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Contents lists available at ScienceDirect

Computers & Industrial Engineering

journal homepage: www.elsevier .com/ locate/caie

Collaborative networked organizations – Concepts and practicein manufacturing enterprises

Luis M. Camarinha-Matos a,*, Hamideh Afsarmanesh b, Nathalie Galeano c, Arturo Molina c

a New University of Lisbon, Quinta da Torre, 2829-516 Monte Caparica, Portugalb University of Amsterdam, The Netherlandsc Tecnologico de Monterrey, Monterrey, Mexico

a r t i c l e i n f o a b s t r a c t

Available online xxxx

Keywords:Collaborative networked organizationsManufacturing enterprisesVirtual organizationsVirtual enterprisesClassification of collaborative networks

0360-8352/$ - see front matter � 2008 Elsevier Ltd. Adoi:10.1016/j.cie.2008.11.024

* Corresponding author. Tel.: +351 212948517; faxE-mail address: cam@uninova.pt (L.M. Camarinha-

Please cite this article in press as: Camarinputers & Industrial Engineering (2009), doi

Participation in networks has nowadays become very important for any organization that strives toachieve a differentiated competitive advantage, especially if the company is small or medium sized.Collaboration is a key issue to rapidly answer market demands in a manufacturing company, throughsharing competencies and resources. The collaborative networked organizations (CNO) area focuses onthis type of organizational models that use ICT for supporting the development of collaborative businessopportunities. This paper describes the key concepts related to CNOs, provides a high level classificationof collaborative networks, and presents some application cases in the manufacturing industry. Finally aholistic research initiative addressing key challenges in the area is presented and a discussion of the CNOparadigm contribution to the challenges faced by manufacturing systems is made.

� 2008 Elsevier Ltd. All rights reserved.

1. Introduction

A new competitive environment for manufacturing and serviceindustries has been developing during the last years, which isforcing a change in the way manufacturing enterprises are man-aged. To be successful in a turbulent and very competitive climate,manufacturing enterprises of 2020 will require significantlyimproved competencies in terms of new business models, businessstrategies, governance principles, processes and technologicalcapabilities. The definition and development of these competencies(Ermilova & Afsarmanesh, 2006; Harzallah & Vernadat, 2002)represents a challenge for manufacturing companies.

Manufacturing enterprises capable of responding rapidly tochanging/uncertain demands, demand for customized products,and fierce international competition, have competitive advantagesin the new global economy. Operating new competitive firms isbecoming more difficult as product variety increases, product’scomplexity and quality demands augment, product’s life cyclesreduce, and revenue margins decrease. The very notion of producthas changed, giving pace to the notion of extended product underwhich, besides the physical product itself, associated services andknowledge become very important. In addition, the capital costsof manufacturing technologies are extremely high. These factorsimpose high productivity levels for labor and manufacturing facil-ities, a high level of agility, and the use of new strategies to expand

ll rights reserved.

: +351 212941253.Matos).

ha-Matos, L. M., et al. Colla:10.1016/j.cie.2008.11.024

the production capabilities beyond the enterprise borders throughthe use of new collaboration models.

Six grand challenges for manufacturers, representing gaps inexisting practices, were identified some years ago in an exerciseto establish a vision for manufacturing in 2020 (National ResearchCouncil, 1998) which are still relevant and important:

1. Achieve concurrency in (all) operations.2. Integrate human and technical resources to enhance workforce

performance and satisfaction.3. ‘‘Instantaneously” transform information gathered from a vast

array of diverse sources into useful knowledge for making effec-tive decisions.

4. Reduce production waste and product environmental impact to‘‘near zero”.

5. Reconfigure manufacturing enterprises rapidly in response tochanging needs and opportunities.

6. Develop innovative manufacturing processes and products witha focus on decreasing dimensional scale.

These challenges require new organizational structures, newbusiness models, theories, processes, and technologies that allowcompanies to face dynamic changes in all their operations. Smalland medium size enterprises (SMEs), which typically have limitedskills and resources, need to join efforts with others in order toovercome their limitations through collaboration. On the otherhand, the capability to form temporary and goal-driven associa-tions brings the potential of dynamically adjusting to the needs.

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In this context, dynamic inter-organizational models, distributedbusiness process management, integration, and coordination stillremain as challenging issues due to their knowledge intensivenature, including hard problems such as dealing with semanticunification, and the need for sound negotiation mechanisms be-tween each company and its business partners. Recent advancesin the information and communication technologies (ICT) thatsupport the concept of collaborative networks have allowedmanufacturing enterprises to move from highly data-drivenenvironments to more cooperative information/knowledge-drivenenvironments. Enterprise knowledge sharing (know-how), adop-tion of common best practices, and open source/web-based appli-cations are enablers to achieve both the concept of integratedenterprise and the implementation of collaborative networkedenterprises for manufacturing industry. In this paper the conceptof collaborative networked organizations is addressed, character-izing its life cycle and key characteristics. Several case studies areanalyzed in order to discuss how these new kinds of organiza-tions face the identified challenges for the next generationmanufacturing systems.

