A collaborative working tool for information systems

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Int. J. Business and Systems Research, Vol. 3, No. 2, 2009

A collaborative working tool for information systems integration and continuous improvement Päivi Iskanius Raahe Unit, University of Oulu, Rantakatu 5, Raahe FI-92101, Raahe, Finland E-mail: [email protected]

Heli Susanna Helaakoski VTT Technical Research Centre of Finland, P.O. Box 3, Rantakatu 5, Raahe FI-92101, Finland E-mail: [email protected]

Tom Page* Department of Design and Technology, Loughborough University, Loughborough, UK E-mail: [email protected] *Corresponding author Abstract: This paper discuses the virtual enterprise (VE) as an intercompany collaborative tool for knowledge management. This concept, based on the internet and state-of-the-art information technologies, can be seen as the foundation for a firm’s information resources. This paper presents the case VE, called SteelNet, based on an information technology (IT) solution deploying agent technology. The VE integrates dispersed companies and customers to ensure that all the members of the network receive accurate and timely information. The VE reported here provides a new solution for an unpredicted opportunity. Therefore, the VE is more of an action, rather than an institution. Keywords: agent technology; CI; continuous innovation; information systems integration. Reference to this paper should be made as follows: Iskanius, P., Helaakoski, H.S. and Page, T. (2009) ‘A collaborative working tool for information systems integration and continuous improvement’, Int. J. Business and Systems Research, Vol. 3, No. 2, pp.202–215. Biographical notes: Päivi Iskanius (Doctor of Technology) works as a Postdoctoral Research Fellow at the University of Oulu. She has received her Master’ degree in Mechanical Engineering in 1988, eMBA degree in 2002, Licentiate’s degree in Mechanical Engineering in 2004 and Doctoral degree in Industrial Engineering and Management in 2006. All of these degrees are from the University of Oulu. Her research interests are logistics, supply chain Copyright © 2009 Inderscience Enterprises Ltd.

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management and e-business applications in the SME business networks. To date, she has over 70 research publications in these areas. Heli Helaakoski (Doctor of Technology) works as a Senior Research Scientist in VTT Technical Research Centre of Finland. She has got her Bachelor of Science in Machine Automation from the Oulu Polytechnic and Master of Science in Computer Engineering in 2001 from the University of Oulu. Her research interests are interoperability, agent technology, ontologies, semantic technologies and mobile applications. She has worked in several industryrelated research projects as a Research Manager and has over 30 scientific publications. Tom Page is a Lecturer in Electronic Product Design at Loughborough University. His research interests include electronics design tools, electronics design for manufacturing and assembly and engineering/technological education. He has written more than 300 publications in the forms of journal papers, book contributions, refereed proceedings, refereed conference papers and technical papers. He is a Visiting Scholar at Iceland University of Education and the University of Lapland in Finland and is an external examiner on undergraduate fields in Product Design and Manufacturing Engineering at the University of East London.

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Introduction

Today, the world is in transition from the industrial to the information era which in turn has created a new techno–socioeconomic paradigm. This, in particular, has been due to globalisation and advancements in information and communication technology (ICT) (Harmaakorpi, 2004; Iskanius and Uusipaavalniemi, 2007). In this new information era, firms have initiated a network-based approach in their operations, which encourages the sharing of information and knowledge among its members. Commonly used theories and concepts that describe this transformation of the world economy are post-industrial society (Bell, 1973), information society (Webster, 1995), innovation economy (Edquist, 1997), knowledge economy (Drucker, 1966), network economy (Castells, 1996), digital economy (Tapscott, 1996), weightless economy (Quah, 1996), learning economy (Lundvall and Johanson, 1994), e-economy (Cohen et al., 2000) and new economy (Soete, 2001). These theories and concepts highlight the roles of information integration and supporting technology, knowledge sharing and learning, and, above all, innovation. Globalisation changes ‘the rules of the competition’ by resulting growing worldwide integration and interpenetration of economic activities. It makes price and cost competition more intensive as national monopolies and oligopolies break down. Besides growing price and cost competition, quality and time have become increasingly important for firm’s competitiveness. However, such competition criteria are only entry barriers to the global market, while economic success increasingly depends on a firms’ ability to innovate rapidly and continuously and to develop new products and services that meet customer demands in the first place. In global markets, firms can no longer expect that their successful products, services and practices of the past will keep them viable in the future. Firms are forced to embody a philosophy of continuous improvement and continuous innovation (CI). Along with reducing costs, they have to think in terms of

