/implications

– The list of investigated attributes is not complete, and other characteristics of manufacturers in virtual supply chains should be identified. Another important shortcoming of the study is its quantitative character and generalization of the findings. Each “virtual” environment in supply chains may be unique and some of the compared characteristics may differ significantly. Therefore, the aforementioned attributes should be considered separately with a conscious focus on the environmental context. The quantitative study may be greatly enhanced by applying the case study approach, showing detailed solutions and practices, and thus making the study more valuable from the theoretical and managerial standpoints.

Practical implications

– The conducted study showed that better ability of manufacturers to support virtual supply chains is not industry specific, since the branch of electronic products and electrical equipment and components was represented by an equal share of manufacturers, both in non-virtual and virtual clusters. Furthermore, in order to operate in virtual supply chains, managers should pay attention to the structure and range of products delivered to the market. The managers should also be aware that apart from considering cost and efficiency, operating in a virtual supply chain environment also requires quality of products and processes in order to manufacture and deliver a superior value for the customers.

Originality/value

– Having recognized major groups of indicators demonstrating the level of ability of manufacturing companies to operate in a virtual supply chain, the attributes of three clusters of manufacturers possessing different bunch of features, significant for virtual supply chains, have been distinguished.

Industry-Wide Supply Chain Information Integration

Experiences from enterprise-wide integration initiatives during more than four decades indicate that industry-wide information integration could render substantial benefits. Two ways in which industry-wide integration differs from enterprise-wide integration are that there is no common management level and the economic units in the integration are the constituent units, not the industry. Management involvement has been emphasized as perhaps the most critical success factor for enterprise-wide information integration. The common economic unit enables increased costs in one part of the organization to lower the total cost in the company as a whole. In this article the authors address which consequence these two differences have for the development of information integration in four industry-wide supply chains. The authors find the existing methods for enterprise-wide information integration, such as BPR, virtually impossible to apply on industrywide information integration and that the disjoint economic responsibility is a hampering aspect in reaching potential benefits of industry-wide information integration.