Experiences Gained Applying Concurrent Engineering Tools to ...

The 8th International Conference on Concurrent Enterprising. Rome, Italy, 17-19 June 2002

Experiences Gained Applying Concurrent Engineering Tools to Networks of SMEs Roberto Tononi 1, Gianfrancesco Amorosi 2 1 2

ENEA-Casaccia, Via Anguillarese 301, 00060 S.M. di Galeria (RM), Italy, [email protected] Tech I. S. Consultant & ESOCE Italia, Via Donatello 21, 20131 Milano, Italy, [email protected]

Abstract At the end of 2001, ENEA concluded a wide research program on tools and methods for Virtual Enterprises made up by Small Medium Enterprises (SMEs). The program, which included four different projects, focused on the development of an organizational and functional model for these Virtual Enterprises and on the definition and the development of tools deemed as the most appropriate for these networks of enterprises. The program has definitely assigned to the Concurrent Engineering approach a position of premier importance for the success of such networks. The paper reports on a few significant results and on some experiences gained with the many SMEs involved in the program. Keywords Virtual Enterprise (VE), Concurrent Engineering (CE), Research Consortia, Quality Function Deployment (QFD)

1 Introduction At the end of 2001, ENEA, one of the Italian major research institutions, concluded a research program named “Techniques of cooperative engineering and services provided by Research Consortia to SMEs, through computer networks”. The program was developed on a national basis, had included five different projects and was financed by the Italian Department of Research, by UE and by ENEA itself, for a total amount of about twenty million euros over four years. The overall objective of the program was that of supporting SMEs and the array of freshly formed research consortia in the depressed regions of southern Italy. Thirty SMEs, grouped in six networks, have been involved in the program with the assistance of five Research Consortia (i.e. Consortia whose main activity is research).

2 Framework of activities and research approach The initial feasibility studies, of the projects included in the program, had shown a clear need for most SMEs to resort to networking with each other in order to cope with the challenges of the global market. The consequent focus on networks of SMEs highlighted the theme of cooperation and resulted in a convinced effort to introduce the approach of Concurrent Engineering (CE) (Biren 1996) within these networks. Changes of so large a range also appeared to require the study and the development of an appropriate organizational and functional model for these networks of SMEs. The initial part of the program was devoted to the identification of the most appropriate set of innovative methods and technologies to introduce within networks of SMEs and to the development of the most appropriate business model which could allow, on the one hand, the solution of the critical problem of the coordination of the network member activities (Bonfatti et al. 1996) and, on the other hand, an effective utilization of those methods and technologies.


Since Concurrent Engineering tools help both in enhancing the cooperation among network members (Camarinha-Mathos et al 19999) and, as a consequence, in the coordination of the same members, the set of methods and technologies, envisioned as the most appropriate, included mostly CE tools, part of which identified as the basic endowment of any network and others identified as additional and specific of the activities of each particular network. The basic tools (such as multi-user video conferencing, a SW application of Quality Function Deployment, virtual and real prototyping tools ..) were requisitioned from the market, such as in (Tecnomatix 2000); some of the other specific tools, believed of higher strategic values for SMEs in southern Italy, were developed from scratch because the market had no significant offer. Most of the financial resources of the program have actually gone in the development of these specific tools. As to the activities of development of the most appropriate business model, an initial framework of network design criteria and of a set of operational procedures and practices was proposed by the ENEA research group engaged in the program; the model presented a definite instance of Virtual Enterprise (Franke 1999). Then the attention was turned to actual groupings of SMEs to be involved in the program in order to analyze, evaluate and experiment the basic features of the business model, so that to provide support for what previously proposed or to provide indications for the necessary changes. The involvement of these groupings also gave a fundamental help in defining the user specifications of the CE tools that were developed within the research program.

3 Program results and experiences Three different kinds of results are to be mentioned in accordance to the three kinds of activities performed within the program.