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growth and value-added through knowledge creation and knowledge application in innovation processes (Schienstock and Hämäläinen, 2001). Together with globalisation, the development of ICT change the rules how to run business. The introduction and intelligent use of modern ICT as information-producing and communication-enabling technologies become crucially important. Characteristic of modern ICT, such as the internet and web technologies, is that they significantly increase firms’ capacity to efficiently generate and process knowledge-based information (Castells, 1996). The fact that modern ICT connect firms with core data banks means that structured technological and scientific information become more easily available to firms worldwide. Modern ICT changes the way of communication between firms; it allows intensive interaction and knowledge exchange between increasingly specialised firms in network structures. Traditional social networks with face-to-face communication can be supplemented by virtual networks and electronic interaction (Schienstock and Hämäläinen, 2001). Difference, interrelated concepts that emphasise the virtuality and network-nature, have arisen in the literature, that is, ‘e-business models’ (Timmers, 1999), ‘e-business networks’ (Kalakota and Robinson, 1999), ‘e-business communities’ (Tapscott et al., 2000), ‘web-communities’ (Figallo, 1998; Mika, 2007), ‘virtual clusters’ (Tapscott et al., 2000), ‘virtual innovation networks’ (de la Mothe and Paquet, 1998), ‘virtual enterprises’ (Browne and Zhang, 1999), ‘agile enterprise’ (Greis and Kasarda, 1997), ‘value nets’ (Bovet and Martha, 2000), ‘value webs’ (Andrews and Hahn, 1998; Iskanius et al., 2007), ‘value chain constellations’ (Clegg and Page, 2007; Poirier and Bauer, 2000) or ‘information hubs’ (Lee and Whang, 2001). Empowered by the digital media, these virtual forms are expected to take the leading role in economic and social innovations in the world of increasing globalisation, connectivity and knowledge intensity (Castells, 1996; Jarillo, 1993; Smith, 2007).

1.1 Aim This article discusses one facet of this new virtual trend, namely, the concept of the virtual enterprise (VE) as an intercompany collaborative tool for CI. This concept, based usually on the internet and new advanced technologies, can be seen as the basis of a firm’s information resources, the bridge between partners, the platform for knowledge management and the learning-oriented organisation, as well as the powerful tool for promoting innovations. The main objective of this study is to find out new ways for information sharing and CI in the dispersed business network. The empirical part of this study is conducted within the case business network consisting of small- and mediumsized enterprises (SMEs) and a large steel corporation. The new VE, developed in this case network, integrates physically dispersed individual companies and their customers to ensure that all the members of the network receive accurate information in a timely manner. The new VE, called SteelNet, is based on agent technology.


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Methodology

2.1 Research problem The trend in today’s business environment is towards more innovative, value-added products, total solutions that are customised to the individual customer needs. That is also the trend in the case business network, which is moving from mass production towards supplying systems and turnkey deliveries of one-of-a-kind products, in other words, towards project-oriented business. The case network consists of SME suppliers – typically component suppliers or service providers – and the large steel corporation as a focal company. The focal company, which previous has concentrated on steel production, is now vigorously integrating upstream of the supply chain in order to raise the valueadded. The focal company has outsourced many manufacturing activities such as welding, bending, cutting, etc., and today is more and more focusing on brand building, customer service management and management of supplier network. However, among its suppliers, there is a shortage of medium size companies that can take care of more comprehensive outsourced operations. Thus, small suppliers with the focus on the manufacturing of parts and components have had to increase their role and take more responsibility of the development of products, manufacturing and logistics. The research and development (R&D) activities, which before have been in the hands of the focal company, in the near future; will be in the responsibility of SMEs. The main problem is identifying new ways for information integration, knowledge sharing and CI in thus kind of dispersed network. Communication and information sharing between the case companies is today mainly based on mail, e-mail, phone calls or company visits – that do not give much visibility or virtuality into the network (Clegg and Page, 2007). A few companies have advanced IT systems, all of them point-of-solutions, and the majority have no advanced electronic information systems at all. The case companies have discovered that IT utilisation could bring great challenges for their collaboration activities. Furthermore, the concept of VE was contrived because of its dynamic nature and equality of power (Hinds and Keisler, 2002). The fundamental research question of this study is, therefore, stated as follows: How to develop a VE for CI in the case network?

