virtual enterprise / opim concepts: an institutionalization framework · virtual enterprise /opim...

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Virtual Enterprise / OPIM Concepts: An Institutionalization Framework

G. D. Putnika), P. F. Guimaraes b), S. C. Silvac)

a), c) University of Minh 0, Production Systems Engineering Center Azurem, 4800 Guimaraes, Portugal, fax.:+351-53-510268 e-mail: a)[email protected])[email protected] University of Minho, School of Business and Economics Gualtar, 4700 Braga, Portugal, fax.:+351-53-676376

b)

e-mail: [email protected].

Abstract Virtual Enterprise (VE) and One-Product-Integrated-Manufacturing (OPIM) are new concepts with the objective to develop an organizational framework {or competitive enterprises. The OPIM system is a special case of a VE. It is a new organizational frame proposed for manufacturing system/enterprise integration over one-product manufacturing with the life time which corresponds at most to a product life time. In this paper we present a framework for the institutionalization of the VE / OPIM concepts through two global phases - the first is that of developing knowledge and technologies for VE / OPIM systems design and operation and the second is the development of an infra structural environment for VE / OPIM systems design and operation, that is, building a virtual market of independent primitive enterprises candidates for the VE / OPIM systems integration.

Keywords Virtual enterprise, virtual enterprise institutionalization, One-Product -Integrated-Manufacturing, OPIM, OPIM institutionalization, global manufacturing, telematics technologies.

1 VIRTUAL ENTERPRISE AND OPIM SYSTEM - INTRODUCTION

The Virtual Enterprise (VE) and One-Product-Integrated-Manufacturing (OPIM) system are concepts with the objective to develop an organizational framework (or competitive enterprises. Under the One-Product-Integrated-Manufacturing (OPIM) concept, a new

L. M. Camarinha-Matos et al. (eds.), Balanced Automation Systems II© Springer Science+Business Media Dordrecht 1996

392 Part Thirteen VirtuaVExtended Enterprises

manufacturing system structure is conceived for every new product. The Integration of a oneproduct enterprise is realized over a set of independent cells domain. They are connected by the wide-area-network using multimedia telematics technology to provide negotiation in real time. This characteristic provides the possibility of constituting one-product entetprise from elements that are localized globally, especially for the manufacturing operations which are information based. In this way, the concept of global manufacturing is applied. The life time of a one-product factory/enterprise corresponds at most to a product life time. This organization form is called the One-Product-Integrated-Manufacturing (OPlM) System We say metaphorically that the system is characterized by the following expression the factory models flow through the product. The OPIM system is a physical implementation of a virtual factory conceived for only one product and in that sense it is a special case of the virtual entetprise concept, or put differently, it is a subset of the VE concept:

VE :J OPIM

The VE/OPlM concepts are built on satisfaction of the entetprise's needs for competitiveness. The VE/OPlM offers lower prices, higher quality of products and competitiveness, and high flexibility for creating manufacturing systems (Putnik G., Silva C. S., 1995).

The enterprise competitiveness is built on different factors. In the recent SME Manufacturing whee~ SME (1993), six factors were identified: 1) Customer, 2) People and Teamwork in the Organization, 3) Shared Knowledge and Systems, 4) Processes, 5) Resources and Responsibilities and 6) Manufacturing Infrastructure. Regarding analysis of needs for VE / OPIM concepts and their institutiona1ization, in this paper we will focus our analysis on what we think to be the three most important factors for an enterprise's competitiveness (which in part corresponds to the six factors identified by the SME) (Putnik G. D., Guimaraes P. F., Cunha M., Silva C. S., 1995):

The rust important factor of the enterprise's competitiveness is the physical and organizational integration of its resources.

The second important factor of the entetprise's competitiveness is the environment in which the enterprise acts and the interface between the enterprise and the environment.

The third important factor of the enterprise is the enterprise's ability to transform itself to a competitive enterprise, that is, the ability to re-engineer its organization.

2 USERS AND THEIR NEEDS FOR VElOPIM CONCEPTS DEFINITION

Users targeted by VE / OPlM concepts are:

1. Any size company, very small, SMEs and larger companies all in industrial and services sectors, offering and requiring services on indu~ ie. manufacturing activities (teleservices, teleworking);

2. Any person which is self-employed, home users, or remote users groups, either users of information services or services providers (they can also be disabled and elderly people living in remote sites) to industry, i.e. manufacturing activities (offering and requiring teleservices, teleworking);

3. governmental and non-governmental non-profit institutions.

