Improved production network logistics due to operation and process transparency via mobile devices

In the European textile sector small and micro companies faced massive changes both in retail and manufacturing due to saturated markets and their weak integration with partners. However, winners in the market have abandoned the traditional retail model for the so called vertical integrated approach. Their success is (amongst others) based on end-to-end transparency and decentralized decision making along the product value and supply chain.

ComVantage demonstrates this approach based on Linked Data-driven data interoperability and harmonization mechanisms (see result #1 as well) to facilitate secure information sharing across organizations (refer additionally to result #5). Furthermore, mobile applications are in the focus to provide a simple and intuitive access to the collaboration space.

Within the network, designer, producers, and consumers communicate, collaborate and exchange relevant information in order to control a common and highly agile product value chain without high transaction costs.

Each partner of the production network has access to all data of a placed order that is relevant for his production step. The sewing facility for instance has access to the cutting pattern offered by the designer and the selected fabric from the web shop. The sewer himself updates the production progress once he finished his job to provide transparency to all other stakeholders including the consumer. In order to accelerate the decentralized production, goods and materials are shipped directly between the stakeholders and finally to the consumer. The relevant address information is securely disclosed to the executing partner. Moreover, a common stock management among all network partners can be organized to balance material supply evenly and in accordance to scheduled orders. Finally, emergency handling (e.g. finding replacements for missing material) can be managed among all network partners.

According to our business simulations, external (e.g. consumer or production partner) and internal collaborative capabilities are improved by utilizing the ComVantage framework which have an positive effect on all six dimensions of business process performance: efficiency, flexibility, quality, innovation, cost, and sustainability. These, in turn, affect all three dimensions of the competitive advantage (differentiation, cost leadership, and financial performance). With respect to the use case of consumer-oriented production and late customization the findings demonstrate the inherent trade-off between the process performance dimensions, and show that the added collaborative capabilities improve system capability for effectively handling different demand volumes – a key benefit for offering personalized products.

Along the use case in the textile industry we demonstrate our vision of how micro companies can compete in a global market by transforming from isolated individual companies towards an integrated, agile virtual enterprise. ComVantage enables small and micro companies to join virtual enterprises on low investments but high strategic benefits. Micro companies who are suffering losses because of the global competition can benefit from the realization of the open virtual enterprise vision. This allows for example a designer, or a small tailor shop to apply for open production orders. Transferring the success factors of vertical integrated companies to a virtual enterprise consisting of a network of micro companies awakes further chance potential for European micro companies both manufacturers and retailers.

Virtual enterprise: A virtual enterprise is based on a temporary alliance of several businesses and takes advantage of a market opportunity. It does not have own resources but consists of the resources of the individual partners.

Specific relevance of SMEs: Regarding the Small Business Act for Europe, small and micro companies are important actors in all business fields across Europe with growing tendency. Small and medium-sized businesses (SME’s) with headcounts up to 250 employees cover 37 per cent of added-value to the business economy. Micro companies with headcounts less than 10 employees cover 21 per cent of added value to the business economy. From a quantitative perspective, micro, small and medium enterprises represent 99.8 per cent of all firms all over Europe.