A networked engineering portal to support distributed supply chain partnership

A networked engineering portal to support distributedsupply chain partnershipD.LIU*,C.ROBERTO BOER,M.SACCO and R.FORNASIERO Institute of Industrial Technologies and Automation,National Research Council,Via Bassini 15,Milan,ItalyIn this paper,the authors discuss the latest advancement of supply chain management (SCM)that leads to the development of a networked supply chain partnership (SCP).A deep insight is given into the nature,motivation and implementation of the SCP as a value-added component in the forefront of SCM.The role of the Internet in SCP is examined,and the current situation of SCP in China is pared with available e-portals in the global market,a web-based DRAGON Engineering Portal (DEP)across geographical borders and cultural barriers is proposed to support European and Chinese industrial partners in developing strategic manufacturer–supplier partner-ships.E-partnering and cultural repository are in-built to support a dislocated supply chain partnership for collaborative product development,starting with the location of partners and the implementation of contact initiation.Keywords :Supply chain management;Networked supply chain partnership;Web-based engineering portal;E-partnering;Contact initiation;Collaborative product development1.IntroductionAs the economy changes and competition becomes more global,it is no longer company pany,but supply chain versus supply chain (Stanley 2001).In the new millennium,many challenges have appeared in global supply chain management (SCM),and there has been tremendous pressure to innovate within SCM research in order to meet worldwide demand.Over the past decades,much literature has been dedicated to SCM discussing cost reduction,profit making and business growth,the Internet in SCM activities such as production scheduling,order processing,purchasing,transportation,customer service,and so on.However,little attention has been paid to the Internet-based supply chain partnership (SCP).Although the joint value through networking and customer–supplier partnering is more or less envisioned by many manufacturing companies,what is less understood (Mo ller 2002)is the more complex partnering targeted at generating innovative products.Strategic partnering in order to develop new products (Murray 1996)is another complicated issue beyond these various strategic alliances:mergers,acquisitions,joint ventures and consortia.However,partnering has been suggested as the best solution for making the most of supplier relationships (Gadde 2000),because suppliers represent the most important assets of a company and should therefore be treated as a type of investment,beyond delivering reasonably priced items on request.In today’s manufacturing,the competitive advantage (Lewis 1995)no longer resides with a company’s own innate capabilities,but rather with the relationships and links the firm can forge with external organizations.It is not hard to discover that many manufacturing companies within a supply chain have stipulated their cooperation strategies with existing partners,but the same companies lack efficient methods or tools to help find new relevant suppliers in a worldwide context in order to build an extended supply chain for collaborative product development.DRAGON (development of an interactive engineering portal for open networks)(Grabowski et al .2001a,2001b,2002)is an ongoing EU–China project (2001–2004)under a strong project consortium consisting of eight European and*Corresponding author.Email:d.liu@r.itInternational Journal of Computer Integrated Manufacturing ,Vol.19,No.2,March 2006,91–103International Journal of Computer Integrated ManufacturingISSN 0951-192X print/ISSN 1362-3052online ª2006Taylor &Francis/journals DOI:10.1080/09511920500090354four Chinese research and industrial partners.It aims to provide a DRAGON engineering portal(DEP)to inter-nationalize and computerize the processes offinding new relevant suppliers,establishing strategic supplier partnering and integrating approved new suppliers into the collabora-tive product development.The engineering portal is innovatively to support the collaboration between dislo-cated partners who have common engineering tasks.DEP represents a virtual,process-and data-oriented integration platform accessible to the companies involved with hetero-geneous information technology(IT)infrastructures.This paper willfirst review the recent developments within SCM.To establish a distributed supply chain partnership has been found to be one of the value-added research themes.DRAGON is presented to address the vital importance of a networked supply chain partnership within an existing supply chain and along an extended supply chain at the global level.The full purpose of DRAGON is not only targeting the Chinese market but also attempting to provide a general template for best practice throughout the world.By thoroughly examining a number of existing e-Portals in the global market,the