Needs of the first users group are basically three:

Virtual enterprise /OPIM concepts 393

• strengthening competitiveness through access to competitive resources of services and knowledge (high value-added resources) which are resources provided by teleworking and teleservices, information systems, videoconferencing, etc; needs of larger companies are also decentralization from one site, especially from large cities using competitive locations as a competitive resource and specific economic and cultural advantages at different locations;

• flexible and dynamic process re-engineering leading to dynamic integration on new products, services and business development based on the networked underlying universe of resource entities ( that is a set of companies and persons which provide teleworking and teleservices using telematics technology ), on the VE / OPIM basis;

• needs of advanced business communication systems (ex. Electronic Data Interchange).

The needs of the second users group are:

• access to information services; • access to networks of enterprises, to offer their services from remote sites; • integration and co-operation with SME and large companies for competitive development of

complex processes, products, services and business. The competitive base, in this case, is, for example, avoidance of traveling and transportation costs, use of free and low-cost facilities (own home) and independence of distance.

The needs of the third user group are:

• To stimulate creation of a number of new small and very small companies, probably a great number of them with self,.employed persons which can include only one machine, therefore having a large impact on social policies;

• To obtain a higher level of social effiCiency through the improvement of the provision of information services and of the decision processes inside these institutions.

These needs are to be satisfied at two levels: • 1st level - Functionality; • 2nd level - Implementation.

2.1 Functional analysis

The functionality of the VE/OPIM concept is based primarily on: 1. resources integration; 2. advanced communication tools as a means for resources integration.

1. The physical and organizational integration of initially independent resources is the first important factor for the virtual enterprise synthesis. Three types of "primitive" resources can be recognized. Process resources, which include machines for raw material transformation into parts and products, namely machine tools, robots and other industrial equipment; computational resources, which are determined by computer hardware and software and knowledge resources le. human knowledge resources (the automated intelligent systems based on AI, knowledge bases, etc. are considered here as a computational resource), figure l. The feasibility, the flexibility and, finally, competitiveness of the virtual enterprise is highly

394 Part Thirteen VirtuallExtended Enterprises

dependent on the above mentioned resources integration and on the integration process itsel( that is, on its performances.

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Figure 1 Enterprise resources to be integrated and their environment

In Figure 2. we present a set of elementary cases to which we can apply the VE/OPIM concepts: o case - This case is characterized by the organizational and/or physical integration of resources. For most of the existing tasks in an enterprise (factory) the level of organizational and/or physical integration of resources is sufficient. This situation is typical of a stable market situation, with no significant changes of customer demands. Integration is achieved by total automation or by means of a human interface, successfully performed by human communication directly or by classical communication tools (paper, telephone - many times in very close physical position). The success of the automation concept and of the classical communication technology precludes the need for the VE/OPIM concepts. No need foT VEiOPIM concepts.

"Case 0" is a very rare situation nowadays. Almost every new customer demand today implies new resources in order to achieve optimality, i.e. the best production practice. In other words, access to the best resources determines the competitiveness of the modem enterprise.

Today's enterprises are characterized by the lack of resources to achieve higher competitiveness.

Cases I to IV represent situations where there is a lack of some resource and insufficient organizational and/or physical integration of some resources needed for successfuL competitive satisfaction of customer demands:

I case - III case: Two types of primitive resources are integrated. Knowledge resource (I case) or computational resources (II case) or process resources (1lI case) are not available. Efficient access to independent resources is required for competitive satisfaction of customer demands. Need for VElOPIM concepts.


IV case - Only one kind of resource exists and it needs access to the other two. These mayor may not be integrated. In any case the integration of the three kinds of resources is a demand. Need for VElOPIM concepts.

Figure 2 Resources distribution and their integration

Case I to III are common and well known. The IV case is very important because a total independence of each one resource implies small and very small companies leading, in the extreme case, to the self-employed person company. By use of telematics technologies for cooperation among independent resources entities, cells providing industrial services, we move towards the dynamic creation of virtual enterprises.

This elementary analysis shows the hardness of the virtual enterprise synthesis/integration problem The virtual enterprise synthesis process is performed over the set of candidates for the virtual enterprise integration. These "candidates" represent structures with different complexity of primitive resource elements integration. The set of candidates (structures integrating primitive resources) corresponds to the power set of the set of primitive resources and, thus, the problem of the virtual enterprise synthesis (integration) belongs to the NP-class.

