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Virtual enterprise and its intelligence management
Computers & Industrial Engineering 42 (2002) 199±205
www.elsevier.com/locate/dsw
Virtual enterprise and its intelligence management Weixuan Xu*, Yiming Wei, Ying Fan Institute of Policy and Management, Chinese Academy of Sciences, P.O. Box 8712, Beijing 100080, People's Republic of China
Abstract Virtual enterprise (VE) will be the ef®cient organization form in the future owing to the rapid development of computer techniques and information technology. This paper exposes systematically the concept of VE and its structure. Methodology for intelligentized management is described. An integrated system based on client/server is proposed, which is useful for intelligent decision making in VE management. q 2002 Published by Elsevier Science Ltd. Keywords: Virtual enterprise; Intelligence management; Information technology
1. Introduction With the arrival of the 21st century, market competition is becoming global and intensive, and the business environment is changing quickly and greatly. Therefore, it is a pressing mission to master the demand information and to quickly make decisions in order to provide satisfactory production and service (Wang, 1998). It is a great challenge to the traditional management and administration, and calls for revolution. Modern technologies such as computer, information, network and communication technologies as well as arti®cial intelligence provide powerful support for the implementation of management stratagem of virtual enterprise (VE), which are applied to the enterprise business administration in some western countries (Bullinger, Ilg, & Zinser, 1997). However, there is much vagueness and difference on the de®nition of VE and its management philosophy (referred to as VE strategy) in existing references. By means of the concept of virtual reality (VR) and virtual manufacturing (VM), this paper attempts to clarify the connotation and characteristic of VE. Then the system structure of VE is discussed, and the basic idea on management of VE is proposed.
* Corresponding author. Tel.: 186-10-6254-2620; fax: 186-10-6254-2619. E-mail address: [email protected] (W. Xu). 0360-8352/02/$ - see front matter q 2002 Published by Elsevier Science Ltd. PII: S0 3 6 0 - 8 3 5 2 ( 0 2 ) 0 0 05 3 - 0
200
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
2. Principle of virtual enterprise Since the middle of the 1970s, a series of new ideas and concepts have emerged in succession, such as CIMS, concurrent engineering (Sohlenius, 1992), lean production and agile manufacturing (Luo, 1994; Wang, 1995). All of them are regarded as management philosophy and business administration modes for enterprise. It is believed that the concept of VM (Shukla & Vazquez, 1996) and VE (Byrne, 1993) based on VR and issued for manufacturing industry will become the ef®cient organization form in the future and show its high potential. 2.1. Virtual reality Virtual reality (Alluisi, 1990) is a computer system with which people can create and experience the virtual world (Wang & Gao, 1996). Virtual world is the entire virtual environment or the all given objective to be simulated. The virtual environment is created by means of computers. One uses it by watching, listening and touching to create the interactive view, simulating the reality environment. VR has three aspects of characteristics: immersion, interaction and imagination (I 3). VR has played a vital role in airplane and warship manufacturing, hence the concept of VM is generated. 2.2. Virtual manufacturing Virtual manufacturing is developed on the basis of some technologies such as computer simulation technology, CAx (CAD, CAM, CAPP) technology and VR. It may be regarded as the product of technology integration supported by VR. Following the de®nition of VM given by Yan (1995) and Wiens (1995), VM is the mapping for the real manufacturing upon the virtual environment. Its manufacturing process is realized through computers (NSFC, 1998) using virtual environment to simulate the whole process such that the feasibility of production can be evaluated and predicated. VM turns into a philosophy of management like the CIM. It is an important technology and basis for realizing the VE. 2.3. Virtual enterprise 2.3.1. Concept of VE Some scholars refer to VE as Virtual Corporation (Wang et al., 1997). It is an organization form for enterprise under VM environment. The real sense of VE is formed on the basis of VM. Fig. 1 shows the relationship among VR, VM and VE. Generally, VE is a cooperation partner among enterprises, which is based on VM. Those partners found in different places posses different scale and technologies. They can offer their core ability for the VE to improve the capability, with T, Q, C and S satis®ed. VE utilizes synthetically those available resources from partners to form a business entity by means of network communication technology. VR enlarges the working space to globalization and sets up a new type of enterprise through Internet, and the partners of VR are able to share the bene®t and responsibility as well as the risk. 2.3.2. VE strategy As other advanced manufacturing theories, VE can be taken as a management strategy/philosophy and we call it VE strategy. In substance, it makes use of resource not only from inside but also from outside
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
201
Fig. 1. The relationship among VR, VM and VE.
