NAVIGATION
PARTNER
Project Objectives
Nearly 30 % of the intermediate output from business related services is consumed by manufacturing companies. This mutual dependence offers great opportunities for the European manufacturing and services industries to improve the overall competitiveness in a global environment.
InCoCo-S explicitly addresses these challenges: Unfortunately, managers of both manufacturing and supporting service organizations are facing tremendous difficulties in the efficient integration and synchronization of their joint activities. The high degree of integration and synchronization needed is not achieved so far. It is not supported by appropriate information systems, planning and control instruments and decision support tools. Moreover, the complexity of the highly interdependent processes and interactions is not understood. Thus, leadership in integrated manufacturing – support services system development is not achieved so far.
The business / technological challenge for companies can therefore be summarized as follows:
• The challenge for increasingly global acting manufacturing companies is to integrate and synchronize services from external providers into their existing and continuously evolving manufacturing chains and to successfully measure, control and evaluate the performance of these joint activities, both at the operational and strategic levels.
• The challenge for supporting service companies is to meet production requirements irrespective of place and time through coordinated and synchronized activities and to remain a reliable and innovative partner for global manufacturing organizations in a long term.
The overall goal of InCoCo-S is to enhance European leadership in manufacturing systems development. The specific objective is to develop a set of methods that significantly improve the overall performance of both regional European and internationally operating production systems through synchronized and well coordinated integration of the different supporting services into manufacturing chains. This will be achieved by radical innovation in traditional approaches of integrated manufacturing chain design including supporting services integration and will lead to the following radical innovative outcomes of the InCoCo-S initiative:
• Novel coordination procedures between the interdependent activities and processes in supply chains – supporting services interaction which build the basis for synchronized activities and the achievement of the respective business goals
• Novel integrated performance measures and metrics that incorporate and link supporting service performance to manufacturing chain performance and thus build the foundation for successful management, benchmarking and transparency in integrated manufacturing chain – supporting services systems.
• Novel decision making procedures between decentralized planning and information systems in integrated production - services systems which are the basis for automated interaction between activities in manufacturing chain and supporting services
• Novel dynamic and collaborative simulation modelling approaches as one central instrument in the InCoCo-S development approach in order to resolve the complexity in interaction and as a basis for simulation based training tools for professional development.
These outcomes of InCoCo-S will be incorporated in a pioneering new framework for the development and management of integrated manufacturing – services production systems:
The reference architecture of manufacturing chains – supporting services integration. This Reference Model draws on the SCOR reference model of supply chain management. But up to now the SCOR model does not incorporates the characteristics and requirements of supporting services and their interaction with manufacturing. InCoCo`s innovative vision is to fill this gap by integrating service activities into the new model the very first time.
InCoCo-S explicitly addresses these challenges: Unfortunately, managers of both manufacturing and supporting service organizations are facing tremendous difficulties in the efficient integration and synchronization of their joint activities. The high degree of integration and synchronization needed is not achieved so far. It is not supported by appropriate information systems, planning and control instruments and decision support tools. Moreover, the complexity of the highly interdependent processes and interactions is not understood. Thus, leadership in integrated manufacturing – support services system development is not achieved so far.
The business / technological challenge for companies can therefore be summarized as follows:
• The challenge for increasingly global acting manufacturing companies is to integrate and synchronize services from external providers into their existing and continuously evolving manufacturing chains and to successfully measure, control and evaluate the performance of these joint activities, both at the operational and strategic levels.
• The challenge for supporting service companies is to meet production requirements irrespective of place and time through coordinated and synchronized activities and to remain a reliable and innovative partner for global manufacturing organizations in a long term.
The overall goal of InCoCo-S is to enhance European leadership in manufacturing systems development. The specific objective is to develop a set of methods that significantly improve the overall performance of both regional European and internationally operating production systems through synchronized and well coordinated integration of the different supporting services into manufacturing chains. This will be achieved by radical innovation in traditional approaches of integrated manufacturing chain design including supporting services integration and will lead to the following radical innovative outcomes of the InCoCo-S initiative:
• Novel coordination procedures between the interdependent activities and processes in supply chains – supporting services interaction which build the basis for synchronized activities and the achievement of the respective business goals
• Novel integrated performance measures and metrics that incorporate and link supporting service performance to manufacturing chain performance and thus build the foundation for successful management, benchmarking and transparency in integrated manufacturing chain – supporting services systems.