2. Key concepts of collaborative networked organizations

2.1. Examples of manifestations

In today’s industry, collaborative networks manifest in a largevariety of forms. Moving from the classical supply chains format,characterized by relatively stable networks with well defined rolesand requiring only minimal coordination and information ex-change, more dynamic structures are emerging in industry. Someof these organizational forms are goal-oriented, i.e. focused on asingle project or business opportunity, such as the case of virtualenterprises (VE) (Camarinha-Matos, Afsarmanesh, & Ollus, 2005).The same concept can be applied to other contexts, e.g. govern-ment and service sectors, leading to a more general term, thevirtual organizations (VO). A VE/VO is often a temporary organiza-tion that ‘‘gathers” its potential from the possibility of (rapidly)forming consortia well suited (in terms of competencies andresources) to each business opportunity. Other emerging collabo-rative networks are formed by human professionals that may col-laborate in virtual communities and form virtual teams to addressspecific problems, such as collaborative concurrent engineering ordevelopment of a consultancy project.

Another case of collaborative network is the collaborative vir-tual laboratory (VL) (Garita, Afsarmanesh, Unal, & Hertzberger,2003). Here a virtual experimental environment is provided for sci-entists and engineers to perform their experiments, enabling agroup of researchers located in different geographical regions towork together, sharing resources (such as expensive lab equip-ments) and results. In this case, in addition to the network of in-volved organizations (e.g. research centers or research units ofenterprises), there is an overlapping network of people. In a re-search activity most collaboration acts are in fact conducted byresearchers that have a high degree of autonomy. Therefore, in thisexample, it becomes evident the necessity of tools to support hu-man collaboration – advanced groupware tools. A typical VL in-volves scientific equipments connected to a network, large-scalesimulations, visualization, data reduction and data summarizationcapabilities, application-specific databases, collaboration tools, e.g.teleconferencing, federated data exchange, chat, shared electronic-whiteboard, notepad, etc., application-dependent software toolsand interfaces, safe communications, and large network band-width. A similar situation can happen in a virtual enterprise whenengineering teams formed by engineers of different enterprises(virtual teams) collaborate on some engineering problem.

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Many more examples can be found in different sectors. Forinstance, we can think of networks of insurance companies, net-works of governmental institutions, networks of academic institu-tions forming virtual institutes for joint delivery of advancedcourses, networks of entities involved in disaster rescuing, net-works of care centers, healthcare institutions, and family relativesinvolved in elderly care, etc. With the development of new collab-orative tools supported by Internet and a better understanding ofthe mechanisms of collaborative networks, new organizationalforms are naturally emerging. And yet all these cases have a num-ber of characteristics in common (Camarinha-Matos & Afsarm-anesh, 2006a):

� Networks composed of a variety of entities – organizationsand people – which are largely autonomous, geographicallydistributed, and heterogeneous in terms of their operatingenvironment, culture, social capital and goals.

� Participants collaborate to (better) achieve common or com-patible goals.

� The interactions among participants are supported by com-puter networks.

Therefore, the term collaborative network, or more specificallycollaborative networked organization (CNO) when we think ofmore organized collaboration processes, is often used as a genericterm to represent all these particular cases.

2.2. Collaboration and related concepts

Although there is a general intuitive notion of what collabora-tion is about, this concept is often confused with cooperation. Formany people the two terms are indistinguishable and yet it isimportant to understand what is involved at the different levelsof interaction among organizations in order to better support andmanage them. The ambiguities reach a higher level when other re-lated terms are considered such as networking, communication,and coordination (Denise, 1999; Himmelman, 2001). Althougheach one of these concepts is an important component of collabo-ration, they are not of equal value and neither one is equivalent toanother. In an attempt to clarify various concepts, the followingworking definitions are proposed (Camarinha-Matos & Afsarm-anesh, 2006a):

� Networking – involves basically communication and informa-tion exchange for mutual benefit. A simple example of network-ing is the case in which a group of entities share informationabout their experience with the use of a specific tool. They canall benefit from the information made available/shared, butthere is not necessarily any common goal or structure influenc-ing the form and timing of individual contributions, and there-fore there is no common generation of value. Although there isvalue in networking, its creation is not explicitly put as a com-mon goal. Nevertheless other authors might use a more compre-hensive notion of networking.