innovative architecture of DEP is proposed and the main functionality of the engineering portal is constructed in order to establish a collaborative partnership along the supply chain.The whole process of SCP is started with the contact initiation,which involves the location of potential partners,pre-selection and eval-uation of candidate partners,negotiation of supplier partnership and strategic collaboration,in addition to new product development.Particularly,DEP incorporates a culture-specific support to smooth inter-communication, with an individual request function provided for company-oriented solutions,and highlighting the huge potential Chinese supplier market.2.Developments in SCMSCM is becoming an important management discipline in the current world economy.Considered to be the last frontier of cost reduction in1965(Richard2000),SCM is now positioned at the forefront of business planning to enable reliability in delivering innovative,high-quality, low-cost products on time.SCM is the collaborative effort of multiple channel members to design,implement and manage seamless value-added processes to meet the real needs of the end customer (Stanley2001).Today’s companies that learn how to improve the management level of their supply chain will to a large degree become the new success stories of the global marketplace.To identify the failures and weaknesses in the existing supply chain process and performance should be thefirst step,while mastering new challenges and emerging opportunities in the area of SCM(Boe r et al.1999,Richard2000,Keah2001,Liao2001,Stanley2001, Fornasiero et al.2002,Paul2003)is of critical importance:1.accurate forecasts of supply chain requirements;2.optimal supply chain design;3.agility over the supply chain;4.supply chain performance measurement;5.customer-focused corporate vision;work support in SCM activities;7.integration of SCM into new product development;8.strategic supply chain partnership.Until now,the supply chain operations reference(SCOR) model(SCC2003)has been developed and endorsed by the Supply Chain Council(USA-SCC2003)to standardize descriptions of management processes and metrics in order to measure the operational performance,features and functionalities of software solutions.SCOR is structured byfive distinct management processes:Plan!Source! Make!Deliver!Return,which span all supplier–customer interactions,all physical material transactions and all market interactions.However,SCOR does not include(USA-SCC2003)technology development pro-cesses or product and process design and their development processes.This implies that research efforts on integrating SCM into new product development and developing strategic supply chain partnership lack the corresponding SCOR support.It is worth noting that,SCM at the stage of product design and development is always ignored,although the design value is very high in the lifecycle of a new product (Liao2001).The following paragraphs summarize the major changes over the past decades as SCM has evolved towards a strategic SCP for new product development. Prior to the1970s,mass production with little product and processflexibility was considered the primary opera-tion strategy.New product development was,however, very slow because most manufactures relied exclusively on in-house technology and capacity(Keah2001)and regarded it as too risky to share technology and expertise with customers or suppliers.In the1980s,intense global competition alerted manufacturers to the need to improve SCM by turning the simple,reliable buyer–supplier rela-tionship into a kind of strategic and collaborative buyer–supplier partnership.Since the1990s,integrating enterprise resources along the value chain has become a focus not only for logistic problems but also for strategic suppliers. Manufacturers commonly exploit supplier strengths and technology in support of new product development. Professor Hau Lee(2000),the director of Stanford Global Supply Chain Forum,pointed out that effective SCM should start with the optimal design of the products and processes in the era of the Internet.The early involvement of suitable suppliers at the stage of product92 D.Liu et al.design and development will undoubtedly lead to innova-tions in design choices and development processes by sharing advanced design and development technologies. With more and more enterprises extending their boundaries to form network allies,integration of SCM into new product development is becoming a reality.3.Supply chain partnershipAmong the possible obstacles that can cause a supply chain to fail,the authors have noticed that relatively high instability,a comparatively large number of chains on the customer side and the absence of market power play an important part.Moreover,it is important to shed light on the following problematic aspects:1.the lack of mutual trust and true cooperation;2.the lack of awareness of the relationship betweeninternal and external chains and physical andinformational chains;3.the