© Institute for Information Systems (IWi), University of Saarland EC Review Project Review, Lisbon, October 12th 1999 Virtual organisation model Clemens Odendahl Institute for Information Systems (IWi) University of Saarland Saarbrücken, Germany

© Institute for Information Systems (IWi), University of Saarland EC Review Definition of Virtual Enterprise A virtual enterprise is a co-operation form of legally independent enterprises, institutions and/or individuals, that produce a service on the basis of a common business understanding. The co-operating units participate in the horizontal and/or the vertical collaboration major with their core competencies and appear to third parties as a homogeneous enterprise. Furthermore the institutionalisation of central management functions for design, management and development of the Virtual Enterprise are extensively abandoned and the necessary demand for co-ordination and harmonisation is covered by appropriate information and communication systems. The Virtual Enterprise is connected to a mission and ends with this mission. Source: Faisst, W.: Die Unterstützung Virtueller Unternehmen durch Informations- und Kommunikaitonssysteme - eine lebenszyklusorientierte Analyse A virtual enterprise is a co-operation form of legally independent enterprises, institutions and/or individuals, that produce a service on the basis of a common business understanding. The co-operating units participate in the horizontal and/or the vertical collaboration major with their core competencies and appear to third parties as a homogeneous enterprise. Furthermore the institutionalisation of central management functions for design, management and development of the Virtual Enterprise are extensively abandoned and the necessary demand for co-ordination and harmonisation is covered by appropriate information and communication systems. The Virtual Enterprise is connected to a mission and ends with this mission.

© Institute for Information Systems (IWi), University of Saarland EC Review Directions of Virtualisation Top-Down Virtualisation Bottom-Up Virtualisation Business Network

© Institute for Information Systems (IWi), University of Saarland EC Review Types of Business Networks Large-scale enterprise Small- and medium-scale enterprise

© Institute for Information Systems (IWi), University of Saarland EC Review PUMA as Virtual Enterprise in the textile industry strategic planning, co-ordination development, design, marketing Herzogenaurach, Germany Hong Kong Europe sales and distribution Australian sales and distribution China, Singapore logistics (P & O) Africa sales and distribution South America sales and distribution North America sales and distribution production China, India, Indonesian, Thailand, Vietnam,Philippines, Malaysia etc. Taiwan production of prototypes development, design product management USA central purchasing and procurement organisation Europe central purchasing and procurement organisation Source: Faisst, W.: Die Unterstützung Virtueller Unternehmen durch Informations- und Kommunikaitonssysteme - eine lebenszyklusorientierte Analyse. Erlangen-Nürnberg 1998.

© Institute for Information Systems (IWi), University of Saarland EC Review The Manufacturer as Supplier Whether Made in Germany or Made in Finland in the end there is the same model of the new Boxster Source: LOGISTIK HEUTE, July 1998

© Institute for Information Systems (IWi), University of Saarland EC Review Logistic Networks Producer Line A Producer-Independent Line Producer Line B Sub-Supply Layer Supply Layer Manufacturing Layer Distribution Layer Future competition forces the interconnection between Supply Chains

© Institute for Information Systems (IWi), University of Saarland EC Review Validity of the Planning

© Institute for Information Systems (IWi), University of Saarland EC Review Instability of Co-ordination in Business Networks Volume time Source: Tom McGuffog, Electronic Commerce and Value Chain Management, 1998 Demand Delivery warehouse to branch Delivery warehouse to branch Orders of the retail industry Orders of the retail industry Production plan Sales forecast of the producer Sales forecast of the producer

© Institute for Information Systems (IWi), University of Saarland EC Review Target Conflict of the Production Activity Control Local Minimisation (setup time) Adherence to Delivery Dates Short Lead Times Minimisation of Material Utilisation of the System

© Institute for Information Systems (IWi), University of Saarland EC Review customerpartner company ship crew ship owner ER company ship yard tug company class society insurance company port authority flag state P&I club The Virtual Enterprise of MARVIN

© Institute for Information Systems (IWi), University of Saarland EC Review Life-Cycle of a Virtual Enterprise P a r t n e r S e a r c h C o n t r a c t i n g O p e r a t i o n D i s s o l u t i o n I d e n t i - f i c a t i o n

© Institute for Information Systems (IWi), University of Saarland EC Review Identification Determination of the need to co-operate Definition of the goal to be gained by co-operation Definition of the co-operation projects Companies who want participate in a Virtual Enterprise have to be involved in this process The customer has also to be regarded, because he determines the goods and services In MARVIN there is the reporting of the casualty, because it defines the business

© Institute for Information Systems (IWi), University of Saarland EC Review Selection of the ship yard Filter 5 Filter 3 Filter 4 Filter 2 Filter 1 Cost Capacity Ability of Dry Docks Location Competence Potential Partner Companies