� Coordinated networking – in addition to communication andinformation exchange, it involves aligning/altering activities sothat more efficient results are achieved. Coordination, that isthe act of working harmoniously in a concerted way, is one ofthe basic building blocks of collaboration. An example of coordi-nated activities happens when it is beneficial that a number ofautonomous entities share some information and adjust thetiming of, for example, their lobbying activities for a new sub-ject, in order to maximize their impact. Nevertheless each entitymight have a different goal and use its own resources and meth-ods of impact creation; values are mostly created at individuallevel.

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� Cooperation – involves not only communication, informationexchange, and adjustments of activities, but also resources shar-

ing for achieving compatible goals. Cooperation is achieved bydivision of some labor (not extensive) among participants. Inthis case the aggregated value is the result of the addition ofindividual ‘‘components” of value generated by the various par-ticipants in a quasi-independent manner. A traditional supplychain based on client-supplier relationships and pre-definedroles in the value chain, is an example of a cooperative processamong its constituents. Each participant performs its part ofthe job, in a quasi-independent manner (although coordinatedwith others). There exists however, a common plan, which inmost cases is not defined jointly but rather designed by a singleentity, and that requires some low-level of co-working, at leastat the points in time when one partner’s results are deliveredto the next partner. And yet their goals are compatible in thesense that their results can be added or composed in a valuechain leading to the end-product or service.

� Collaboration – is a more demanding process in which entitiesshare information, resources and responsibilities to jointly plan,implement, and evaluate a program of activities to achieve acommon goal and therefore jointly generating value. This con-cept is derived from the Latin collaborare meaning ‘‘to worktogether” and can be seen as a process of shared creation; thusa process through which a group of entities enhance the capabil-ities of each other. It implies sharing risks, resources, responsi-bilities, losses and rewards, which if desired by the group canalso give to an outside observer the image of a joint identity.Collaboration involves mutual engagement of participants tosolve a problem together, which implies mutual trust and thustakes time, effort, and dedication. The individual contributionsto the value creation are much more difficult to determine here.A collaboration process happens for instance in concurrent engi-neering, when a team of experts jointly develop a new product.From this example it can be noticed that although some coordi-nation is needed, collaboration, due to its joint creation facet,might also involve seeking divergent insights and spontaneity,and not simply a structured harmony.

Each of the above concepts constitutes a ‘‘building block” for thenext definition. Coordination extends networking; cooperation ex-

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Communication & Information

exchange

Communication & Information

exchange

Complementarity of goals

(aligning activitiesfor mutual benefit)

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exchange

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exchange

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Fig. 1. Interaction maturity levels (Cama

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tends coordination; and collaboration extends cooperation (Fig. 1).Hence, according to this perspective, collaboration contains every-thing that the other concepts have. As we move along from net-working to collaboration, we increase the amounts of commongoal-oriented risk taking, commitment, and resources that partici-pants must invest into the joint endeavor. In the rest of this paperwe focus on collaborative networks which subsume all otherforms.

To better understand collaboration it is also useful to put it incontrast with competition. Competition has been seen as one ofthe most successful basic mechanisms in the struggle for survival,namely in case of scarce resources. It is interesting to note thateven Economics is defined as the study of ‘‘the efficient allocationof scarce resources among competing uses”, and Politics is under-stood as ‘‘the relations between special interest groups competingfor limited resources” (Kangas, 2005).

In fact, the formation of cooperation and collaboration allianceshas emerged to allow more efficient competition against otherentities or groups. This is typically what leads SMEs to join effortsin order to survive in turbulent markets. Also in Nature we findnatural alliances that compete with others for survival – thespecies (Kangas, 2005). The stronger the threat is the higher isthe internal cohesion and sense of group identity.

But even inside a friendly group we often find the interplay be-tween collaboration and competition. Internal competition hap-pens as the means to gain more power, status, or materialresources. On the other hand, if we consider the creative facet ofcollaboration – creating together – we can also find the interplayamong the two concepts. In fact innovation very often results fromhealthy confrontation of different ideas and perspectives. A fruitfulcollaboration space shall allow for some degree of divergence.Often enough creativity is resulted from challenges to the currentdirections, norms, or assumptions. It is however fundamental thatsuch divergences do not undermine the basic foundations of thegroup cohesiveness, such as trust, fairness, and sharing.

Finding the right balance between collaboration and internalcompetition in order to not only efficiently react to external threatsor opportunities but also to excel individual capabilities and breedinnovation is a major challenge for the definition of the governancepolicies, working/sharing principles, and supporting tools andinfrastructures for collaborative networks.

