<i>E‐commerce enabled manufacturing operations: issues and analysis</i>

Dramatic economic and strategic changes brought about by recent advances in technology, including the internet, the World Wide Web (WWW), broadband, mobile and wireless technologies, have expanded the scope of commerce (Lancioni et al., 2003a). In manufacturing operations, the role of these various electronic commerce (e-commerce) technologies has been accelerating. Manufacturing operations cannot function without its integration to the larger business community and the relevant stakeholders. The extension and integration of such internally focused manufacturing systems as materials resource planning (MRP), enterprise resource planning (ERP), product and process design systems, product document and data management systems to go beyond the walls of the manufacturing plant, has progressed greatly in recent years because of these e-commerce technologies. It is no longer an issue of gaining competitive advantage in these areas, but it is now an issue of just maintaining a business presence. The continued evolution and maturation of e-commerce with manufacturing has occurred in industry, yet academics have been slow to investigate and help industry improve understanding and knowledge of this critical linkage. The concept of virtual and agile enterprises made clear the importance of the various e-commerce tools in managing these visions. Yet, the research in understanding and further advancing these areas has not flourished as much as in practice. Internet-based electronic marketplaces (EMs) are becoming more popular and important in global competition and economy. E-commerce can take place among businesses (B2B) or between businesses and consumers (B2C), but the internet also encompasses a wider spectrum of potential commercial activities and information exchanges and chances for an EM intermediary (Grieger, 2003). Three broad aspects of organizational relationships between trading partners have been identified including transactional, information-sharing, and collaborative relationships (AMR, 1998). These relationships suggest that transactional-oriented EMs are to a lesser degree relying on supply chain management (SCM) principals than collaborative-oriented EMs. During the year 2000, the total investment in business-to-business (B2B) infrastructure exceeded $200 billion – an estimated $10 billion of it for public consortia backed e-marketplaces alone (Lu & Antony, 2003). Even with the ‘burst’ of the technology bubble, there is still continued growth and interest in these technologies, they are not a fad and have become ingrained in organizational functions, policy, and practice. The leverage of power of the B2B marketplace in a supply chain depends upon sellers and buyers competitive advantage. The internet has helped to resolve these tradeoffs between buyers and sellers, and allowed the types of integration necessary between every partner in the supply chain. Web-based technologies are now indispensable for supply chain forecasting, planning, scheduling and execution. The greater the integrated information flow between customers and suppliers, the easier it becomes to balance supply and demand across the entire network (Lee et al., 1997; Froehlich & Westbrook, 2002). According to Lancioni et al. (2000), the internet has enabled companies to more quickly develop EDI information programmes with their customers, making real time management of inventories more practical and transparent to members of the supply chain. The internet facilitates the integration of business processes along the supply chain by facilitating the information flows necessary for coordinating business activities. The internet offers several cost reduction and service improvement opportunities to managers involved in manufacturing operations. These opportunities include the ability to integrate business processes electronically with other supply chain members, the ability to provide worldwide customer service, the ability to track systems status of third-party service providers and the ability to reduce service costs and response time (Lancioni et al., 2000; Garcia-Dastugue & Lambert, 2003). The integration of these systems to the shop floor is also critical, where rapid and flexible response to requirements throughout the supply chain is necessary. The internet is evolving as a powerful tool in the new marketplace where the profile of competition has changed from individual firms to efficient supply chain networks both between firms and within industries. The increased flexibility in managing supply chains that the internet provides has enabled logistics managers to introduce ‘customization’ and integrate customers into their supply chains. The trend will continue to motivate companies to look for additional strategic applications of the internet in their supply chain systems (Lancioni et al., 2003b). The internet is a primary conduit of trading along the supply chain. Trading partners of a supply chain fear insecure transactions, as Websites can be counterfeited, identities can be forged and the nature of transactions can be altered (Agarwal & Shankar, 2003). Lau & Lee (2000) discussed the concept of distributed object technology to facilitate efficient data exchange among various data objects which may reside in distributed platforms over geographically isolated regions, thereby leveraging the responsiveness of the supply chain network. For example, automobile makers are trying to execute the novel generic strategy of build-to-order (BTO), which requires not only just-in-time (JIT) practices, but the most advanced computerized versions of ERP (Murillo, 2001). With real-time communications between suppliers, production functions, marketing functions, and the final customer, e-commerce has become an inherent component of BTO. ERP organizes and the internet connects most day-to-day tasks of a business, such as entering orders, tracking product shipments, scheduling production, and updating sales forecasts and balance sheets (Boubekri, 2001). The management of materials, information, and other resources in organizations has expanded beyond the role of typical operations managers. Along with the breakdown of internal and external organizational boundaries has come the more open environment that may envelop organizational boundaries. Practitioners and managers throughout the world have realized the importance of these inter-organizational systems. Central to the development of these systems are concepts, technologies, and tools for electronic commerce. There are several researchers who report the implications of e-commerce enabling supply chain integration and management (Hax & Wilde, 2001; Rudberg et al., 2002; Cagliano et al., 2003). The paperless factory, lights-out manufacturing and other revolutionary ideas have been brought to further realization, and much of this progress may be attributed to e-commerce. In summary, e-commerce encourages and supports communication and cooperation among various functions, vendors, and customers of organizations. Evolving e-commerce paradigms and practices are expected to be central enablers to operations and manufacturing concepts such as concurrent engineering, design for ‘x’, SCM, computer integrated manufacturing, agile and virtual enterprising. Thus, its importance is strategically vital to organizations that wish to remain competitive. Practitioners have realized this importance by spending billions in e-commerce-enabled systems, practices, and