by buying, annexing, uniting, entrusting. With VE management strategies, the enterprise can perform many speci®c functions such as design, production, sale and service, and equipped ef®ciently with various resources to expedite its development and to strengthen its competitive capability. The use of VE strategy will change the organization structure materially and ®nancially through information exchanging. The enterprise may share information and technology with its partners. Therefore, VE strategy is a brand new way to realize business process re-engineering and cooperation. 3. Intelligence management for VE Management is a process to control and regulate man-resource, material-resource and ®nancial capacity through information. Management coexists with social; it will be improved along with the technology development. The change of organization form requires the corresponding management technology, thus it should seek a new management mode and technology to ®t the implementation of VE. 3.1. Intelligence management system for VE VE management simulates the whole process of designing to produce with the aim of global optimization. By evaluating and predicating the whole process before actual production, the manager is able to foresee what would happen in the future (Bing & Zhang, 1997). From this point of view, VE management is the mapping for real management under virtual environment. Fig. 2 shows its basic characteristics. ² Management technology is of intelligence. VE management expresses and treats the man-resource
202
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
Fig. 2. System body of VE management.
¯ow and material ¯ow as well as ®nancial-resource ¯ow in forms of information. To share the technologies, bene®ts and resources among partners, it needs the administration technology of virtual human±machine system to use global intelligence of management technology. ² Management environment is on the network. Implementation of VE management is on a network platform composed by enterprise LAN with Internet to manage the information among the VE partners. Therefore, the operation environment of VE management is setup based on client/server. ² Management information is to be integrated. Each partner of VE can share the information about product, technology, supply, sale, and service through the Internet web. The information created from VE management supports the distributed, different and open environment of VM in forms of data, knowledge and modes. It is obvious that the information of VE management is integrated greatly. 3.2. General scheme of integrated system for intelligent decision making of VE As mentioned above, VE management is a comprehensive intelligence management. There are many kinds of schemes for designing and implementing intelligence management systems. Tu (1995) discussed the schemes for common intelligence management system from the viewpoint of cybernetics. After investigating the general scheme, we proposed an integrated system on the basis of client/server, shown in Fig. 3, which is particularly useful for intelligent decision making in VE management. 3.3. Technologies of integrated system for intelligent decision making of VE management 3.3.1. Intelligent dynamic scheduling technique Intelligent controlling and scheduling in the production process are the key technologies ensuring
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
203
Fig. 3. General scheme of intelligent-integrated management system for VE.