heterogeneous technology used for communica-tion.Most available supply chain literature in recent decades focuses on the logistic aspects of supply chain and on the maximization of customer satisfaction.The intangible benefits from building constructive supplier relations and from improving current,less than satisfying supplier relations to reap a joint effort are much less mentioned. Although,many American and Europeanfirms began to be aware of the advantages of sharing technology and information with other companies and thus reducing uncertainty and risks,many manufacturing companies that work in partnership with their customers and suppliers still care mainly about the performance of existing partners,but overlook the significant importance of developing colla-borative and strategic SCP to improve the whole efficiency of their supply chain.Maloni(1997)stated that the supply chain for many successfulfirms has matured from an adversarial relation-ship to one of supply chain partnerships.Especially for small and medium size enterprises(SMEs),there is a need to formulate strategic aims and develop a sort of strategic alliance,namely,a supply chain partnership that is a relationship formed among independent entities in supply channels to achieve specific objectives and benefits as well as to share possible risks.The genuine motive of SCP should be to secure long-term benefits based on bilateral trust,openness and communication(DigitalTrading 2003).It is distinguished by activities such as negotiating levers that are not only price or delivery or quality,sharing production forecasts,developing joint marketing and product strategies,exchanging stafffor training pro-grammes,harmonizing IT and so on.With the current push toward external integration with both suppliers and customers,and with the advanced IT to strengthen competitive advantages,today’s manufacturers are looking for new reliable suppliers to work cooperatively on providing improved service,technological innovation, new product development,mutual planning and problem-solving efforts.3.1.A survey of SCP in ChinaAt present,industrial companies are pursuing an agile manufacturing pattern that addresses the provision of a higher quality product to respond to the market within the shortest time and at a lower cost but with the customer needs well met.From this point of view,dislocated product development and manufacturing in a country where it has a local market is of vital importance.To have local partners enables a better sense of how to develop products for the local market,to make better use of local resources and to achieve a better communication with local customers and suppliers.On the other hand,developing countries like China really need to import advanced product design technologies and modern SCM patterns from developed western countries.The mutual demands are calling for a reliable and effective strategic alliance which enables a true win–win supply chain partnership.Recent literature reveals that Chinese manufacturing companies communicate more with customers than suppli-ers,that is the downstream relationships between com-panies and their customers are closer than the upstream relationships between companies and their suppliers.In China,the relationship with customers is significantly correlated with the index of company performance(David 2000),while consulting suppliers about new product devel-opment is associated with poor performance and partial complication in supply chain management.Although SCP might be considered less valuable to a company when there is little new product development or the new product does not rely on a particular supplier,it should be realized that global manufacturing competition stresses the shortest delivery time and the best delivery performance that could hardly be achieved without full use of global resources and a timely share of product develop-ment technologies.This is extremely valuable for China whose economy has been booming with joint ventures. Anthony Anderson(2003),the executive director on the directorate board of Olimex Limited(an international top-class cookware company)expressed his genuine motive to cooperate with China,‘what we are seeking is not only a supplier but a long-term partner.Our goal is to realize sustainable collaboration and development.This kind of collaborative partnership is of course much closer than the common sense of buyer–supplier relationship because we invested in Chinese factory’.A networked engineering portal93With the purpose of helping industrial partners establish global supply chain partnerships,DRAGON is on the way to bridging Europe and China,but not only China,by supporting business partners in establishing strategic and multi-cultural SCP.Since Chinese industrial partners are involved in the project for improving portal services, offering validation cases and promoting the dissemination offinal research results,DRAGON enables the portal to be in a real sense a cross-cultural paradigm for dislocated