2.2 Data collection Initially, the essential principles of the VE concept were studied from a theoretical perspective. Furthermore, literature review related for CI was undertaken to select the right technology solution for the case VE concept, called later SteelNet system. Upon theoretical review, qualitative methods such as interviews, observations, questionnaires, process modelling and documents were used as data collection methods. The exploratory nature of this research question gives a rise to an iterative process of data collection. This study has some characteristics of action research, but considering the goal of this research (to develop a VE); the constructive approach was chosen as the most suitable framework of observation for this study. The constructive approach is a research procedure that produces innovative constructs, intended to solve problems faced in the real world and, by that means, to make a contribution to the theory of the discipline in which it is applied. The central notion of this approach, the novel construct, can be a model, diagram, plan, organisation structure, commercial product, information system design or a new VE

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concept, as this study reports. It is characteristic that they all are invented and developed, not discovered. A successful constructive research project has to produce a new solution to the problem in question; otherwise there is no point in going on with the research (Kasanen et al., 1993). Moreover, it has to demonstrate that the solution is novel and actually works in practice, even though the practical functionality of the construct is not self-evident. In practice, this study comprises empirical research conducted in the steel business network during the period of October 2002 and September 2007. A list of activities was drawn up in order to analyse the case network and its operations and to collect information for the development process. Firstly, unstructured interviews were held in order to get a realistic understanding of the companies and their innovation activities. The first interviews were carried out in 12 companies, where the core competences, current level of collaboration, and facilities for utilising ICT tools are structured. As a result of the interviews, the offshore supply chain case was selected to be the development area for the VE prototype programming. Secondly, based on these discussions, a specific questionnaire for companies was designed in order to find out the critical issues of collaboration. In the questionnaire, representatives of 6 companies answered 34 open-ended questions covering such areas as information integration, knowledge sharing and collaborative relationships. Based on the interviews and the questionnaire, an ontology containing commonly agreed basic concepts was also formed. Finally, the case offshore project was chosen under deeper investigation and for process modelling. Theme interviews with the operational staff and key persons in the companies were held in order to find out the critical issues in information flows. At the same time, an iterative design process of the VE prototype was done (Clegg and Page, 2007). One of the primary criteria for constructive research is the demonstration of practical usefulness, including relevance, simplicity and ease of operation by the business community. Kasanen et al. (1993) propose a market-based validation to assess this aspect of a construct and have developed a market test based on the concept of innovation diffusion as follows: weak market test (the construct is applied in practice), semi-strong market test and strong market test (the benefits from the construct in fulfilling the objective can be shown). This study fulfils, at least, the weak market test criteria: at least one manager has decided to test the SteelNet system in a real business situation. In addition to that, the study partly fulfils also the semi-strong market test because several company managers have made the same decision. However, the semi-strong and strong market tests require statistical analyses of a substantial amount of the implementation data. In this study, we have to be satisfied with the qualitative impressions of the end users gathered in interviews. The SteelNet system was also in the field-test phase during the period of November 2005 and September 2007 within three companies. The main objective of the field test was to study the functionality of this VE application, but also to collect information for further development and maintenance. This qualitative study can be located into the normative area of business studies comprising of a theoretical and an empirical analysis. The findings from different sources were qualitatively analysed as an entity by the researcher group, and sometimes also by the company staff in order to develop a VE solution for the case companies purpose. It is, thus, characterised as modelling, prescriptive or recommending. This study uses the qualitative approach, and it is interpretative. For interpretative research, a given amount of subjectivity needs to be approved – interpretation is somewhat subjective in nature.


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Continuous innovation in virtual enterprise