• Novel decision making procedures between decentralized planning and information systems in integrated production - services systems which are the basis for automated interaction between activities in manufacturing chain and supporting services
• Novel dynamic and collaborative simulation modelling approaches as one central instrument in the InCoCo-S development approach in order to resolve the complexity in interaction and as a basis for simulation based training tools for professional development.
These outcomes of InCoCo-S will be incorporated in a pioneering new framework for the development and management of integrated manufacturing – services production systems:
The reference architecture of manufacturing chains – supporting services integration. This Reference Model draws on the SCOR reference model of supply chain management. But up to now the SCOR model does not incorporates the characteristics and requirements of supporting services and their interaction with manufacturing. InCoCo`s innovative vision is to fill this gap by integrating service activities into the new model the very first time.
State of the Art
Over the last years aspects addressed to InCoCo-S have been subject to research in several areas. The following outlines the body of knowledge available in:
State of the Art: Networked Business Research
On a general level, research about networked business relationships deals with two types of organizational relationships and networks: vertical [i.e., the interaction between support companies or suppliers and production companies] (e.g., Frazier et al. 1988; Heide and John 1992, Spekman, R.E. and D. Strauss 1986), and horizontal networks [i.e., the interaction amongst the individual companies within a business network] (e.g., Bucklin and Sengupta 1993, Lorange and Roos 1991). The resultant frameworks and models have contributed significantly to the understanding of organizational relationships and networks (e.g., Anderson and Narus 1990, Anderson et al. 1994,). However, the relationship of supporting services linked to manufacturing chains is not considered so far in the general network research.
State of the Art: Service Research
The extensive body of service research provides several approaches for modelling of services (Meffert 1994; Backhaus; Schlüter 1994; Sontow 1997); they originate mainly in marketing and industrial engineering (Donabedian 1980; Edvardson, Olson 1996; Jaschinski 1998) or in the quality management (Hentschel 1992; Benkenstein 1993; Meffert, Bruhn 1995; Bullinger, Haischer, Renner 1994). An analysis of these approaches is showing concentration on single aspects within the respective models (e.g. quality management), a certain scientific discipline (e.g. engineering) and/or on a certain service industry (e.g. financial services). No model focuses on the synchronization of supporting services with the manufacturing chain.
Several studies examined more specifically certain aspects of services or service aspects in supply chain contexts. For example, a special issue of the ‘International Journal of Service Industry Management (Vol. 11 (4), 2000; edited by Satish Mehra) dealt with issues in supply chain management in services. The relationship between information technology and service quality in the dual-direction supply chain has been investigated by Zsidisin, Jun and Adams (2000). Van Hoek (1998) and Van Hoek (2000) examined the role of third party logistic services in customization through postponement. The aspect of customer-supplier duality and bi-directional supply chains in service organizations has been addressed by Sampson (2000). A review of these studies reveals that they are not applicable to services in the manufacturing chain and to be applied in the context of the InCoCo-S initiative. Youngdahl and Loomba (2000) looked at a conceptual framework of service-driven supply chains based on the SCOR model. This work however differs in the perspective as compared to InCoCo-S and is therefore not applicable.
State of the Art: Manufacturing Chain Integration Models and Metrics
SCOR The de-facto standard SCOR is limited in scope to five primary supply chain processes: The distinct processes (source, plan, make, and deliver) of SCOR do not consider external service provision in the supply chain. A benchmarking study based on the SCOR model done by the PRTM & KPMG consulting, (1997 PRTM ISC Benchmark Study) limited to measures of logistics and costs, however, clearly shows the applicability and benefit of the SCOR model for this purpose. Conceptualizing supporting services functions and their impact on performance, however, is not matter of the SCOR reference architecture so far.
COLLABORATIVE FRAMEWORK The COLLABORATIVE FRAMEWORK identifies the points of collaboration and breaks collaboration process into four functions, highlighting the core elements of value add and risk avoidance in defining the steps critical in establishing collaboration relationships, managing shared processes, sensing and responding to critical exceptions, and fostering continual process and product improvement.
CPFR (from VICS) will provide insight into the planning, forecasting, replenishment processes, critical in collaborative planning (CP). Finally, Six Sigma will confirm that expected CP collaboration quality levels are being achieved. The C-Frame approach to CP – a USA based initiative integrated into the overall InCoCo-S IMS project - will identify specific process metrics and measures of appropriate collaboration behaviour, explaining why the metrics demonstrate particular levels of trust and predictability. External supporting services and their integration and impact on manufacturing were not considered up to date.
