Agility in project-oriented supply chain
The need for agility has traditionally been associated with the supply chains in high technology industry products. However, traditional industries also face similar challenges in terms of speed, flexibility, increased product diversity and customization. In the project-oriented business, each project is unique in terms of design, manufacturing and technological requirements and precedence constraints and processing times are highly uncertain. The high level of uncertainty, with respect to routings and processing times and uncertainly of customers orders, makes the production planning and control problem a difficult one (Babu 1999). In such a business, typically several companies are involved in the supply, and visibility and collaboration, which can be seen as the main elements of agility, are the key issues. During a project there are many things happening simultaneously, creating a lot of information that needs to be distributed and handled in real time. Open information sharing is the key issue, and information transfer must be in real time, not only inside the own organization, but also between all the companies and partners in the supply chain. (Kiianlinna & Simula 2004)
Christopher (2000) has identified a set of characteristics that a supply chain must have in order to be truly agile. Van Hoek (2001) presents the interconnections of the key agile elements. According to them, an agile supply chain is:
• being information driven (or virtual) (it involves the use of information technology to share data between buyers and suppliers and hence, enabling the supply chain to become demand driven);
• having integrated processes (achieved through collaborative working between buyers and suppliers: joint product development, common system design, shared information); and
• being network based (being able to leverage the respective strengths and competencies of network partners to achieve greater responsiveness to market needs).
The author has gone one step further and combined those and several other characteristics in SCM literature. In the Figure 1, the combined agile supply chain in project-oriented business in presented. The underlining assumption in this model is that of open relationships between the supply chain participants, the sharing of information and the use of technology to create connectivity (i.e. ability for organizations to share information in real-time).
Figure 1. Project-oriented agile supply chain (Iskanius 2006)
SteelNet system
SteelNet system is an agent-based system that uses Internet as a communication channel among enterprises. Agent technology, which is a promising software technology for enabling a flexible and dynamic coordination of distributed entities in business networks, provides a feasible solution for information sharing. Agents can be described as software systems that are autonomous, co-operative (social behaviour), reactive and pro-active (Wooldridge 1995), thus efficiently improving the decision-making in collaborating companies. Agent technology can be used for information sharing among heterogeneous applications and systems and to support networking in industrial environment despite the domain. The prototype implementations ensure the flexibility and reconfigurability of agent-based solutions while it strongly supports a-plug-and-operate approach. In SteelNet system, companies can do the following tasks electronically, which really makes the supply chain more agile:
• Send and receive tenders and requests for tenders in the network Controlled transparent needs to be taken into account (the request for tender is sent to all companies or to selective ones only);
• The changing of tendering data into order data is possible for the network members;
• Sending work orders to all member firms simultaneously using the Internet; • Follow-up of products under production is possible in different firms within the
network in real time;
• Centralized documentation handling for the whole network. Support for document handling of orders;
• Reservation of free resources through the net. Resources can mean persons, equipment or services;
• Usage reports for the firms: volumes of usage, usage times, services used, change management, etc.
SteelNet system, in its nature, is an open shared information system between multiple companies, where each company has equal rights and responsibilities in a supply chain and each company can act as a project owner or as a supplier to other company. In other words, each company can independently request quotes or make orders in SteelNet system, unlike traditional subcontractor systems which are typically designed for the focal company and for the supplier management. Figure 2 presents the structure of the SteelNet system. The SteelNet system management takes place from service provider’s premises. Yet the service provider can be, for instance, the focal company of the supply network and no external service provider is needed.
Company C FIPA ACL HTTP FIPA ACL HTTP Company A Company B DB FIPA ACL HTTP SteelNet System Logistic Information ERPAgent A Ontology Agent B Agent C
Figure 2 – Agents delivering information in various ways in SteelNet.
CONCLUSION
The SteelNet system, reported in this paper, gives an opportunity for real-time and transparent information sharing. It is generated to fit the needs of both small and large companies with different levels of ICT systems. The companies operating in the project-oriented business together exploit market opportunities and share costs, skills, and core competences. Intensive co-operation between personnel of the companies and researchers has formed the system that provides answers for the requirements of every day duties. Yet it is important to note that the implementation of a new ICT system poses a number of challenges
for the companies in the network. Companies of all sizes participating in the SteelNet showed determination and willingness to learn the benefits of the new ICT system. Interestingly, the personnel at the operational level were in many cases the first ones to realize the benefits of the new system and practices. To further develop the SteelNet system, commitment in the top management level is of crucial importance.
The benefits that agility, achieved by SteelNet system, offers to the network in terms of flexibility, costs, lead times, efficiency, business volume and profitability are very attractive and capable of ensuring better competitive edge in meeting greater and serious challenges that lie ahead in the future. It is concluded that in project-oriented supply chain, agility is necessary for competitiveness, and comprehensive implementation of ICT throughout the supply chain is of utmost importance in the development of an agile supply chain.
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EXPLORATORY RESEARCH INTO SUPPLY CHAIN VOIDS WITHIN WELSH