Compatibility of goalsIndividual identities

Working apart(with some

coordination)

Compatibility of goalsIndividual identities

Working apart

Joint goalsJoint identities

Working together(Creating togethger)Joint responsibility

Integration level

rinha-Matos & Afsarmanesh, 2008).

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Virtual Organization (VO)

Virtual Enterprise (VE)

Extended Enterprise

(EE)

Virtual Team(VT)

Organizations People

Ente

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Fig. 3. Single-opportunity CN.

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2.3. Classes of collaborative networks

Given the large diversity of manifestations of collaborativenetworks in different application domains, often using differentterminologies, it is important to elaborate taxonomy of the variousorganizational forms and provide a (informal) definition ordescription of the terms used. The following categories andcorresponding descriptions result from many discussions andinteractions with a large community of researchers in variousinternational projects (Camarinha-Matos & Afsarmanesh, 2005,2006a, 2008).

� Category 1: A collaborative network (CN) is a network consist-ing of a variety of entities (e.g. organizations and people) thatare largely autonomous, geographically distributed, and hetero-geneous in terms of their operating environment, culture, socialcapital and goals, but that collaborate to better achieve commonor compatible goals, thus jointly generating value, and whoseinteractions are supported by computer network.

Although not all, most forms of collaborative networks implysome kind of organization over the activities of their constituents,identifying roles for the participants, and some governance rules.Therefore, these can be called manifestations of collaborative net-worked organizations (CNOs) (Fig. 2). Other more spontaneousforms of collaboration in networks can also be foreseen. For in-stance, various ad-hoc collaboration processes can take place invirtual communities, namely those that are not business-oriented– e.g. individual citizens contributions in case of a natural disaster,or simple gathering of individuals for a social cause. These arecases where people or organizations may volunteer to collaboratehoping to improve a general aim, with no pre-plan and/or structureon participants’ roles and how their activities should proceed.

Among the CNOs, some networks are goal-oriented in which in-tense collaboration (towards a common goal) is practiced amongtheir partners, as opposed to longer term strategic alliances de-scribed below, where in fact not collaboration but cooperation ispracticed among their members.

Goal-oriented networks can themselves be either driven by con-tinuous production/service provision activities, or driven by theaim of grasping a single (collaboration) opportunity, as described

Co

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Fig. 2. Examples of colla

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below. In goal-oriented networks, the first case of CNOs labeledas Continuous-production driven in Fig. 2, includes those networksthat have a long-term duration and remain relatively stable duringthat duration, with a clear definition of members’ roles along thevalue chain. Typical examples include:

� Category 2: Supply chains – a stable long-term network of enter-prises each having clear roles in the manufacturing value chain,covering all steps from initial product design and the procure-ment of raw materials, through production, shipping, distribu-tion, and warehousing until a finished product is delivered to acustomer. The level of stability of these organizations is beingchallenged, leading to dynamic supply chains where, forinstance, the participants can change more often.

� Category 3: Virtual government or collaborative e-government –an alliance of governmental organizations (e.g. city hall, taxoffice, cadastre office, and civil infrastructures office) thatcombine their services through the use of computer networksto provide integrated services to the citizen through a commonfront-end.

The second case of CNOs within the goal-oriented networks arelabeled as grasping-opportunity driven CNOs in Fig. 3, and aredynamically formed to answer a specific collaboration opportunityand will dissolve once their mission is accomplished. Examples inFigs. 2 and 3 include (Camarinha-Matos & Afsarmanesh, 2006a,2008):

llaborativeNetwork

Ad-hocCollaboration

Goal-oriented network

Continuousproductiondriven net

Grasping opportunitydriven net

alm

Extendedenterprise

Virtualorganization

Dynamic VO

Virtualenterprise

Dynamic supply chain

Virtualgovernment

borative networks.

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� Category 4: Virtual enterprise (VE) – represents a temporaryalliance of enterprises that come together to share skills or corecompetencies and resources in order to better respond to busi-ness opportunities, and whose cooperation is supported bycomputer networks.

� Category 5: Virtual Organization (VO) – represents a conceptsimilar to a virtual enterprise, comprising a set of (legally) inde-pendent organizations that share resources and skills to achieveits mission/goal, but that is not limited to an alliance of for profitenterprises. A virtual enterprise is therefore, a particular case ofvirtual organization.

� Category 5.1: Dynamic Virtual Organization – typically refers toa VO that is established in a short time to respond to a compet-itive market opportunity, and has a short life cycle, dissolvingwhen the short-term purpose of the VO is accomplished

� Category 6: Extended Enterprise (EE) – represents a concept typ-ically applied to an organization in which a dominant enterprise‘‘extends” its boundaries to all or some of its suppliers. Anextended enterprise can be seen as a particular case of a virtualenterprise.