enterprises operating in high ef®ciency and high reliability. Under the support of some advanced technologies (Hagel & Armstrong, 1997; Hye & Joel, 1999; Venkatraman, 1998) such as information technology, network technology, arti®cial intelligence and database technique, the dynamic changes in enterprise can be calculated and simulated in a short time. It provides the groundwork for dynamic scheduling. The methodology integrate simulation model and knowledge-based model integration can meet the demands of production control in enterprise. In this enabling technology, we should concentrate in investigating formulation of practical dynamic scheduling models which includes information, structure and operation models. 3.3.2. Intelligent strategy for global optimization For any speci®c optimization problem, whether it is solved successfully or not, the following two factors are important: one is the formulation of a rational optimization model; the other is the selection of a valid algorithm suitable for the formulated model. However, it is not easy for the whole system of enterprise to be optimized globally. It is very dif®cult not only to formulate the suitable model due to the complexity of enterprise system, but also to ®nd an ef®cient algorithm due to the high dimension of functions. To reach the global optimization ef®ciently, it is needed to investigate an intelligent strategy for global optimization of the enterprise. 3.3.3. Human±machine modeling method Intelligent systems for VE management is a human±machine system, which is made up of administrators, computers, communication equipments and various kinds of machines. Human±machine system regards human as its core and both human and machine work coordinately so that the intelligence of
204
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
human±machine can exceed the intelligence of human. It is a new concept about the arti®cial intelligence system. 3.3.4. Data standard and normal technology The essence of intelligent system of VE management is based on integration and network information exchange, which requires uni®ed rules for information exchange. Investigating data standard and normal technology will speed up the development of integration system. 4. Conclusion The rapid development of modern science and technology leads to the great change of business form and organization mode. The concept of VE is put forward and applied to enterprise management in some developed countries. Chinese scholars in the ®eld of management science have paid much attention to VE in the recent years. It is our belief that VE management and its strategy will show their potential in improving the enterprises' adaptability for outside environment in the light of management science and computer science as well as information technology. Acknowledgements The authors gratefully acknowledge the support of K.C. Wong and the NSFC (No. 79900002). References Alluisi, E. A. (1990). Network and virtualÐWorld technologies for training. 34th Annual Proceedings of the Human Factors Society (pp. 1405±1406). Santa Monica, CA: Human Factors Society Inc. Bing, B. S., & Zhang, P. Z. (1997). Virtual manufacturing and its system structure. Journal of Group Technology and Production Modernization, 64 (4), 24±27 in Chinese. Bullinger, H. -J., Ilg, R., & Zinser, S. (1997). Virtual enterpriseÐConcept, status quo and prospect. Journal of Industrial Engineering and Management, 2 (1), 6±10 in Chinese. Byrne, J. A. (1993). The virtual corporation. Business Week, 31 (6), 36±39. Hagel, J., & Armstrong, A. G. (1997). Expanding markets through virtual communities, Boston: Harvard Business School Press. Hye, P. K., & Joel, F. (1999). Virtual enterprise: Information system and networking solution. Computers and Industrial Engineering, 37 (1), 441±444. Luo, Z. B. (1994). Agile manufacturingÐThe strategy of mechanical industry in 21st century. Chinese Journal of Mechanical Engineering, 30 (4), 10±15 in Chinese. NSFC (1998). Basis of advanced manufacturing technology, Vol. 57. Beijing: High Education Press in Chinese. Shukla, C., & Vazquez, M. (1996). Virtual manufacturing: An overview. Computers and Industrial Engineering, 28 (2), 123± 136. Sohlenius, G. (1992). Concurrent engineering. Annals of CIRP, 10 (2), 645±655. Tu, X. Y. (1995). Intelligent management, Vol. 5. Beijing: Qinghua University Press in Chinese. Venkatraman, N. (1998). Real strategies for virtual organizing. Sloan Management Review, 41 (1), 33±48. Wang, Y. R. (1995). Production system in new centuryÐLean, agile, gentle production system. Chinese Journal of Mechanical Engineering, 31 (5), 5±7 in Chinese. Wang, Y. R. (1998). Times call for industrial engineering. Journal of Industrial Engineering, 1 (1), 1 in Chinese.
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
205
Wang, C. W., & Gao, W. (1996). Virtual reality theory and its application, Beijing: Tsinghua University Press pp. 17±33, in Chinese. Wang, H. D., et al. (1997). System structure of virtual corporation and its operation mode. Automation of Mechanical Industry, 19 (1), 6±8 in Chinese. Wiens, G. J. (1995). An overview of virtual manufacturing. Virtual ManufacturingÐProceedings of the Second Agile Manufacturing Conference (AMC'95). New Mexico, USA: ERI Press. Yan, Q. K. (1995). Virtual manufacturing system. Chinese Journal of Mechanical Engineering, 31 (4), 10±12 in Chinese.