3.1 Information and communication technology effects of continuous innovation In today’s knowledge-based economy, the key to a sustained competitive advantage is the ability to innovate and deliver new products and services to market ahead of competition. Innovation –– understood in the broad sense to include product, process and organisational innovation in the firm, as well as social and institutional innovation at the level of an industry, region and nation – is a major contributor to industrial competitiveness and productivity, but also to the creation of economic growth and social welfare of regions (Boden and Miles, 2000; Foray and Lundvall, 1996). Innovation has been studied in a variety of contexts, including in relation to technology, commerce, social systems, economic development and policy construction. There are, therefore, naturally a wide range of notions and definitions of innovation in the literature. However, a consistent theme has been identified: innovation is typically understood as the introduction of something new and useful. According to Boer and Gertsen (2003), CI is the ongoing process of operating and improving existing, and developing and putting into use new configurations of, products, market approaches, processes, technologies and competencies, organisation and management systems. This definition clearly includes tangible good-, process-, market- and organisation-based innovation (Clegg and Page, 2007). Innovative firms that are able to use innovations to differentiate their products and services from competitors, to mobilise knowledge, technological skills and experience and to create new products, processes or services, are on average twice as profitable as other firms (Tidd et al., 1997). However, individual firms almost never innovate in isolation. Innovation is an interactive process which involves cooperation, and firms form innovative networks (Edquist, 1997), such relationships that lead to new information, knowledge (also tacit knowledge), technology or other enabling resources for development and learning to the enterprise. These relationships enable networks to stay open for accelerating change of markets, technologies and new rivals. Besides balancing workload capacity, a key motivation for networking is the opportunity for mutual learning and wider access to competencies. Ebers and Jarillo (1998) state that the competitive advantage of a network arises from five sources: mutual learning, a strategy of cospecialisation, better information and resource flows, economic of scale and organising market structure with network members. Innovation networks are usually composed of the basic business networks of the firms such as exporters, importers, suppliers, customers and competitors. However, they also contact with the innovation activities of the universities, research institutes, trade associations, technology transfer organisations and banks, which fulfil and shape basic business network into innovation network (Baguley et al., 2006; Edquist, 1997). Technological revolution has radically changed the traditional concepts of innovation. ICT, increasingly wireless, offer actors in innovation networks new prospects for collaboration, access and shared information and knowledge. Especially, the internet and web technologies, called usually e-business technologies, reduce the importance of geographical location; it makes it easier for firms to reach partners, expand their customer base, launch new products into global markets, rationalise their businesses and renew their business models (Hinds and Keisler, 2002). However, we have no more than a

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rather limited understanding of the dynamics of the emergence of virtual networks, and especially about the role of individual actors in this digitalised process. The more radical the innovation activities of a firm are, the more likely it is that it will not be surprised by emerging technological trends or other major changes in its business environment. Simultaneous as innovativeness of a firm supports its competitiveness, the ability to manage new technology generates innovations, innovative business models and innovative milieus. By using internet and new web applications, allows members in the network to increase coordination and collaboration through the internet in terms of inventory management, demand management, production planning and control and new product development (Lee and Whang, 2001). By using internet applications, experts from different companies may work closely together, thus building a virtual space for collaboration (Kalakota and Robinson, 1999). Of particular importance is that these technologies make it easier to separate, trade and transport information (Antonelli, 2000). To take full advantage of information sharing, some significant organisational changes need to be implemented once information sharing in place. Companies should collaborate with their partners to achieve the common goals based on a high level of trust between companies (Hinds and Keisler, 2002). The network members need to redesign their information sharing systems so that they can provide the required information to the decision makers. The willingness of companies to share their information with trading partners and collaborate is one main initiative of visibility, that is, at having the right information in the right place and the right time in the right format. The other, perhaps even more important, is the effective use of ICT, with which the real-time data management can be achieved. Since technology costs are declining and usage is easier, such ICT applications offer companies the capability to more efficiently, effectively and rapidly move and manage information electronically (Bowersox and Closs, 1996).

3.2 Virtual enterprise Browne and Zhang (1999) determine VE as follows a temporary, cooperative alliance of independent member companies and indeed individuals, who come together to exploit a particular market opportunity. VE is frequently project-based, and requires quick-creating and quick-dissolving organisation, whose operation especially depends on fast and accurate information transactions. VE companies assemble themselves based on costeffectiveness and product uniqueness without regard to organisation size, geographic location, computing environments, technologies deployed or processes implemented. They share cost, skills and core competences which collectively enable them to access global markets with world class solutions that could not be provided by any one of them individually. The success of the VE depends on intensive information sharing, and it is enabled by sophisticated information technology, which makes business information transparent, seamless and easily accessible at any time and at any place. Time to market is greatly reduced through quick response manufacturing with integrated and coordinated product design and manufacturing from all the participants. Furthermore, VE pursues enterprise partnerships in order to achieve business success in a very competitive environment (Browne and Zhang, 1999). The success of the VE depends on intensive information sharing, and it is enabled by sophisticated ICT, which makes business information transparent, seamless and easily accessible at any time and at any place. The digital structure of the VE concept captures customer’s real choices in real-time and transmit them digitally to other participants


