Extended Enterprise Partnerships.

World wide advances in manufacturing, physical distribution, retailing and
information and communication technologies have created important
opportunities for advances in management of the extended supply chain. The
extended logistics network (ELN) includes retailing, physical distribution,
manufacturing and the supply of raw materials and packaging.
These technical advances, combined with world wide inflationary trends
have shifted the emphasis in management thinking towards economy of
capital related costs. Excess production capacity, under utilised facilities in
physical distribution, high stock levels and high levels of work in progress
and large amounts of outstanding debt from customers are all increasingly
unwelcome. Supply chain operators must work within increasingly tight
constraints on capacity and resource availability and respond more quickly to
events as they take place in the market.
Modern industrial supply chains operate as multipartner networks (extended
logistics networks) of retailers, manufacturing distributors and supplier
enterprises. Such chains now have to respond to the conflicting demands of
improved customer service, just-in-time delivery, reduced inventory and
working capital, elimination of spare capacity and faster response to market.
ESPRIT Project 6599, EAGLE aims to provide the basis for a new generation
of decision-support systems that improve service levels, response times and
profitability by ensuring the delivery of cost-effective quantities of all
products needed at the right time and place throughout the manufacturing
logistics network. EAGLE will develop a general dynamic model of the
extended logistics network encompassing multiple-site suppliers, multiple-
site manufacturers, warehousing, distribution and multiple sales outlets. This
will be followed by the development of a model-based decisionsupport
system to provide management advice at all levels. The decision-support
system will address dynamic scheduling of the extended logistics network
and sales forecasting and stock control. The development will be supported
by analysis and evaluation of human factors contributing to the effectiveness
of logistics decision-support systems.
The EAGLE Project is user driven and involves a world class supply chain
partnership involving Unilever and Tesco Stores. These partners have
leading edge technologies with which, following the principles of non
invasive systems integration, the EAGLE Demonstrator must be compatible.
These companies have collaborated for several years in the management of
their supply chain and will provide the project with a complete EAGLE
supply chain demonstrator. This chain includes suppliers, manufacturers,
warehouses, transportation and retailer outlets. The Unilever/Tesco food
chain is typical of the process industries and the Fast Moving Consumer
Goods (FMCG) environment. Results from this project should be
generalisable for mu1 ti-partner global supply chain management of every
type of commodity.
HUSAT's role within EAGLE is to address one aspect of supply chain
management which has come to the forefront in recent years, namely
Partnership Sourcing. It has now become widely accepted that the traditional
approach to customer-supplier relations was inherently weak owing to its
essentially adversarial nature. This was a wasteful and ineffective way of
doing business. The modern trend is towards the achievement of
collaborative relationships which bring mutual benefit and effective supply.
Success in all types of business today is to do with utilising your resources to
the full, competing well and winning. Partnership Sourcing is a way of
achieving this and is defined as follows:
"Partnership sourcing is a commitment by customers and suppliers,
regardless of size, to a long-term relationship based on clear, mutually
agreed objectives to strive for world-class capability and
competitiveness." (from Partnership Sourcing Ltd.)
A 'partnering' style of relationship between customer and supplier is
characterised but a number of essential features including: top level
commitment to long term relations; openness and trust; clear joint objectives;
and a proactive approach to problem solving.
The main objectives of this part of EAGLE will be, first, to identify the key
aspects of customer-supplier inter-enterprise relations which include
investigating operational decision structures, information requirements and
information flows within the organisation; secondly, to identify those areas of
customer-supplier relations which have a high risk of failure or which can
lead to a breakdown in the partnership; thirdly, to determine strategies for
effecting improved customer-supplier relations; and finally, to identify,
research and evaluate available methods for the improvement of customer-
supplier relations.
The paper will address these and other issues related to Project EAGLE.
0 1994The Institution of Electrical Engineers.
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