www.elsevier.com/locate/dsw
Virtual enterprise and its intelligence management Weixuan Xu*, Yiming Wei, Ying Fan Institute of Policy and Management, Chinese Academy of Sciences, P.O. Box 8712, Beijing 100080, People's Republic of China
Abstract Virtual enterprise (VE) will be the ef®cient organization form in the future owing to the rapid development of computer techniques and information technology. This paper exposes systematically the concept of VE and its structure. Methodology for intelligentized management is described. An integrated system based on client/server is proposed, which is useful for intelligent decision making in VE management. q 2002 Published by Elsevier Science Ltd. Keywords: Virtual enterprise; Intelligence management; Information technology
1. Introduction With the arrival of the 21st century, market competition is becoming global and intensive, and the business environment is changing quickly and greatly. Therefore, it is a pressing mission to master the demand information and to quickly make decisions in order to provide satisfactory production and service (Wang, 1998). It is a great challenge to the traditional management and administration, and calls for revolution. Modern technologies such as computer, information, network and communication technologies as well as arti®cial intelligence provide powerful support for the implementation of management stratagem of virtual enterprise (VE), which are applied to the enterprise business administration in some western countries (Bullinger, Ilg, & Zinser, 1997). However, there is much vagueness and difference on the de®nition of VE and its management philosophy (referred to as VE strategy) in existing references. By means of the concept of virtual reality (VR) and virtual manufacturing (VM), this paper attempts to clarify the connotation and characteristic of VE. Then the system structure of VE is discussed, and the basic idea on management of VE is proposed.
* Corresponding author. Tel.: 186-10-6254-2620; fax: 186-10-6254-2619. E-mail address: [email protected] (W. Xu). 0360-8352/02/$ - see front matter q 2002 Published by Elsevier Science Ltd. PII: S0 3 6 0 - 8 3 5 2 ( 0 2 ) 0 0 05 3 - 0
200
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
2. Principle of virtual enterprise Since the middle of the 1970s, a series of new ideas and concepts have emerged in succession, such as CIMS, concurrent engineering (Sohlenius, 1992), lean production and agile manufacturing (Luo, 1994; Wang, 1995). All of them are regarded as management philosophy and business administration modes for enterprise. It is believed that the concept of VM (Shukla & Vazquez, 1996) and VE (Byrne, 1993) based on VR and issued for manufacturing industry will become the ef®cient organization form in the future and show its high potential. 2.1. Virtual reality Virtual reality (Alluisi, 1990) is a computer system with which people can create and experience the virtual world (Wang & Gao, 1996). Virtual world is the entire virtual environment or the all given objective to be simulated. The virtual environment is created by means of computers. One uses it by watching, listening and touching to create the interactive view, simulating the reality environment. VR has three aspects of characteristics: immersion, interaction and imagination (I 3). VR has played a vital role in airplane and warship manufacturing, hence the concept of VM is generated. 2.2. Virtual manufacturing Virtual manufacturing is developed on the basis of some technologies such as computer simulation technology, CAx (CAD, CAM, CAPP) technology and VR. It may be regarded as the product of technology integration supported by VR. Following the de®nition of VM given by Yan (1995) and Wiens (1995), VM is the mapping for the real manufacturing upon the virtual environment. Its manufacturing process is realized through computers (NSFC, 1998) using virtual environment to simulate the whole process such that the feasibility of production can be evaluated and predicated. VM turns into a philosophy of management like the CIM. It is an important technology and basis for realizing the VE. 2.3. Virtual enterprise 2.3.1. Concept of VE Some scholars refer to VE as Virtual Corporation (Wang et al., 1997). It is an organization form for enterprise under VM environment. The real sense of VE is formed on the basis of VM. Fig. 1 shows the relationship among VR, VM and VE. Generally, VE is a cooperation partner among enterprises, which is based on VM. Those partners found in different places posses different scale and technologies. They can offer their core ability for the VE to improve the capability, with T, Q, C and S satis®ed. VE utilizes synthetically those available resources from partners to form a business entity by means of network communication technology. VR enlarges the working space to globalization and sets up a new type of enterprise through Internet, and the partners of VR are able to share the bene®t and responsibility as well as the risk. 2.3.2. VE strategy As other advanced manufacturing theories, VE can be taken as a management strategy/philosophy and we call it VE strategy. In substance, it makes use of resource not only from inside but also from outside
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
201
Fig. 1. The relationship among VR, VM and VE.