3.1

VE Model

As to the Virtual Enterprise Model a very long process, much longer than expected, has been necessary in order to have the groupings of SMEs get into all the aspects of the model so that to make it a live set of business behaviors. Only some parts of the model have been concretely experimented, curiously with the inclusion of those considered too advanced at the beginning of the program, such as the implementation of all the business practices in order to qualify ISO 9000 the network of SMEs, regardless the qualification of the network members. For some aspects of the model, the reaction and the collaboration of the involved SMEs has been sluggish and apathetic; the conclusive analysis performed at the end of the program has showed that this kind of contingencies has been faced whenever each member SME was forced to make precise plans on their production capabilities or to provide data related to those plans; such as, for instance, when each member SME was asked to provide the whole featuring of its activities, such as time of intervention, costs as functions of changing production conditions and the like. These difficulties have revealed, as confirmed in other experimentations, a management style based on impromptu and quite widespread among small enterprises as those involved in the program. This factor has been identified as one of the most serious obstacles to the effective implementation of a Virtual Enterprise model, since it corresponds to a cultural feature of that entrepreneur who may consider as a skill his/her ability to deal with problems without adequate planning. At the end of the program a Virtual Enterprise model (Franke 2002) has been agreed on by all the involved groupings of SMEs; of course, on some details different groupings have different positions; that simply means that the model is to be taken as flexible on those details. The basic features of the model (Tononi et al 1999) are the following:


•

Both vertical and horizontal integration are pursued; the former to reach a wide control of the market on the producer side, the latter to reach the appropriate production capability.

•

Although all members have the same rights and duties, but of course different functions, all of them refer to a management hub (the so called VE Manager) and to a technical hub (the so called Technical Service Center). The strategic plans are proposed by the VE Manager but approved by a VE Committee which includes the representatives of each SME member.

• •

The VE Manager is also in charge of coordinating the activities required by each procurement.

•

The Technical Service Center is in charge of the acquisition of the tools that are to be utilized by all or many VE members, so that to avoid a shared ownership of those tools; but the Service Center is also in charge of providing all members with the appropriate assistance to allow them to utilize the above tools or simply to service them by means of those tools.

•

The network of SMEs behaves in agreement with a whole set of procedures and practices that each member is required to underwrite when joining the Virtual Enterprise. Procedures and practices aim at anticipating solutions of problems to be faced during operation, in an effort to pursue high levels of effectiveness and efficiencies (Tononi et al 2000). Despite the involvement of six networks of SMEs, the experimentations have been conducted only on some aspects of the model and the lesson learned has been that financial resources higher than those used (1-2 % of the total program financing) would be necessary to conduct a full range experimentation in order to realize one or more instances of Virtual Enterprises made up by SMEs, which, having applied the whole endowment of operational methods and of technological tools in actual procurements, may be seen as reference for successful business behavior.

3.2

Tools collected from the market

As to the basic tools requisitioned on the market, most of them have been acquired even though they are fully featured for large enterprises rather than for SMEs. That has not been a serious problem as long as a network of SMEs, when structured in accordance with a Virtual Enterprise business model, is actually configured like a large enterprise which controls most or the whole product/service life cycle.

3.3

Tools developed for the VE made up by SMEs

As to the CE tools developed within the research program (of which one of the most significant is described in the next section), the results have been better than expected: the program has made available tools which are premier at world level and are tailored on the real necessities of their expected users. These results have been made possible by the involvement, in the development of these tools, of the many SMEs and, in particular, of the Research Consortia, i.e. of those which best understand their own necessities.

4 Significant instances of the activities conducted within the program In order to provide insights about the program, the following describes three specific activities performed within the research program.


4.1

Verification of the VE Model

For the activity of verification of the viability of the Virtual Enterprise model with the networks of SMEs involved in the program, the best approach would have been that of applying the model in actual procurements, but such wide an effort would have required a separate project to be conducted after the research program; as a matter of fact, such a project is currently being set up. The verifications conducted within the program have been the following: •

The applicability by networks of SMEs of most of the CE tools, both requisitioned and developed; that has required an extensive program of training and has shown that courses provided over the internet would best suit SME workers because such learning events would be permanently available and accessible anytime from anywhere.