engineering collaboration between European and Chinese industrial partners.3.2.SCP implementationIn general,the fundamental steps to implement the supply chain partnership consist of:1.investigating strategic needs for partnership;2.developing partner criteria;3.hunting for potential suppliers;4.pre-selecting and evaluating candidate suppliers;5.establishing the formal partnership;6.maintaining,refining or dissolving the partner-ship.The entire process implies many elements critical to the success of the SCP.Two rudiments(Maloni1997)that must be done well in supplier partnering are initial strategic analyses and the selection of proper suppliers.In the initial phase of strategic analyses,some barriers which will make a lot of sense might include both social/ cultural/attitudinal and procedural/structural factors.In addition,a series of selection criteria should be taken into account to evaluate potential supply chain partners,such as strategic planning,financial stability,technology capability, profit benefits,management philosophy,cultural compat-ibility and so on.Intense interaction and the necessary documentation should normally be a‘must’in this phase of partnership establishment.The maintenance phase cannot be over-looked because it concerns a variety of important elements such as mutual trust,reciprocal collaboration goodwill, management skills,performance measurements and the like.Considering the possible difficulty in achieving a successful SCP,the dissolution of the supply chain partnership may be necessary if selected companies are unable to pass through the critical steps of partnering or accomplish the synergies during the cooperation.3.3.The role of the Internet in SCPSupply chains are at the initial stages of a startling reinvention triggered by the rise of the Internet(David 2000).The Internet provides supply chain activities with valuable opportunities for cost reduction and service improvements(Richard2000),for example,creating on-line vendor catalogues,tracking trades and goods trans-portation,dealing with customer queries or complaints and technical issues,processing orders,providing around-the-clock customer service,communicating and negotiating with suppliers.The Internet has been considerably exploited in managing supply chain operations,and will dramatically increase the profitability of industrial companies.As the Internet changes the way in which supply chains work,the information,decisions and processes that form supply chain management are moving to the web across inter-company boundaries(David2000).Since the web is capable of supporting information sharing,joint decision-making and effective coordination between business partners,the establishment of strategic alliance among distributed supply chain partners becomes possible.As the ultimate goal of supply chain partnership is to promote new product development through Internet-enabled collabora-tion,a web-based corporate portal like DEP is needed to work as a technical platform for dislocated business partners to establish strategic SCP and then carry out the collaborative product development.4.Web-based corporate portalThe term‘web portal’was adopted to refer to a search engine,the main goal of which was to facilitate access to information contained in documents spread throughout the Internet(Dias2001).More recently,with the evolution of the information age,the web-based corporate portal(WCP) has been studied as a tool that implements the whole information collecting process,reading and retrieving through Boolean search,categorized navigation,persona-lization and integration of additional features providing direct access to other specialized information and commer-cial worlds(Reynolds1999).WCP has several different terms such as‘corporate information portal’,‘business portal’and‘enterprise information portal’,which are used interchangeably as synonyms(Reynolds1999,Dias2001). Generally speaking,the main functionality of a WCP falls into two categories:decision processing and colla-borative processing.The former helps enterprise executives, managers and analysts access the necessary information for making business-oriented decisions.The latter assists in organizing,refining,classifying and sharing work-group information.Now that the web offers the‘e-Age’with considerable potential for streamlined coordination between business partners,WCP is no longer a simple gateway to acquire information,but should‘connect us not only with everything we need,but with everyone we need,and provide all the tools we need to work together’(Murray 1999).As has been said,a WCP must not only provide information,knowledge and expertise,but fully integrate94 D.Liu et al.collaborative partners to fulfill their common engineering activities beyond a simple entry to content searching or decision support.A corporate portal should also guarantee that the right information is available or dispatched to the right person at the right time regardless of where it resides.Apart from its strong pull–push capacity of dealing with information,the WCP should also be furnished with an easy-to-use web interface to enable its wide,rapid and correct access to heterogeneous systems,distributedfiles and databases. 