� Category 7: Virtual team (VT) – is similar to a VE but formed byhumans, not organizations. A virtual team is a temporary groupof professionals that work together towards a common goal suchas realizing a consultancy job, a joint project, etc., and that usecomputer networks as their main interaction environment.

The term ‘‘virtual” in the above organizations comes from thefact that these networks act or appear to act as a single entity,thanks to their organized communication and coordination mech-anisms enabled by computer networks, although they are (usually)not a single legal entity, they may not have a physical headquarter,and are typically geographically distributed.

Besides the Goal-oriented networks, another class of CNOs isthe long-term strategic alliances (see Fig. 4) aimed at offering theconditions and environment to support rapid and fluid configura-tion of collaborative networks, when opportunities arise. VO breed-ing environments (Afsarmanesh & Camarinha-Matos, 2005;Camarinha-Matos & Afsarmanesh, 2006a), and professional virtualcommunities exemplify this kind of networks.

� Category 8: VO Breeding environment (VBE) – represents anassociation of organizations and their related supporting institu-tions, adhering to a base long-term cooperation agreement, andadoption of common operating principles and infrastructures,with the main goal of increasing their preparedness towardsrapid configuration of temporary alliances for collaboration inpotential virtual organizations. Namely, when a business oppor-tunity is identified by one member (acting as a broker), a subsetof VBE organizations can be selected to form a VE/VO.

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a

Regional GlobalFor-profit

Non-profit

VBE

Virtual lab

networks

Disaster rescue

networks

Industry cluster

Industry district

Business ecosystem

Fig. 4. Long-term strategic alliances.

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Earlier cases of VBEs were mostly operating on a regional basis,e.g. industry clusters, industry districts, and business ecosystem.Besides the production/services focus, a large number of more re-cent VBEs focus in new areas, e.g. science and virtual laboratories,crises management. Some examples of VBEs thus include:

s Industry cluster – is one of the earliest forms of VO breedingenvironments, consisting of a group of companies, typicallylocated in the same geographic region and operating in a com-mon business sector, that keep some ‘‘binds” with each otherin order to increase their general competitiveness in the largerarea. These binds may include sharing some buyer–supplierrelationships, common technologies and tools, common buyers,distribution channels or common labor pools, all contributing tosome form of cooperation or collaboration when businessopportunities arise. Earlier forms of clusters did not require astrong ICT infrastructure but more and more collaborationresorts to such support.

s Industrial district – is a term mostly used in Italy that repre-sents a concept quite similar to an industry cluster. It can befocused on one single sector or cover a number of sectors in agiven region. Besides enterprises, other institutions such as localdevelopment agencies, academic and research institutions, etc.,may play and active role in this VBE.

s Business ecosystems are inspired by the mechanisms of the bio-logical ecosystems, representing networks that try to preservelocal specificities, tradition, and culture, and frequently benefitfrom (local) government incentives. A business ecosystem, alsosometimes called digital ecosystem, is similar to a cluster orindustry district, although it is not limited to one sector but rathertends to cover the key sectors within the geographical region. Inmost aspects business ecosystems simply represents a renamingof the industrial district concept. Namely, differences are subtleand can perhaps be found only in a clearer emphasis on theinvolvement of a diversity of their actors – the living forces of aregion – in addition to companies, and a more intense use of advancedICT tools to support collaboration. The ICT support is ‘‘freeing”these VBEs from the boundaries of a geographical region.� Category 9: (Collaborative) virtual laboratory (VL) networks

– represent the alliance of autonomous research organiza-tions, each having their own resources (equipments, tools,data and information related to their past experiments,etc.), enabling their researchers, located in different geo-graphically-spread centers to be recognized and consideredfor taking part in potential opportunity-based problem-solv-ing collaborations (forming then a kind of hybrid VO/VT foreach problem-solving). During a problem-solving collabora-tion process, it is typical that some expensive lab equipmentsowned by one or more organizations is made available for(remote) use/access by the other collaboration partners,which is one distinctive feature of this VBE.

� Category 10: Disaster rescue networks – a strategic allianceof governmental and non-governmental organizations spe-cialized in rescue operations in case of disasters it is anotherrecent form of VBE aimed at facilitating a rapid and well-coordinated response in case of a disaster. This VBE couldhave local/regional coverage or a global geographic span.

VBE is thus the more recent term that was coined to coverthese cases and clearly extends their scope to both regional andglobal coverage, single and multi-specialty sector, and for-profit/non-profit organizations (Afsarmanesh & Camarinha-Matos,2005). Complementary views and coverage of these organizationalforms are shown in Fig. 4. Certainly other examples of CNOs areemerging but only the most currently found are mentioned.