by buying, annexing, uniting, entrusting. With VE management strategies, the enterprise can perform many speci®c functions such as design, production, sale and service, and equipped ef®ciently with various resources to expedite its development and to strengthen its competitive capability. The use of VE strategy will change the organization structure materially and ®nancially through information exchanging. The enterprise may share information and technology with its partners. Therefore, VE strategy is a brand new way to realize business process re-engineering and cooperation. 3. Intelligence management for VE Management is a process to control and regulate man-resource, material-resource and ®nancial capacity through information. Management coexists with social; it will be improved along with the technology development. The change of organization form requires the corresponding management technology, thus it should seek a new management mode and technology to ®t the implementation of VE. 3.1. Intelligence management system for VE VE management simulates the whole process of designing to produce with the aim of global optimization. By evaluating and predicating the whole process before actual production, the manager is able to foresee what would happen in the future (Bing & Zhang, 1997). From this point of view, VE management is the mapping for real management under virtual environment. Fig. 2 shows its basic characteristics. ² Management technology is of intelligence. VE management expresses and treats the man-resource
202
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
Fig. 2. System body of VE management.
¯ow and material ¯ow as well as ®nancial-resource ¯ow in forms of information. To share the technologies, bene®ts and resources among partners, it needs the administration technology of virtual human±machine system to use global intelligence of management technology. ² Management environment is on the network. Implementation of VE management is on a network platform composed by enterprise LAN with Internet to manage the information among the VE partners. Therefore, the operation environment of VE management is setup based on client/server. ² Management information is to be integrated. Each partner of VE can share the information about product, technology, supply, sale, and service through the Internet web. The information created from VE management supports the distributed, different and open environment of VM in forms of data, knowledge and modes. It is obvious that the information of VE management is integrated greatly. 3.2. General scheme of integrated system for intelligent decision making of VE As mentioned above, VE management is a comprehensive intelligence management. There are many kinds of schemes for designing and implementing intelligence management systems. Tu (1995) discussed the schemes for common intelligence management system from the viewpoint of cybernetics. After investigating the general scheme, we proposed an integrated system on the basis of client/server, shown in Fig. 3, which is particularly useful for intelligent decision making in VE management. 3.3. Technologies of integrated system for intelligent decision making of VE management 3.3.1. Intelligent dynamic scheduling technique Intelligent controlling and scheduling in the production process are the key technologies ensuring
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
203
Fig. 3. General scheme of intelligent-integrated management system for VE.