5.DRAGON engineering portalAs mentioned previously,DRAGON is the abbreviation of the EU–China project(development of an interactive engineering portal for open networks).The project aims at building a DRAGON engineering portal to support inno-vatively a joint virtual collaboration for product development between distributed business partners from European countries and China.Both manufactures and suppliers are enabled to provide,view,and process information via the DEP.In order to protect vital know-how of collabor-ating partners,the permissible information exchange is limited to the common product development processes. DRAGON provides new technical solutions for distrib-uted engineering collaboration based on a set of web-based tools and services,as illustrated infigure1:1.check of collaboration(CC)enables end users tosearch,evaluate and rank potential partners withoriginal equipment manufacturers’(OEMs’)cut-offrequests met as efficiently as possible.2.request and navigation(RN)supports end users inthe early stage(contact initiation)of engineeringcollaboration for enterprise registration,manage-ment of user–product–project,partner selectionand contact initiation.3.process modeller(PM)helps the companies involvedto define common product development processesthrough a built-time functionality of workflowmanagement.4.specification modeller(SM)manages a complete andcorrect specification of a common engineering taskon a necessary and sufficient subset of productrequirements as well as the design validation in linewith these requirements.5.visualization and validation(VV),allows the com-panies involved to access,visualize and validaterelated engineering data via standardized interfaces. The kernel infrastructure of DEP is the DRAGON information broker(DIB),which is an intermediate connector interacting with all the above-mentioned services for manipulating the data model and instance data through its internal data engine.It also provides an external data engine for the engineering and administrative data ex-change between the major service units and external application systems,such as product data management (PDM),enterprise resource planning(ERP),computer aided exercise(CAx)and soon.Figure1.The architecture of the DRAGON engineering portal.A networked engineering portal95Cultural repository(CR)is the underpinning of the DEP. It mainly consists of three components:‘search andfind’; knowledge management;and culture guidelines.‘Search andfind’provides end users with general information about the targeted country;knowledge management allows end users to share personal experience and best practices; culture guidelines gives culture-related advice on every step of two stages of engineering collaboration.With the help of cultural repository throughout the entire process of engineering collaboration,DEP is able to: 1.support industrial companies in locating appro-priate collaborating partners in foreign markets,then initiate a contract and establish engineeringcollaboration;2.facilitate a distributed,requirement-driven productdevelopment under a unified data model;3.support a dynamic integration of developmentprocesses based on consistent information models;4.ensure a secure exchange of information and knowl-edge among involved companies;5.identify and solve cooperative problems arisen fromcultural differences;6.provide best practices for web-based commonengineering collaboration.Envisioning the key benefits andfinancial gains from the DRAGON project,DEP will be promoted across Europe via best practice activities to validate the research results by both project partners and interested external companies.5.1.E-portal case study towards the DEPE-collaboration(Dias2001)among supply chain partners involves sharing of information,collaboration planning, joint decision-making,new product development,and product change management.E-collaboration enables business partners to co-work in:1.supply chain activities across enterprises and overthe Internet;2.collaborative decision-making for synchronizingand developing new plans to meet the marketdemand;3.collaborative product development by organisingauthorized project team to review product innova-tion and to share design&manufacturingtechnologies;4.correlated product change management along thesupply chain by delivering any engineering changeinvolved in a product development.As e-portals emerge as a method to integrate more necessary functions to provide a better service to enable manufacturing companies to collaborate,they make it possible to enlarge the scope of the e-supply chain into a broader scale of collaboration by supplementing a strong e-partnering function and a collaborative product develop-ment function,despite the fact that they exist in a variety of different forms(Dias2001,Chan2002).In order