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Initiation Foundation

CreationOperation

Evolution

Metamorphosis

Dissolution

OR

Fig. 5. CNO life cycle.

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A similar long-term organization is

� Category 11: Professional virtual community is a long-term alli-ance of professional individuals that provides an environment tofacilitate the agile and fluid formation of virtual teams (VTs),similar to what VBE aims to provide for the VOs.

One example could be an association of free-lancer knowledgeworkers (e.g. engineers, consultants). When a business opportunityis acquired (e.g. a design project or consultation activity), similarlyto the VO creation, a temporary coalition of experts – a VirtualTeam (VT) – can be rapidly formed according to the specific needsof that business opportunity.

Benefiting from the acquired experience with the mentionedcases of collaborative networks and the recent developments inICT, new collaborative organizational forms are emerging. Oneexample is the so-called ‘‘grid manufacturing” or ‘‘dispersemanufacturing”. This organizational form is basically character-ized by

� A joint pool of resources.� Separation of ownership from management – joint (central-

ized?) management.� The need for continuous awareness of capacities, status, etc.� The need for proper business models (how to pay the

owners).� Specialized scheduling policies and access rights management.

In terms of the taxonomy introduced in Fig. 2, it is still unclearhow to classify this structure. It can be seen as a continuous pro-duction network or as a VBE. Similar difficulty can be found inother emerging collaborative forms (e.g. customers’ involvementin networks, collaborative innovation networks). However, due tothe early stages of their development, it is necessary to wait beforea better characterization can be made and building a more compre-hensive typology is attempted.

Simultaneously at the shop-floor level a convergent phenome-non is observed. More and more manufacturing systems arecomposed of autonomous (progressively more intelligent) compo-nents/resources, interconnected by computer networks (a trulyubiquitous computing and sensing environment) forming ‘‘coali-tions” that need to be easily re-configured as driven by the needsof flexibility and agility. The traditional paradigm of control sys-tems is giving pace to other mechanisms (e.g. coordination,negotiation, fuzzy reasoning, contracting) that are characteristicof collaborative networks, as seen in innovative proposals foradvanced manufacturing systems architectures (Barata & Camarin-ha-Matos, 2003; Eberts & Nof, 1993). Therefore, the new disciplineof collaborative networks, as proposed in (Camarinha-Matos &Afsarmanesh, 2005) provides a uniform paradigm to address suchcomplex and highly dynamic systems.

2.4. Life cycle

Given the dynamic and often temporary nature of CNOs, it isimportant to understand their life cycle (Camarinha-Matos & Afs-armanesh, 2008) in order to better analyze and support them. Ata macroscopic level the following main stages can be considered(Fig. 5):

� Creation: stage when the CNO is started; it can be divided intotwo phases, namely (i) initiation and recruiting, dealing withthe strategic planning and initial incubation of the CNO and(ii) foundation, dealing with the constitution and start up.

� Operation: the ‘‘normal” phase of the CNO existence.

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� Evolution: when small changes in membership, roles, ordaily operating principles happen.

� Dissolution: when the CNO ceases to exist, or� Metamorphosis: when major change in objectives, principles,

and membership take place, leading to a new form oforganization.

A grasping-opportunity type of CNO such as a VO will typicallydissolve after accomplishing its goal. In the case of a long-term alli-ance such as a VBE, considering its valuable bag of assets (e.g. ac-quired knowledge, lessons learned, resources, and processes)gradually collected during its operation, its dissolution is a veryunusual situation. Instead, it is much more probable that thisCNO goes through another stage, that we call the metamorphosisstage, where it can evolve by changing its form and purpose. There-fore, the life cycle model shown in Fig. 5 extends previous modelsthat were typically focused on the other four stages.

3. Issues on collaborative value creation

What will my organization benefit, if embarking in a collabora-tive network? Will the benefits compensate for the extra overhead,loosing some control, and even taking the risks that collaborationimplies? These are main questions that many small and mediumenterprise (SME) managers ask when the issue of collaboration isbrought up. In fact, effective collaboration involves considerablepreparation costs/time, in addition to the operational overheadsand risks, which represent barriers to the rapid formation of dy-namic coalitions in response to business opportunities. As a basicrule, in order to support rapid formation of collaborative networks,e.g. a VO, it is necessary that potential partners are ready in ad-vance and prepared to participate in such collaboration. This pre-paredness includes compliance with a common interoperableinfrastructure, adoption of common operating rules, and commoncollaboration agreement, among others. Any collaboration also re-quires a base level of trust among the organizations. Therefore, theconcept of VO breeding environment, as introduced above, hasemerged to provide the necessary context for the effective creationof dynamic virtual organizations.