supporting processes. Yet, researchers have been slow to critically investigate their roles, especially with respect to manufacturing organizations. Thus, we have decided to help expand the field of knowledge in this area by editing this special issue of the Information Systems Journal. Papers were sought for a special issue, E-commerce Enabled Manufacturing Operations: Issues and Analysis. Conceptual and strategic frameworks, empirical research, case studies, and analytical models focusing on development, design, management and control of e-commerce-enabled manufacturing and operations systems for improving organizational competitiveness were especially encouraged. The result was submissions from all over the world, many with solid contribution and understanding of issues. But only a few of these could be showcased here. We provide a summary of each and its contribution to the scope of the special issue on e-commerce enabled manufacturing operations. The first paper, A Conceptual Framework for Agent-based Agile Manufacturing Cells by Yu and Krishnan, deals with the architecture and cooperation mechanism of web-based agile manufacturing cells. An architecture has been developed using an analysis of structure and organizational requirements of agile manufacturing cells and a comparison of three basic architectures of manufacturing systems. Agent technology is introduced for the implementation of each functional layer to establish an agent-based model of agile manufacturing cells. They also present a real–time interaction mechanism of the agents by considering the activities during the agents’ cooperation in an agile manufacturing cell. This paper highlights the importance of real-time information systems for agile manufacturing cells. In order to be flexible and responsive to changing customer and market requirements, organizations should make decisions based on information as quickly as possible. The agent-based framework provides a reconfiguration capability that is needed to develop an agile manufacturing system in a short span of time. Tang, Yasa and Forrester in their paper, An Application of the Data Model and BPR in Transforming Electronic Business – The Case of a Food Ingredients Company in the UK, presents the results of an action research project. The Delta Model and Davenport's methodology of Business Process Reengineering were adopted to provide an awareness of IT capabilities in launching e-business for a brick-n-mortar company in the food processing industry (Hax & Wilde, 2001). The authors conduct a case study based on the Delta Model framework, a recent innovation. The thrust of the Delta Model is centered on e-commerce (and e-business). Considerable details from the company, Whetstone Food Ingredient were collected, analysed, and presented. The information technology/system forms the core of the data collection process and analysis for obtaining more accurate and useful information for decision-making in a global operations environment. This paper further justifies the role of e-commerce in manufacturing. Ibbott and O’Keefe in their paper, Trust Planning and Benefits in a Global Interorganizational System, describe an example of an interorganizational system (IOS) developed as part of a strong interfirm relationship. Using a model previously developed by Gallivan & Depledge (2003), the authors explore the roles and dynamics of trust, planning and benefits. They posit that a journey or improvisional approach to IOS development works where a relationship is strong and levels of inter-firm trust are high. They suggest that the nature of the inter-firm relationship is more important than the approach to IOS development. This paper deals with the importance of trust in a global inter-organizational system. This concept is especially important when developing an integrated supply chain using ERP systems. The paper, The ERP Challenge in China: A Resource Based Perspective by He, introduces a resource-based perspective (RBP) model on ERP challenges to help make ERP decisions in China. This research assesses major ERP challenges in China based upon a three-tier decision process in pursuit of a sustainable competitive advantage. The RBP model is then evaluated with data from survey-based empirical research to illustrate potential applications and managerial implications. They argue that within their environment, without ERP, it is almost impossible to achieve an integrated supply chain. This consequence is particularly problematic when companies look for global partnerships and strategic alliances. Thus, the results further highlight the significance of ERP in SCM. These experiences within Chinese industry on ERP challenges provide additional insights to the subject of e-commerce enabled operations management. The author shares the experience of various companies in China regarding the implementation issues of ERP. The final paper, Analysis, Design, and Development Model: A Case Study of an E-Commerce Production System by Gharamani, presents a case that describes an application of a normative Analysis, Design, and Development Model. This case outlines the architecture of an e-commerce production system. The system has a three-tier structure consisting of the client Interfaces, a Java Server Page, and Database Module. The model assists in designing economic production operations in an industrial setting by allowing a client to retrieve current production data needed for operations through the internet. The contribution to the scope of the special issue is through discussion of the development of an e-commerce-based foundation for a production system. Innovative system architecture has been introduced for an e-commerce supported production system. This special issue addresses some key issues in internet-enabled SCM. The emergence of e-commerce in manufacturing operations has significantly contributed to the success of achieving an integrated supply chain. The articles in the issue show the significant potential of the various technological, procedural and design practices of this linkage. They also identify the difficulties and hurdles to overcome in reaching an effective and efficient linkage. We believe that researchers, and practitioners, can benefit greatly from these select articles that help to bridge some gaps in this critical research area. The benefit of this special issue also arises from identifying additional opportunities for further investigation in this growing domain of inquiry. We were overwhelmed by the response to the ‘Call for Papers’ on E-commerce Enabled Manufacturing Operations: Issues and Analysis. We could not have done this by ourselves, thus we appreciate the efforts and the professionalism of all who were involved in making this special issue possible, including the authors, referees, and editorial staff of the Information Systems Journal. These efforts included review by at least three referees. The Guest Editors gratefully acknowledge the assistance provided by the Editor (Professor Guy Fitzgerald) of the Information Systems Journal and the more than 30 referees who reviewed manuscripts for this special issue. The editors of this special issue express their sympathy and condolence for the loss of Dr Nelson Tang, one of the co-authors of ‘An application of the Delta Model and BPR in transforming electronic business’, which appears in this issue. Dr Tang was an active researcher, teacher and a great friend. His contribution to the academic community will always be remembered.