Publication Details

Dunn, LJ & Gibson, PR, Strategic design of service orientated web-based supply chain infrastructure, Asia Pacific Industrial Engineering and Management Systems and Chinese Institute of Industrial Engineers Conference, 2006, p 2385-2394, Thailand: APIEMS 2006.


The traditional 'make and sell' attitude of industrial manufacturing organisations has now almost entirely given way to customer orientated 'sense and respond' service philosophies to the extent where this has become a major competitive key success factor in a global manufacturing industry. In order to become service orientated, manufacturing industry is increasingly dependent on efficient and effective supply relationships. This trend is compounded by needs for waste avoidance, minimal inventory, cost efficiency and appropriate service to the customer. This paper considers the strategic opportunities for large engineering project firms that have identified a need to establish advantages over their competitors by designing and implementing novel service orientated supply chain strategies, using internet technology. Rather than relying on functional hierarchy and command and control governance where a chain of commitments are poorly connected and difficult to reconfigure, this paper proposes more flexible strategic process designs around a 'state of the art' service based architecture. Complexity reduction is traditionally a philosophy widely used by industrial engineers that thus far has been also applied in attempts to enable efficient supply chain relationships between different manufacturing supply partners. However, in this work, those traditional industrial engineering ideas are challenged. When a supply chain is simplified, it is inevitable that it will not offer optimum performance, especially in terms of customer service because the complex nature of customer requirements is not reflected in its entirety. The architecture developed by the authors and demonstrated here explores ideas of complexity absorption. The architecture is built on the premise that necessary complexity absorption creates an organisation that is strategically superior because it becomes a complex adaptive system that is unique to a group of organisations that constitute a supply chain or supply network. A case study will be presented based on a major industrial gas pipeline procuring organisation that illustrates an application consisting of Manufacturing Portal and Service Orientated Architecture. This model is internet-based, has three main constituents of Web Services, Portal and Client Services and is described in detail in this paper. The authors conclude by discussing the unique competitive advantages that are achievable by designing unique, responsive and adaptive supply chain architecture in this way.

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