2. Communication tools should provide flexible access to competitive resources distributed geographically, making economically unattractive direct contact person-to-person. This implies the highest level of communication among the enterprise's resources (to be integrated and being integrated), performed in an organized multimedia and information environment and can be seen as a key for competitiveness .. Analysing communication channels among three types of resources, we can identifY needs for the development of a telematics interface between human knowledge resources and processes resources and between human knowledge resources and computational resources. This means that we can identifY needs for developing telematics interfaces for control of machine tools, robots and other industrial equipment and for


control/use of remote hardware and software, (see figure 3). (A unmanned communication between the machine tools, robots etc. and computers is necessary).

By integrating globally distributed resources the global manufacturing concept is achieved.

2.2 Implementation analysis

The implementation of an VE/OPIM concepts is based primarily on the following: 1. Development of environmental infrastructure for the VE/OPIM systems design and

operation. 2. Enterprise organization re-engineering, focusing on the transition from a fixed enterprise

organization, characterized by rigid production processes and management to a service oriented and dynamic organization where prime resources are information and knowledge.

3. Legal aspects.

1. Environmental infrastructure is the second important factor of enterprise competitiveness. By the environment here we mean the organizational framework for enterprise-enterprise and enterprise-customer communications and exchange of services (products) and the customers themselves. In positive technical and economical terms, the environment is represented by the market, which includes customers and companies candidates for the VE/OPIM system integration, and the institutional organization of the market which is its organizational framework. This implies the highest level of communication among enterprises and the customers based on multimedia communication. In other words, it means the development of a telematics interface among enterprises and the customers, (see figure 3) to provide the competitive access to any potential customer and to any potential competitive resource.

Since this environment represents the market where the communication concept is built upon, with the support of multimedia telematics technologies, we refer to a virtual. electronic market. as a natural environment for the successful implementation and application of the VE/OPIM concepts. The virtual market provides information to users about customers, products and other companies I resources candidates to integrate the VE/OPIM system It allows remote utilization of services and interaction with existing networks I markets of information providers and users of information.

2. Enterprise organization re-engineering. The enterprise ability to transform itself to a competitive enterprise is the third important factor of entemrise competitiveness. Today this transformation is determined by the transition from an organizational framework, characterized by rigid production processes and management, to a service based organizational framework where prime resources are information and knowledge. This is easily understandable considering the recent advances on information and communication multimedia telematics technology which stand as the underlying technology for VE/OPIM systems design and operation. This implies virtual (informal or formal) models of any resource and process (except physical transformation of raw materials) in an enterprise. On the other side, the independent development of advanced information and communication multimedia telematics technology forces us towards the emerging service society, and consequently, to virtual enterpriseslone-product-integrated-manufacturing concepts.


3. Legal aspects are related to automated contracting, remote authorization of documents, and questions related to security and intellectual property.

ENTERPRISE

Process Computational

resou~

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INTERFACE ELECTRONIC

MARKET

Figure 3 Interfaces for integration of the environment and VE/OPIM system

3 VE/OPIM CONCEPTS: AN INSTITUTIONALIZATION FRAMEWORK

The framework for the institutionalization of the VE/OPIM concepts is derived from the functional and implementation analysis (Putnik G., Guimaraes P. F., Cunha M., Silva C. S., 1995). It has two global phases I projects with four subprojects, figure 4. The first phase comprehends the development of knowledge and technologies for VE/OPIM systems design and operation, including the development of telematics interfaces for resources integration and the development of a new organization framework for an enterprise as well as the enterprise re-engineering methodology. The second phase is the phase of developing the infrastructural environment for the VE/OPIM systems design and operation, that is, building a virtual market of independent primitive enterprises candidates for the VE/OPIM systems integration and an interface for customers. In short, the overall project is sketched as follows:

1 Project on VE/OPIM system design and operation 1.1 Sub-project on the development of industrial services based on te1ematics

applications (teleservices, telematics interfaces for CADICAMICAPPIPP(J; Sub-


project on the development of the specific knowledge on VE/OPIM system design (synthesis) and operation;

1.2 SUb-project on enterprise organization re-engineering - development of the new enterprise's organizational framework and the organization re-engineeringprocess plan;

2 Project on electronic I virtual market (networking of enterprises and customers); 2.1 Sub-project on the development of the virtual market deSign, organization and

operation; 2.2 Sub-project on the virtual market institution (including the legal aspects).

In this way the infrastructure and knowledge are developed for the VE/OPIM system synthesis.

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Figure 4 Procedure for the institutionalization of the VE/OPIM concepts.

4 CONCLUSION

The development of the VE/OPIM institutionalization framework is of the greatest importance. It represents a kind ofthe process plan for Virtual Enterprise/OPIM concepts implementation. It shows which operations/projects we need, which is their sequence (interdependencies) and which are their control (unctions (environments, preconditions) and mechanisms (tools).