The main aims for an organization’s participation in a VBEwould include the acquisition of: Agility for opportunity-basedVO creation; effective common ICT infrastructure establishment;mechanisms and guidelines for VO creation; general guidelinesfor collaboration; and increase chances of VO involvement.

There are several other reasons that can motivate an enterpriseto join a VBE as illustrated in Table 1 which is based on empiricaldata collected from various existing VBEs (Camarinha-Matos &Afsarmanesh, 2006a).

These factors affect mainly the VBE creation phase or the phaseof joining an existing VBE. But another relevant question is ‘‘Whatkeeps the current VBE members happy and loyal to the VBE?” Theinitial attracting factors are not exactly the same that keep mem-bers happy in the long run! A company might have been attracted

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Table 1Examples of (empirical) reasons to join a VBE.

Market-related reasons Organizational reasons

� Increase activities/profit� Coping with market turbulence� Increase chances of survival� More chances to compete with

larger companies� Lobbying and market influence

(branding/marketing)� Easier access to loans� Cheaper group insurance� Better negotiation power (e.g.

joint purchasing)� Prestige, reputation, reference� Access/explore new market/

product (e.g. multidisciplinarysector)

� Expand geographical coverage� Increase potential for innovation� Economy of scale� Develop branding� Achieve (global) diversity

� Management of competencies andresources

� Approaches to build trust� Improve potential of risk taking� Support members through necessary re-

organization� Learning and training� Shared bag of assets (e.g. shared tools,

lessons learned, legal information, sam-ple contracts)

� Organize success stories and jointadvertisement

� Help in attaining clear focus/developingcore competencies

� Sharing costs of branding/marketing

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by the opportunity of getting access to new knowledge but after awhile, once this objective has been achieved, different reasons arenecessary to keep it involved in the VBE. Therefore, Table 2, result-ing from a brainstorming exercise organized by the ECOLEADproject (Camarinha-Matos, Afsarmanesh, & Ollus, 2008) andinvolving a large group of experts, illustrates some of the potentialreasons and motivating factors for the long-term sustainability ofthe VBE. These factors have to be taken into account during theoperation and evolution stages of the VBE life cycle.

Although some of these reasons are common to Table 1, there isa clear focus here on the profit/direct benefits originated throughthe VBE. Naturally the participation in a VBE does not only bringbenefits. Collaboration also adds ‘‘overheads” and brings its ownrisks. Therefore a number of other barriers to the participation ina VBE have been identified when interviewing running VBEs(Alfaro Saiz, Rodriguez, & Ortiz, 2005). Assuming that the benefitsare potentially higher than the risks/costs, a challenge here is theidentification and development of remedy measures to overcomethese fears (see examples in Table 3). These measures need to beconsidered both during the creation phase (e.g. set-up of gover-nance principles and performance indicators selection) and duringthe operation phase (e.g. support mechanisms and tools for benefitanalysis and distribution, trust worthiness assessment, supervisionrules, etc.).

These are only some empiric examples collected from the inter-action with several existing networks (Camarinha-Matos et al.,2008). As the number and variety of collaborative networks

Table 2Reasons to stay as a VBE member.

Motivation to stay

� Profit from collaborative businesses� Benefiting from the existing infrastructure� Better marketing possibilities (fairs, cheaper admission costs, better publicity/

visibility (better location),. . .)� Better strategic position through the VBE� Easy access to complementary skills� Explore new market/new product (multi-disciplinary-sector), expand

geographical coverage� Potential for innovation� Continue profiting from the opportunities only available through the VBE� Fight against a common enemy� Better negotiation power� Portfolio of success stories and advertising� Existence of a schema of incentives for collaboration

Please cite this article in press as: Camarinha-Matos, L. M., et al. Collaputers & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

increases, it is important to further and more systematically elab-orate on these elements.

Another relevant issue is the creation of a system of incentivesto motivate participants to pro-actively engage in collaborativevalue creation. Complementarily, fairness and the crucial issue ofproperly determining the individual participant’s share are impor-tant; namely to identify both its contributions towards, as well asbenefits from, collaboration in the network. These are the othermajor issues for which transparent governance principles, when-ever possible supported by objective indicators, are needed.