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within the network. This kind of structure emphasises simultaneous communication between different parties and the total information integration, as well as communication between the consecutive phases of the process (Clegg and Page, 2007). Seamless material flows are achieved by replacing the notion of a sequential and linear chain of information exchange with the set of simultaneous information exchange that span the members of the supply chain. In addition, the information about status of orders can be monitored continuously by multiple parties, including the customer. Instead transmitting information to nearest neighbour, it is essential to be able to interconnect simultaneously with all network members (Bovet and Martha, 2000). The customer dominates the supply chain and the chain is organised around the customer order. In the transaction web, different transactions, such as ordering and paying, can be undertaken in one place and at one time. It is no longer just about the supply – it is about creating value for customers, the company and its suppliers. Nor is it a sequential, rigid chain (Hinds and Keisler, 2002). Instead it is a dynamic, high-performance network of customer–supplier partnerships and information flows. It is agile and scalable, accommodating short-term fluctuations and long-term growth. It produces speed – both in bringing new products to market and in delivering orders to end customers. It uses ICT to create new information flows that span layers of production and distribution, thus eliminating aging inventory. It operates at the speed needed to satisfy real customer demand. It reliably and precisely delivers on promises made to customers. Finally, it responds flexibly to changes in customer or market requirements. As speed, reliability, convenience and customisation become increasingly important to customers across industries, an increasing number of companies is realising how the digital supply can please both customers and stakeholders (Bovet and Martha, 2000; Greis and Kasarda, 1997).

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Case study: information and communication technology in innovative virtual enterprise

Information and knowledge sharing is vital for innovative VE in order to create new products, services or processes. In practice, information sharing among enterprises with heterogeneous system environments and data sources is a very challenging task that requires the use of new technologies. The traditional knowledge engineering approaches with large-scale knowledge bases are inappropriate because the distributed nature of VE. Agent technology can provide a new approach to share, access and manage information, while agents are autonomous, problem-solving computational entities capable of effective operation in dynamic and open environments. They are able to provide suitable solution for complex process management among networked companies. This work describes agent-based approach to share information in the case VE, called SteelNet. The aim of developing interorganisational system for VE in traditional industry sector is to support the adoption of ICT and the development of innovation network. Especially, SMEs suffer from the lack of efficient, flexible and reasonable priced software solution to integrate their activities with those of their suppliers, customers and partners. First, they need basic information sharing abilities in order to achieve CI. SteelNet system is agent-based system that uses internet as a communication channel among enterprises. Agent technology provides a feasible solution for information and knowledge sharing in VE while it can be used for information sharing among heterogeneous applications and systems and to support networking in industrial

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environment despite the domain. The prototype implementations ensure the flexibility and reconfigurability of agent-based solutions while it strongly supports a-plug-andoperate approach. In SteelNet system, agents represents the major functionalities of the companies (e.g. manufacturing, management and transportation) and are able to communicate and collaborate with the other agents in the other companies by using agent communication language (ACL) through the internet. SteelNet is a multiagent system, where each company has several agents with different objectives and which communicate with their counterparts in the collaborating companies as well as with the agents in their own company. 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 1 shows 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. VE sets special requirements for interorganisational system and the case enterprises emphasised most the flexibility of ICT system and support for following activities: x

a company joins/leaves the network

x

BN has different projects/deliveries

x

BN collaborates with other networks

Figure 1

SteelNet system (see online version for colours)


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x

equal rights and responsibilities for each company, each company can host inquiries and projects

x

interoperability with legacy systems with different levels of integration, for example for strategic, frequent and occasional partners

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secured information sharing.

The obvious requirement was the real-time delivery of supply chain information, which can regard product availability, inventory level, shipment status, production requirements, demand forecasts and production schedules. The SteelNet system supports several vital activities in VE, the enterprises can do the following tasks electronically. x

Sending and receiving tenders and invitations for tenders in VE. Controlled transparency needs to be taken into account (the invitation for tender is sent to all companies or to selective ones only).

x

Changing of tendering data into order data is possible for the network members.

x

Sending work orders to all member firms simultaneously.

x

Follow-up of production process in different firms within the network in real time.

x

Centralised documentation handling for VE (quotations, orders, etc.).

x

Reservation of free resources through the system. Resources can mean persons, equipment or services.