The institutionalization framework is the structured representation of the processes and conditions for the enterprise's transition from the actual organization to an advanced competitive organization represented here by the VE/OPIM concept.

Thus, the correct and effective implementation and operation of the Virtual EnterpriselOPIM system in practice is determined by the accomplishment of all projects defined by the developed VE/OPIM institutionalization framework.

The corresponded project on the VE/OPIM concepts implementation is set up. The project structure corresponds to the VE/OPIM concepts institutionalization framework defined above. Each project/sub-project follows a five phase model:

• Identification of user needs,

• Translation of user needs into functional specifications,

• Building a demonstrator,

• Validation with users in a real-life situation,

• Exploitation plan. One of the major tasks will be also to raise users awareness of the viability and for the

implementation of the VElOPIM concepts. A prototype application, that is a demonstrator, will be set up in a laboratory for

Computer Integrated Manufacturing and Intelligent Systems which is being installed on two sites at the University of Minho; one in the city of Braga (site 1) and another in the city of Guimaraes (site 2) distancing approximately 20 km, figure 5.

University of Minho - InteUigent Manufacturing CeU and VEiOPIM System Project II PHASE

niversity of Minho -lnteUigent Manufacturing CeU

and VE/OPIM System Project Unit 3

I PHASE ......... n Unit 1 - site Braga Unit 2 - site GUimara~ ~I...-_~ __ ~~

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Figure 5 The structure of the pilot installation for the VElOPIM system development

Site 1, or Unit I, is intended to be representative of a completely autonomous integrated manufacturing system, capable of dealing with production processes having two machine-tools, one robot and the necessary computer system for manufacturing cell control and communication.

Site 2, or Unit 2, is intended to be capable of designing systems and providing knowledge and information in real-time and also to run other systems for implementing teleworking and teleservices for the VElOPIM system design and control.

400 Part Thirteen VirtuaUExtended Enterprises

Other units, Unit 3 to Unit n, are intended to integrate the network of units which are users or providers of teleworking and teleservices for industrial activities. These may include any kind of manufacturing, design, research, distribution, project management, and education units, etc. These units can be companies (SME, very small companies, larger companies, selfemployed persons), research institutions, universities, etc. These units represents the market of customers and enterprises-candidates for the VElOPIM concept/system design and operation.

The laboratory for ClM and Intelligent Systems serves also as the laboratory for all projects on production systems research at the University of Minho, Department jor Production and Systems -Center for Production Systems Engineering (Silva C. S., Putnik G. D., 1995).

5 REFERENCES

Putnik G. D., Silva C. S. (1995) One-Pro duct-Integrated-Manufacturing, in L. M CamarinhaMatos, H. Afsarmanesh (&is.) "Balanced Automation Systems - Architectures and design methods ", Proceedings ofBASYS '95, Chapman & Hall, pp 45-52.

Putnik G. D., Guimaraes P. F., Cunha M., Silva C. S. (1995) Telematics Applications for Competitive Enterprises, Researching Report UM-CESP-0695, University of Minho, Production Systems Engineering Center.

Silva C. S., Putnik G. D. (1995) Project on Intelligent Manufacturing Cell at University of Minho, Proceedings, 1st World Congress on Intelligent Manufacturing Processes and Systems, Mayagnez, Puerto Rico, pp 105-111.

SME (1993) The New Manufacturing Enterprise Wheel, Society for Manufacturing Engineers.

6 BIOGRAPHIES

Dr. Gorao D. Putnik received his MSc and PhD from Belgrade University, both in domain of Intelligent Manufacturing Systems. Dr. Putnik's current position is assistant professor in the Department of Production and Systems, University of Minho, Portugal, for subjects CAD/CAPP, Intelligent Manufacturing Systems and Design Theory. His interests are machine learning and manufacturing system design theory and implementations.

Dr. Paulo F. Guimaraes received his PhD from the University of South Carolina, USA, in the domain of Industrial Economics. He is currently an assistant professor at the Department of Economics of the University of Minho, Portugal His main interests are in information and market behavior, firm dynamics and demography, and the organization of industry.

Dr. Silvio do Carmo Silva received his MSc from University of Wales and PhD from Loughborough University of Technology, both in Great Britain, both in the domain of production systems management and design. Dr. Carmo Silva's current position is assistant professor in the Department of Production and Systems, University ofMinho, Portugal, for subjects Production Management and Computer Integrated Manufacturing Systems. His interests are manufacturing systems design and operation.

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