•

The directive of pursuing ISO 9000 qualification has been tested and positively implemented with one network of SMEs.

•

All involved networks have gone through the application of the methodology of Quality Function Deployment with positive results.

•

Each involved network has set up its cooperative information system that makes the network ready to manage procurement activities through a flow of controlled and preestablished information and processes (Afsarmanesh et al 1999). All involved SME networks have been submitted questionnaires on their degree of acceptance of the organizational features of the model, in few cases presented in form of alternatives. The responses of the networks have been positive and homogeneous in almost 90% of the questions ; gray areas have turn to be the questions on how to deal with members that do not meet their commitments (Fisher et al 1985) and on whether the VE Manager should be an independent enterprise which shares risks and revenues with the other VE members or simply an “employ” of the legal entity (most of the times a consortium) which represents the Virtual Enterprise.

•

4.2

Realization of an innovative CE tool

One of the activities of the research program has been that of developing a CE tool specific for SMEs devoted to the development of high style products (the so called “made in Italy”). The tool is referred to as a “Sketch 3D Modeler” and allows the transformation of sketches of objects with important style content, drown by stylists with pencil and paper, into 3D virtual models suitable for: • providing a realistic view, of the objects represented by the sketches, both to whom is in charge of the material realization of the objects and to their potential buyers; •

allowing exploration and manipulation of the 3D models in order to check on the functionalities and to choose auxiliary devices and features which best meet the customer tastes before the objects realization;

•

helping the object manufactures with CAD models built after the virtual models;

•

providing a virtual catalogue of objects and of components accessible through the internet in order to build new objects or simply to modify those already available. As a CE tool, the sketch 3D modeler aims at closing the gap between stylist and manufacturer and at involving the potential buyer into the process of tailoring the objects to his/her wants and needs; to this extent, it should gain a competitive advantage to businesses, manly small enterprises, engaged in the production of high style objects, such as jewels, other personal accessories (bags, umbrellas, beauty cases..), small appliances, sculptured stones, ceramics and the like.


The sketch, provided by the stylist as standard orthogonal projections, is initially scanned to turn it into a bitmap image which is then subjected to a filtering process in order to eliminate the noise introduced by the scanning. Through appropriate algorithms, the image contours are approximated to polygons and polylines (from raster to vector format). Critical lines and points are identified so that to reduce the number of straight and curved lines ; details are investigated and errors eliminated. After identifying the orthogonal axes of projection which make up the reference system, the coordinates x, y, z of the relevant points of the object are calculated so that to allow the 3D representation of the object referred to by the sketch. The 3D model is then imported into an environment of virtual reality to “dress it” with the desired textures, to view it under various light sources and to allow the exploration of its functionalities such as “to open it”, “to turn it”, “to press it” and the like; the appropriate changes to the object can be implemented at this stage. Afterwards, the 3D model can be exported into a CAD environment to turn it into an object appropriately represented for the manufacturing process.