© Institute for Information Systems (IWi), University of Saarland EC Review Contracting Determination of the modalities of the co-operation Content of the determination are the common target and the conditions of the co-operation Establishment of a electronic contract instead of trust, because a culture of trust can only arise over time and this is not possible in a temporary arrangement Basis for an electronic contract can be: - contract of purchase - contract of work - lease contract Task 1.4 delivers input for that phase

© Institute for Information Systems (IWi), University of Saarland EC Review Operation Execution of the Virtual Enterprise Operative phase of the co-operation (before there have been carried out planning functions) Feedback to other phases can be necessary In the first prototype version the ER company is focussed

© Institute for Information Systems (IWi), University of Saarland EC Review Dissolution Control of the dissolution Storage of relevant information gathered during the co-operation This is especially of relevance if the Virtual Enterprise produces an output its period of use ends after the dissolution of the co- operation It must be clear how in the case of warranty this claim is served

© Institute for Information Systems (IWi), University of Saarland EC Review Enlarged Virtual Enterprise in the maritime domain

© Institute for Information Systems (IWi), University of Saarland EC Review Bibliography Arnold, O.; Faisst, W.; Härtling, M.; Sieber, P.: Virtuelle Unternehmen als Unternehmenstyp der Zukunft? In: Ehrenberg, D.; Griese, J.; Mertens, P. (Hrsg.): Arbeitspapier der Reihe,,Informations- und Kommunikationssysteme als Gestaltungselement Virtueller Unternehmen" Nr. 2/1995. Ashkenas, R. et al.: The Boundaryless Organization. Breaking the Chains of Organizational Structure. San Francisco 1995, pp Behme, W.: ZP-Stichwort: Virtuelle Unternehmen. ZP, 6 (1995) Nr. 6. Benjamin R. I.; Wigand R.: Electronic Markets and Virtual Value Chains on the Informations Superhighway. Sloan Management Review, 36(1995)2. Byrne, J. A.; Brandt, R.; Port, O.: The Virtual Corporation. Business Week, February 8th 1993, pp Dangelmaier, W.: Wie Partner miteinander reden. LOGISTIK HEUTE, Nr.3 (1996), pp Davidow, W. H.; Malone, M. S.: Das virtuelle Unternehmen, der Kunde als Co-Produzent. Frankfurt/Main-New York Eversheim, W.; et. al.: Konzentration auf das Kerngeschäft: Ein systematisches Vorgehen für den Werkzeugbau. IO Management, 65 (1996) Nr. 9, pp Faisst, W.: Die Unterstützung Virtueller Unternehmen durch Informations- und Kommunikaitonssysteme - eine lebenszyklusorientierte Analyse. Diss., Erlangen-Nürnberg Friedrich, S. A.: Mit Kernkompetenzen den Wettbewerb gewinnen. IO Management, 64 (1995) Nr.4, pp Friedrich, S. A.: Outsourcing: Wie strategische Fehler vermieden werden können. IO Management, 65 (1996) Nr. 9, p. 70. Goldman, S. L.; Nagel, R. N.; Preiss, K.: Agile Competitors and Virtual Organizations – Strategies for Enriching the Customer. New York et al Hamel, G.; Prahalad, C. K.: Competing for the Future. Boston Mass. 1994, pp Krystek, U.; Redel, W.; Reppegather, pp.: Grundzüge virtueller Organisationen. Wiesbaden Markus, A.; Young, D.: Strategic Outsourcing. LRP, 29 (1996) Nr. 1, pp Mertens, P.; Faisst, W.: Virtuelle Unternehmen - Idee, Informationsverarbeitung, Illusion. In: Scheer, A.-W. (Hrsg.): Organisationsstrukturen und Informationssysteme auf dem Prüfstand. 18. Saarbrücker Arbeitstagung Heidelberg 1997, pp Ott, M. C.: Virtuelle Unternehmensführung: Zukunftsweisender Ansatz im Wettlauf um künftige Markterfolge. OM, 44 (1996) Nr Picot, A.; Reichwald, R.; Wigand, R. T.: Die grenzenlose Unternehmung. Information, Organisation und Management. 2. Aufl., Wiesbaden 1996, pp. 263f. Prahalad, C. K.; Hamel, G.: Nur Kernkompetenzen sichern das Überleben. HM, 13 (1991) Nr. 2, pp Scholz, C.: Strategische Organisation - Prinzipien zur Vitalisierung und Virtualisierung. Landsberg/Lech Schuh, G.: Virtuelle Fabrik – Beschleuniger des Strukturwandels. In: Schuh, G.; Wiendahl, H.-P. (Hrsg.): Komplexität und Agilität. Berlin u.a