PRODCHAIN. The EU-funded research project (IST-2000-61205) incorporates how decisions of different levels are related to each other and which decisions are influenced by objectives. The achievement of the objectives can be measured by performance ratios. Networks will be modelled, characterized, analyzed and evaluated in order to be able to determine the relevant objectives, determinants and performance ratios which deal as the critical information input. The PRODCHAIN approach provides valuable insights for InCoCo. External supporting services and their integration and impact are not considered in PRODCHAIN
VCOR The Value Chain Operational Reference model that is under development by the Value Chain Group is a three level reference model that currently defines high level groupings of activities (Market, Research, Development, Sell, Support, Source, Make, Deliver, Return, and Retire) that contain process elements that can be used to define the interactions between internal and external partners in the service network. These collaborative processes define the semantics and the information (in terms of process context sensitive input/output data elements) that are shared but at a general level. External supporting services and their integration and impact manufacturing are not considered in VCOR as well.
Concepts such as Balance Scorecard and the existing SCOR Measure of Performances do bring forward the key measures for manufacturing chains. However, they do not integrate measures of supporting services so far (Schomburg 1980, Schönsleben 2000). The OEE concept of maintenance and equipment performance is not linked to overall manufacturing performance. However, the OEE concept provides with valuable input for the work proposed in InCoCo. For a comprehensive review of these concepts & metrics systems please see Hartmann (2001).
State of the Art: Networked Business Research
On a general level, research about networked business relationships deals with two types of organizational relationships and networks: vertical [i.e., the interaction between support companies or suppliers and production companies] (e.g., Frazier et al. 1988; Heide and John 1992, Spekman, R.E. and D. Strauss 1986), and horizontal networks [i.e., the interaction amongst the individual companies within a business network] (e.g., Bucklin and Sengupta 1993, Lorange and Roos 1991). The resultant frameworks and models have contributed significantly to the understanding of organizational relationships and networks (e.g., Anderson and Narus 1990, Anderson et al. 1994,). However, the relationship of supporting services linked to manufacturing chains is not considered so far in the general network research.
State of the Art: Service Research
The extensive body of service research provides several approaches for modelling of services (Meffert 1994; Backhaus; Schlüter 1994; Sontow 1997); they originate mainly in marketing and industrial engineering (Donabedian 1980; Edvardson, Olson 1996; Jaschinski 1998) or in the quality management (Hentschel 1992; Benkenstein 1993; Meffert, Bruhn 1995; Bullinger, Haischer, Renner 1994). An analysis of these approaches is showing concentration on single aspects within the respective models (e.g. quality management), a certain scientific discipline (e.g. engineering) and/or on a certain service industry (e.g. financial services). No model focuses on the synchronization of supporting services with the manufacturing chain.
Several studies examined more specifically certain aspects of services or service aspects in supply chain contexts. For example, a special issue of the ‘International Journal of Service Industry Management (Vol. 11 (4), 2000; edited by Satish Mehra) dealt with issues in supply chain management in services. The relationship between information technology and service quality in the dual-direction supply chain has been investigated by Zsidisin, Jun and Adams (2000). Van Hoek (1998) and Van Hoek (2000) examined the role of third party logistic services in customization through postponement. The aspect of customer-supplier duality and bi-directional supply chains in service organizations has been addressed by Sampson (2000). A review of these studies reveals that they are not applicable to services in the manufacturing chain and to be applied in the context of the InCoCo-S initiative. Youngdahl and Loomba (2000) looked at a conceptual framework of service-driven supply chains based on the SCOR model. This work however differs in the perspective as compared to InCoCo-S and is therefore not applicable.
State of the Art: Manufacturing Chain Integration Models and Metrics
SCOR The de-facto standard SCOR is limited in scope to five primary supply chain processes: The distinct processes (source, plan, make, and deliver) of SCOR do not consider external service provision in the supply chain. A benchmarking study based on the SCOR model done by the PRTM & KPMG consulting, (1997 PRTM ISC Benchmark Study) limited to measures of logistics and costs, however, clearly shows the applicability and benefit of the SCOR model for this purpose. Conceptualizing supporting services functions and their impact on performance, however, is not matter of the SCOR reference architecture so far.
COLLABORATIVE FRAMEWORK The COLLABORATIVE FRAMEWORK identifies the points of collaboration and breaks collaboration process into four functions, highlighting the core elements of value add and risk avoidance in defining the steps critical in establishing collaboration relationships, managing shared processes, sensing and responding to critical exceptions, and fostering continual process and product improvement.