4.3

Application of Quality Function Deployment

The QFD methodology (Akao 1990) is often considered as one of the most relevant CE tools in that it involves many, if not all, business functions in the effort of defining the product/service that best suits the target market of an enterprise. Within the research program, this methodology has been applied to virtual enterprises made up of SMEs, may be for the first time. The basic reason for proposing this application stands not only in the potential advantage that can be gained in identifying the best product/service for one’s own customer, but also in the fact that this application helps develop, in each VE unit, a feeling of membership to the network and contributes to turn the aggregation of SMEs into a system able to operate as a whole, i.e. into a Virtual Enterprise by its very definition. QFD methodology introduces important business organization guidelines, because it is a customer orientation methodology with a structured and deepened process of business planning and implies the choral participation of the company as in the Concurrent Engineering approach. The following refers to the QFD application, by one of the involved SMEs networks, to the customisation of a micro fluidic cell. The cell had already been realized and applied to biological experimentation in micro gravity conditions in outer space. After that exploitation, the network had met a chance to introduce the cell in the heath industry market but needed an appropriate customisation of its product offer. Each network member agreed upon appointing a representative for a specific working group, coordinated the VE Manager and by a consultant expert on QFD methodology (http//pws.prserv.net/StudioSIT). The activity took two months and five meetings of the working group. According to the main objective of QFD, the activity focused initially on the identification of the customer requirements and of the product characteristics with the best potential to satisfy those requirements. Afterwards, the activity of analysis also included the supply strategy; with all that, alternative product concepts were defined and compared from the customer point of view, as explained next. The first step was that of proceeding to an unambiguous definition of “the customer”. Various reasoning conducted to identifying the customer in the value added distributors as opposed to the final users. After agreeing on the criterion of looking for explicit as well as implicit and even latent needs of the customer, the voice of the customer (VoC) was specified through a requirements/needs tree (figure 1), down to a level of detail that allowed the substitution of customer needs with product features. A brain storming session was necessary to select the product features most significant to the customer requirements.


Requirements Tree

trading proposal

operability

affinity diagram experiment success

liquid does not discharge

flexibility of use

various liquids may be used

ease of use

low price

timeliness

low lead time

speed of set up

unidirectinal liquid transfer compatibility of diff. sterilization types

biocompatibility

ergonomy

trading aspects

service

sterilization preserved in experiment area

ease of start up

reusability

low Time To Market for new versions

system functionalities lifetime

help when out of service

availability of spare parts

Figure 1 Due to the short time available, the application was limited to the product definition phase, therefore considering mainly design aspects; however, adopting a Concurrent Engineering approach, voices extracted from all the phases of the product lifecycle are to be included in the characteristics provided in the initial product definition. The next step was that of understanding to what extent the selected product features were important for the customer satisfaction. A product view, directly targeting customer requirements, was defined in terms of: •

the importance that the customer attributed to each need

•

the appraisal of the product as available before its customisation

•

the business strategy to define the product to offer to the new “customer”

•

points of force and business image

Also what offered by competitors was duly considered. The product features evaluations versus the customer requirements are depicted in figure 2. The next step was that of identifying alternative product concepts and of carrying out their comparison according to the criterion of the satisfaction of the customer expectations. This activity met much interest and was developed through four steps: • identification of metrics for every feature •

identification of appreciation levels related to each metrics value assumed by every feature

•

identification of the relevant alternative product concepts corresponding to different bundles of features

•

comparison of alternatives

1 NO OUT FLOW OF LIQUID

5 10,4 5 4 8,3 5 4 8,3 4 DIFFERENT STERILIZATION TYPES 2 4,2 5 NO CONTAMINATION 5 10,4 1 6 MORE LIQUIDS CAN BE USED 2 4,2 7 LOW PRICE 3 6,3 -5 8 ERGONOMY 3 6,3 3 9 SPEED OF SET UP 3 6,3 3 10 EASE OF START UP 3 6,3 11 REUSABILITY 3 6,3 12 LOW LEAD TIME 1 2,1 13 LOW TIME TO MARKET FOR NEW VERSIONS 1 2,1 14 SYSTEM DEPENDABILITY 3 6,3 15 ASSISTANCE 3 6,3 16 AVAILABILITY OF SPARE PARTS 3 6,3 TOTALI 48 100

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53 17 66 25 53 21 20 48 20 34 15 18 12 6 25 39 472 11,2 3,6 14,0 5,3 11,2 4,4 4,2 10,2 4,2 7,2 3,2 3,8 2,5 1,3 5,3 8,3 100,0

IMPORT. CHAR. (NO CORRECTION) “ “ % (NO CORRECTION) IMPORT. CHAR.

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HELP DESK

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SUPPLY CRITERION

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Figure 2 Eight product alternatives were conceived: 1. the available product with no customisation (taken as a reference) 2. the available product with improved performance and increased reliability 3. 4. 5.