to devise an advanced,innovative system architecture for DEP,more than ten selected e-portals, including a few emerging Chinese portals,have been carefully pared with DEP,table1cate-gorizes the e-portals involved according to four significant indicators:contact initiation(CI),supply chain partnership (SCP),collaborative product development(CPD),and culture-specific solution(CS).A number of competitive solutions can be found in the market,as shown in table1.DEP is,however,the only one that covers the full bandwidth of a collaborative process (Bumeder2003),as described in the following sub-sections.5.1.1Contact initiation.The main‘competitors’of DEP such as AHK,Mercantil,Covisint,MeetWorldTrade, ChinaDotCom and e-Haier developed some comparable functionalities for the‘provision of company information’. DEP additionally offers a smart evaluation service through CC to support OEMs in selecting the most proper partner. Afterfinding an appropriate partner or a list of potential partners,the direct contact to the chosen partners has to be established.SupplyOn offers such a functionality similar to DEP,but only offers standard forms.DEP provides an individual‘Request for Quote’form which can be generated by the RN component and modified via the component SM.The remarkable advantage of DEP in comparison to other e-portals is the focus on the large potential Chinese market.Contact initiation is promoted and supported in China by preferential government policies for joint venture establishment with western countries.5.1.2Supply chain partnership.Owing to the advanced enabling technology of PDM(Miller et al.1997)which streamlines the process of building and maintaining a complete manufacturing database of parts and bills of material(BOMs),collaborative product data exchange and share can be performed through an inter-component of DRAGON–DIB,to support establishing the supply chain partnership from the early stage of contact initiation: supplier registration,supplier retrieval,supplier evaluation, and supplier negotiation.External data exchange adapter(EDEA)is developed under DIB to take charge of across-company product data searching,changing and sharing regardless of heteroge-neous data platforms.EDEA facilitates a better integration of suppliers within the value chain and consequently for the whole process of engineering collaboration.96 D.Liu et al.T a b l e 1.W o r l d w i d e c o m p e t i t o r s o f D R A G O N e n g i n e e r i n g p o r t a l .P o r t a l s P r o v i d e r sP o r t a l d e s c r i p t i o n sC I S C P C PD C SD E P E U -C h i n aA n e n g i n e e r i n g p o r t a l t o s u p p o r t t h e w h o l e b u s i n e s s p r o c e s s u n d e r a s t r o n g c u l t u r a l a s s i s t a n c e f o r c o n t a c t i n i t i a t i o n a n d c o l l a b o r a t i v e p r o d u c t d e v e l o p m e n t b e t w e e n E u r o p e a n d C h i n a w i t h a w i d e r a n g e 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,w h i c h o f f e r s c l i e n t s e -b u s i n e s s s e r v i c e s ,f u t u r e -p r o o f a n d e f f i c i e n t s o l u t i o n s w i t h a b u s i n e s s d i r e c t o r y ,b u s i n e s s m a n a g e r a n d s t a n d a r d m a n a g e r .(h t t p ://w w w .s u p p l y o n .c o m )X X XA I A G U S A A n e n g i n e e r i n g p o r t a l t o e n a b l e c o l l a b o r a t i v e e n g i n e e r i n g a n d p r o d u c t d e v e l o p m e n t f o r a l l p a r t i c i p a n t s i n t h e e x t e n d e d e n t e r p r i s e t o a c h i e v e c o s t s a v i n g s ,l e a d -t i m e r e d u c t i o n ,a n d q u a l i t y i m p r o v e m e n t i n g l o b a l a u t o m o t i v e s u p p l y c h a i n .(h t t p ://w w w .a i a g .o r g )X Xe -V i s U S A A t e a m c e n t r e c o m m u n i t y e n a b l i n g c l i e n t s t o c a r r y o u t c o l l a b o r a t i v e d e s i g n r e v i e w ,e l e c t r o n i c p u r c h a s i n g ,e n g i n e e r i n g c h a n g e m a n a g e m e n t a n d p r o j e c t a d m i n i s t r a t i o n .(h t t p ://w w w .e -v i s .c o m )X XC o C r e a t eG e r m a n y ,J a p a nA c o l l a b o r a t i o n p o r t a l f o r C A D s o f t w a r e d e v e l o p m e n t b y i m p r o v i n g i n n o v a t i o n a n d p r o d u c t i v i t y b u t i t s e -m a r k e t p l a c e i s o n l y a v a i l a b l e f o r s u p p o r t c u s t o m e r s w i t h c u r r e n t s u p p o r t c o n t r a c t s .(h t t p ://w w w .c o c r e a t e .c o m )X XM e e t W o r l d -T r a d e U S A A n e t w o r k o f A s i a n e -m a r k e t p l a c e s w h i c h h e l p p u r c h a s i n g p r o f e s s i o n a l s a n d s o u r c e v e n d o r s i n d e v e l o p i n g e c o n o m i e s b y a b u y e r n e t w o r k a n d a t r a d e s e r v i c e c e n t r e p r o v i d i n g c u s t o m s o u r c i n g ,s u p p l i e r a s s e s s m e n t ,i n -c o u n t r y m e e t i n g a n d f a c t o r y v i s i t s .(h t t p ://w w w .m e e t w o r l d t r a d e 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