CPFR (from VICS) will provide insight into the planning, forecasting, replenishment processes, critical in collaborative planning (CP). Finally, Six Sigma will confirm that expected CP collaboration quality levels are being achieved. The C-Frame approach to CP – a USA based initiative integrated into the overall InCoCo-S IMS project - will identify specific process metrics and measures of appropriate collaboration behaviour, explaining why the metrics demonstrate particular levels of trust and predictability. External supporting services and their integration and impact on manufacturing were not considered up to date.
PRODCHAIN. The EU-funded research project (IST-2000-61205) incorporates how decisions of different levels are related to each other and which decisions are influenced by objectives. The achievement of the objectives can be measured by performance ratios. Networks will be modelled, characterized, analyzed and evaluated in order to be able to determine the relevant objectives, determinants and performance ratios which deal as the critical information input. The PRODCHAIN approach provides valuable insights for InCoCo. External supporting services and their integration and impact are not considered in PRODCHAIN
VCOR The Value Chain Operational Reference model that is under development by the Value Chain Group is a three level reference model that currently defines high level groupings of activities (Market, Research, Development, Sell, Support, Source, Make, Deliver, Return, and Retire) that contain process elements that can be used to define the interactions between internal and external partners in the service network. These collaborative processes define the semantics and the information (in terms of process context sensitive input/output data elements) that are shared but at a general level. External supporting services and their integration and impact manufacturing are not considered in VCOR as well.
Concepts such as Balance Scorecard and the existing SCOR Measure of Performances do bring forward the key measures for manufacturing chains. However, they do not integrate measures of supporting services so far (Schomburg 1980, Schönsleben 2000). The OEE concept of maintenance and equipment performance is not linked to overall manufacturing performance. However, the OEE concept provides with valuable input for the work proposed in InCoCo. For a comprehensive review of these concepts & metrics systems please see Hartmann (2001).
Summary & GAP Analysis
Analyzing the existing research related to InCoCo-S reveals the following: Despite the comprehensive body of literature, in the Service Research and General Network theory domain, no concepts are available that guide supporting services providers and manufacturing companies to more effectively integrate and synchronize their processes. The review of existing models and studies reveals that 1. they are not applicable to services in the manufacturing chain and to be applied in the context of the InCoCo-S initiative or 2. work differs in the perspective as compared to the InCoCo-S perspective and is therefore not suitable in the domain of supporting services in manufacturing chains.
Manufacturing Chain Integration Models and Metrics originally developed for specifying the business networks and benchmarking the performance of coordination strategies in manufacturing and logistics environments are inadequate and lack critical competencies to support hybrid systems a) which are focusing on in service-supply chain integration and b) which are spanning both horizontal and vertical networks as in the scope of the overall IMS InCoCo-S initiative.. This is the result of the analyses made here and supported by related analyses work by Fleisch (2001).
The detailed analyses has revealed as well that the models and frameworks from this domain such as SCOR, Collaborative Framework, CPFR, VCOR and current outcomes from PODCHAIN, however, can contribute to the InCoCo-S work as they are addressing single aspects of relevance for InCoCo. In order to take advantage of these existing contributions, the InCoCo-S overall project structure directly integrates the main related initiatives as part of the interregional consortium: The SCC supply Chain Council – origin of SCOR – and the USA C-FRAME consortium currently aiming to integrate SCOR, CPFR, VCOR, COLLABORATIVE FRAMEWORK and PRODCHAIN results, without focusing on the manufacturing chain – support services integration. The C-Frame consortium is described later in this proposal.
Manufacturing Chain Integration Models and Metrics originally developed for specifying the business networks and benchmarking the performance of coordination strategies in manufacturing and logistics environments are inadequate and lack critical competencies to support hybrid systems a) which are focusing on in service-supply chain integration and b) which are spanning both horizontal and vertical networks as in the scope of the overall IMS InCoCo-S initiative.. This is the result of the analyses made here and supported by related analyses work by Fleisch (2001).
The detailed analyses has revealed as well that the models and frameworks from this domain such as SCOR, Collaborative Framework, CPFR, VCOR and current outcomes from PODCHAIN, however, can contribute to the InCoCo-S work as they are addressing single aspects of relevance for InCoCo. In order to take advantage of these existing contributions, the InCoCo-S overall project structure directly integrates the main related initiatives as part of the interregional consortium: The SCC supply Chain Council – origin of SCOR – and the USA C-FRAME consortium currently aiming to integrate SCOR, CPFR, VCOR, COLLABORATIVE FRAMEWORK and PRODCHAIN results, without focusing on the manufacturing chain – support services integration. The C-Frame consortium is described later in this proposal.