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Providing usage reports for the firms: volumes of usage, usage times, services used, change management, etc.

SteelNet system has special features that increase innovation ability. The first feature for the content of agent-transmitted information is that it is real-time. Moreover, real-time information is available to all the companies involved in the particular project. Implementation of a general cross-organisational ICT system is costly, time-consuming and risky, however, the adoption and use of SteelNet system is easy and profitable without high investments. The SteelNet system enables the interoperability of the companies’ own legacy systems via agent messaging or web browser without any extra work. Information in SteelNet system is also accurate, as intelligent agents deliver the information through the internet. When the information is written into the system, it flows through the entire supply chain. Information is also exception based in order to highlight problems and opportunities. Intelligent agents are capable of reasoning based on the rules given by the user or knowledge learned from an open environment. In addition, an agent system is flexible and it can be organised according to different control and connection structures. The functionality of SteelNet system was validated in two cases, in the procurement process and real-time manufacturing follow-up in the business network. Therefore, the content of the information is restricted to these two domains and the combination of agents is limited to these cases. Security and access privileges are the two most important barriers in implementing internet and extranet technologies in a supply chain. In SteelNet system, authorisation of each user is controlled and the information transmission is conducted via secure socket layer (SSL). Each company controls the level of user rights of their own employees. Therefore, only authorised users share information about a certain supply chain in SteelNet system.

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Conclusions and future research

VE have become an important solution for businesses. Several well-known innovative companies such as Cisco and Nokia have organised themselves based on this paradigm. There is the evidence that network companies perform very well within their own industries. Network companies are at the moment more common in the fields affected by rapid technological change and growth. Networking is a way to acquire sensitivity and ability to adapt oneself to fast changes. This, however, do not constrain the VEs into high-tech industries. Network companies are applicable to all industries that are dynamic in nature.

5.1 Research implications of this work The SteelNet system represents a new innovative application for collaboration, information and knowledge sharing in dispersed environment. Although, the use of agent technology in VE is quite new, it is a promising approach while agents can make autonomous, reactive and proactive decisions. At the moment, agent-based systems are used in several application areas, such as manufacturing, process control, electronic commerce and business process management and enterprise integration (Blake and Gini, 2002; Collins et al., 2002; Karageorgos et al., 2002; Luck et al., 2003; Shen et al., 2003; Xu et al., 2007). Thus, it has been suggested that the semantic technologies of the future would have a set of features combined from agent technology, web services and service grid (e.g. Pollock and Hodgson, 2004). With the SteelNet system, companies – small and large – can do several activities electronically from tendering to delivery. Every company via SteelNet system has realtime information available from the tendering phase. The production phase itself can start even half a year later than the tendering process. All companies in the supply chain can improve and, in the long term, plan their own activities based on real customer orders, not on forecasts. Using SteelNet system, it is possible to share information about the tendering situation and potential orders, giving a real picture of the demand. This is a way to avoid the distortions caused by fluctuations in demand, that is, the bullwhip effect.

5.2 Industrial implications of this work It has to be kept in mind that companies are not eager to share information unless there is positive proof that sharing information is equally beneficial for all members of the supply chain. The withholding of pertinent information by just one member in the supply chain can lead to a loss of trust and dysfunctional behaviour among all the members in the chain, leading to a situation where even the best technology or information system is not adequate. 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. Particularly, among the small manufacturing companies, process reengineering and integration is a very challenging task and the development resources are limited in SMEs. However, companies of all sizes participating in the development of SteelNet showed determination and willingness to learn about the benefits. Interestingly, the personnel at the operational level were in many cases the first to realise the benefits of the new system and practices. At this point, it is difficult to describe all the benefits or improvements brought by the SteelNet system, as some of them are not directly measurable and will only be realised


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after the system has been in use for a longer period of time. In order to gain the full benefits of the SteelNet system it should be expanded to other supply chain processes and supply chain links (now only purchasing and manufacturing follow-up where covered). An important link to be included in the system is for instance, the logistics service providers in the steel manufacturing network. To conclude, this study provides a novel and interesting approach for VE in CI. The case VE, SteelNet system, could be used in subsequent research as well as in practice. This research calls for continuation and it is not complete without strong business model design efforts and emphasis on manufacturing. Movement towards total collaborative innovation is a long-term journey, full of difficult decisions and full of operations to change.

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