“ “ “

“ “ “

“ with features that made it easier to use “ with higher customer service “ with engineering and cost reduction

6. 7.

combination of 2 and 3 combination of 6 and 5

8. combination of 6 and 4 The alternatives were analysed versus their capability to meet the customer needs, applying the Value Analysis methodology. To that extent, the purpose was that of maximizing the “value” perceived by the customer in terms of: •

how much every single need was satisfied by the alternatives

•

the importance that the customer attributed to every single need

• the cost that the alternatives implied in order to satisfy every need This analysis allowed: •

comparisons of the alternatives

•

revision of the alternatives

•

revision of customer requirement priorities

• revision of product features The results of the activity consisted, as usual in any QFD application, in tables and matrices based on agreed data and rules which constitute a simulation model and are open to future updates and to further enquiries.


5 Conclusions The introduction of Concurrent Engineering tools and the adoption of Virtual Enterprise business models within networks of SMEs take more money and longer times than can be expected. From the experience gained through the research program conducted by ENEA, a subjective evaluation on the merit is of something like 100 keuro for each SME involved in a program aimed at realizing a Virtual Enterprise network in full operation; the program duration should be no less than 24 months. However, this evaluation, which does not include the acquisition cost of CE tools, implies dealing with entrepreneurs with a good level of education and with a spirit of improvement and innovation which is to be considered as the basic characteristic. As experienced within the research program, difficult market contingencies are incentives to the creation of virtual enterprises, but are not sufficient conditions; a credible consultant entity should guide the VE creation process and should take care of the necessary training of the member SMEs making e-learning available after traditional class teaching. References Afsarmanesh, H., Garita, C., Hetzberger, L. O. and Santos, V. 1999 Management of Distributed Information in Virtual Enterprises: the PRODNET approach. Paper presented at The International Conference On Concurrent Enterprise (ICE ’97), Nottingham, UK, October. Akao, Y. 1990 QFD : Integrating Customer Requirements into Product Design (Cambridge: Productivity Press). Biren, P. 1996 Concurrent Engineering Fundamentas ( New Jersey: Prentice Hall PTR) Bonfatti, F., Monari, P.D. and Montanari, R. 1996 Information flows and processes in an SME network. Working paper, PLENT (Planning Small-Medium Enterprise Network) ESPRIT Program Project 20723, Modena, Italy. Camarinha-Mathos, L.M. and Lima, C.P. 1999 Coordination and configuration requirements in a Virtual Enterprise. Paper presented at The Working Conference on Infrastructures for Virtual Enterprises (PROVE’99), Porto, Portugal, October. Fisher, R and Ury, W. 1985 Getting to YES (New York: Penguin Books). Franke, U. J. 1999 The virtual web as a new entrepreneurial approach to network organizations, ENTREPRENEURSHIP & REGIONAL DEV ELOPMENT, 11: 203-229. Franke, U.J., 2002, Managing Virtual Web Organizations , Idea Group Publishing, Pennsylvania USA - chapter XI: “Networks of SMEs as Virtual Web Organizations: an experimental program aimed at supporting SMEs in depressed areas of Italy” Tononi, R., Amorosi, G. http//pws.prserv.net/StudioSIT Tecnomatix 2000 Tecnomatix Announces eMPower Version 4.0 – the Web-Enabled e-Manufacturing Suite of Solutions. Press Release, May 25, http://www.tecnomatix.com . Tononi, R. and Maturano, N. 1999 A Virtual Enterprise model as proposed within project ICIV aimed at supporting networked SMEs. Paper presented at The Working Conference on Infrastructures for Virtual Enterprises (PRO-VE’99), Porto, Portugal, October. Tononi, R., Amorosi, G. and Federici, G. 2000 SMEs, Research Consortia and Concurrent Engineering – the basic ingredients of the Virtual Enterprise being experimented by ENEA in southern Italy. Paper presented at The 6th International Conference on Concurrent Enterprising (ICE 2000), Tolouse, France, June.