enterprises operating in high ef®ciency and high reliability. Under the support of some advanced technologies (Hagel & Armstrong, 1997; Hye & Joel, 1999; Venkatraman, 1998) such as information technology, network technology, arti®cial intelligence and database technique, the dynamic changes in enterprise can be calculated and simulated in a short time. It provides the groundwork for dynamic scheduling. The methodology integrate simulation model and knowledge-based model integration can meet the demands of production control in enterprise. In this enabling technology, we should concentrate in investigating formulation of practical dynamic scheduling models which includes information, structure and operation models. 3.3.2. Intelligent strategy for global optimization For any speci®c optimization problem, whether it is solved successfully or not, the following two factors are important: one is the formulation of a rational optimization model; the other is the selection of a valid algorithm suitable for the formulated model. However, it is not easy for the whole system of enterprise to be optimized globally. It is very dif®cult not only to formulate the suitable model due to the complexity of enterprise system, but also to ®nd an ef®cient algorithm due to the high dimension of functions. To reach the global optimization ef®ciently, it is needed to investigate an intelligent strategy for global optimization of the enterprise. 3.3.3. Human±machine modeling method Intelligent systems for VE management is a human±machine system, which is made up of administrators, computers, communication equipments and various kinds of machines. Human±machine system regards human as its core and both human and machine work coordinately so that the intelligence of
204
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
human±machine can exceed the intelligence of human. It is a new concept about the arti®cial intelligence system. 3.3.4. Data standard and normal technology The essence of intelligent system of VE management is based on integration and network information exchange, which requires uni®ed rules for information exchange. Investigating data standard and normal technology will speed up the development of integration system. 4. Conclusion The rapid development of modern science and technology leads to the great change of business form and organization mode. The concept of VE is put forward and applied to enterprise management in some developed countries. Chinese scholars in the ®eld of management science have paid much attention to VE in the recent years. It is our belief that VE management and its strategy will show their potential in improving the enterprises' adaptability for outside environment in the light of management science and computer science as well as information technology. Acknowledgements The authors gratefully acknowledge the support of K.C. Wong and the NSFC (No. 79900002). References Alluisi, E. A. (1990). Network and virtualÐWorld technologies for training. 34th Annual Proceedings of the Human Factors Society (pp. 1405±1406). Santa Monica, CA: Human Factors Society Inc. Bing, B. S., & Zhang, P. Z. (1997). Virtual manufacturing and its system structure. Journal of Group Technology and Production Modernization, 64 (4), 24±27 in Chinese. Bullinger, H. -J., Ilg, R., & Zinser, S. (1997). Virtual enterpriseÐConcept, status quo and prospect. Journal of Industrial Engineering and Management, 2 (1), 6±10 in Chinese. Byrne, J. A. (1993). The virtual corporation. Business Week, 31 (6), 36±39. Hagel, J., & Armstrong, A. G. (1997). Expanding markets through virtual communities, Boston: Harvard Business School Press. Hye, P. K., & Joel, F. (1999). Virtual enterprise: Information system and networking solution. Computers and Industrial Engineering, 37 (1), 441±444. Luo, Z. B. (1994). Agile manufacturingÐThe strategy of mechanical industry in 21st century. Chinese Journal of Mechanical Engineering, 30 (4), 10±15 in Chinese. NSFC (1998). Basis of advanced manufacturing technology, Vol. 57. Beijing: High Education Press in Chinese. Shukla, C., & Vazquez, M. (1996). Virtual manufacturing: An overview. Computers and Industrial Engineering, 28 (2), 123± 136. Sohlenius, G. (1992). Concurrent engineering. Annals of CIRP, 10 (2), 645±655. Tu, X. Y. (1995). Intelligent management, Vol. 5. Beijing: Qinghua University Press in Chinese. Venkatraman, N. (1998). Real strategies for virtual organizing. Sloan Management Review, 41 (1), 33±48. Wang, Y. R. (1995). Production system in new centuryÐLean, agile, gentle production system. Chinese Journal of Mechanical Engineering, 31 (5), 5±7 in Chinese. Wang, Y. R. (1998). Times call for industrial engineering. Journal of Industrial Engineering, 1 (1), 1 in Chinese.
W. Xu et al. / Computers & Industrial Engineering 42 (2002) 199±205
205
Wang, C. W., & Gao, W. (1996). Virtual reality theory and its application, Beijing: Tsinghua University Press pp. 17±33, in Chinese. Wang, H. D., et al. (1997). System structure of virtual corporation and its operation mode. Automation of Mechanical Industry, 19 (1), 6±8 in Chinese. Wiens, G. J. (1995). An overview of virtual manufacturing. Virtual ManufacturingÐProceedings of the Second Agile Manufacturing Conference (AMC'95). New Mexico, USA: ERI Press. Yan, Q. K. (1995). Virtual manufacturing system. Chinese Journal of Mechanical Engineering, 31 (4), 10±12 in Chinese.