In fact it is frequently mentioned that the lack of objective mea-surements, clearly showing the benefits of collaboration, is anobstacle for a wider acceptance of these new organizational forms.Generally, it is difficult to prove the advantages of (dynamic) col-laborative networks in contrast to more traditional organizationalforms in terms of improved performance. Being able to measurethe global performance of a collaborative network, as well as theindividual performance of each of its members, could representan important boosting element for the wide acceptance of the par-adigm. However performance indicators tailored to CNOs are notyet available (Alfaro Saiz et al., 2005; Kolakovic, 2003). A perfor-mance measurement depends on the premises of the measurementsystem used. Collaborative networks challenge the premises of themethods developed in the past (Folan & Browne, 2005), thereforethe applicability of existing measurement systems in this area isquestionable. First it is necessary to take into account that perfor-mance, and related generated values, can be seen from differentpoints of view, e.g. from the individual participant perspective,from the network coordination perspective, and from the sur-rounding environment/society perspective.

Understanding and making the nature of collaboration benefitsexplicit, is also an important way to ensure that every member ofthe network understands the measurements in the same way(same ‘‘perception of value”). This is also a requirement for goalsalignment in order to facilitate the coherence of members’ goalswith the measurements.

The actual meaning of a benefit depends on the underlyingvalue system that is used in each context. It is commonly acceptedthat the behavior of an individual, society, or business ecosystem isdetermined by its value system. It is also intuitively understoodthat the values considered in a business-oriented collaborative net-work are different from those in a non-profit context (e.g. disasterrescue network). In fact the business/economy oriented schooltends to look at a value system in terms of the activity links be-tween a company and its suppliers and customers, putting theemphasis on how much (monetary value), a product or service isworth to someone. On the other hand, the socio-psychologicalschool considers a value system as the ordering and prioritizationof a set of values that an actor or a society of actors holds. Thetwo perspectives are not necessarily incompatible, but more re-search is needed in order to develop a general (abstract) theoryof value systems that can then be instantiated to different applica-tion contexts.

In general, the structure of a value system, and therefore thedrivers of the CNO behavior, might include multiple variables/aspects. Simultaneously other elements that may determine thebehavior of the network and its members include scheme of incen-tives, the existing level of trust, code of ethics, culture of collabora-tion, and collaboration agreements. As a very preliminary steptowards a theory of value systems and characterization of collabo-ration benefits, a number of indicators have been suggested in(Camarinha-Matos & Abreu, 2005). In this work the benefits re-ceived by a participant include both the benefits resulted directlyfrom the activities performed by this participant and the benefitsto this participant resulted by the activities performed by the otherparticipants (external benefits). By combining base concepts from

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Table 3Reasons to fear being a VBE member.

Fear Possible remedy

� Return on time/cost investment –fear of not having ROI

� Proactive opportunity brokerage in themarket/society

� Building success stories� Elaborate better value system models

� Loosing decision making power –a collaboration side-effect

� Creating flexibility in decision making� Transparent rules/regulations� Different levels of membership

� Trust and intellectual propertyrights problems

� Mechanisms to establish trust/forecasttrustworthiness

� Enhance trust in VBE establishment itself– transparent rules/regulations

� Definition of incentives and sanctions� Enforcement of the defined rules to be a

‘‘good citizen” in VBE� Fear of partner selection by a

virtual system� Neutral transparent definition of selec-

tion process� Assistance tools but decisions made by

humans� Required high commitment level � Different levels of membership

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the transactions cost theory, social networks analysis, and gametheory, a number of indicators is proposed (see summary in Table4). When combined with for instance a graphical representation,these indicators can provide the collaborative network participantsa more objective view of their global and individual performance.

Although some experiments were carried out with real datafrom both a business-oriented network and a social-oriented net-work, much more research is needed in this area. Furthermore, inpractice, collecting the base data from an operational network israther a difficult task, often overlooked by researchers, and whichrequires the development of new approaches and supportinginfrastructures.

4. CNOs applied to the manufacturing industry

Several cases have been studied that validate and demonstratethe applicability of the CNO concepts especially in the manufactur-ing industry. The following sections give a brief introduction toeight case studies of CNOS (mostly VBEs) from different regionsof the world. Two summary tables present the main characteristicsof each CNO: main entities, industry sector, number of members,region, main business process, governance structure and ICT toolsare detailed. At the end of this section, main conclusions and les-sons learned about these cases are depicted.

Table 4Examples of indicators of benefits in collaborative networks.

Social contribution benefits – sum of benefits contributed by an actor ai to its partnersExternal benefits – sum of benefits received by an actor ai as a result of the activity of tTotal individual benefits – sum of external benefits plus self-benefits of an actor ai

Individual generated benefits – sum of social contributed benefits plus self-benefits of aTotal received benefits – sum of external benefits achieved by a set of actorsTotal contributed benefits – sum of social contributed benefits generated by a set of actTotal network benefits – sum of benefits achieved by a set of actors in a specific collaboProgress ratio – a macro indicator that represents the variation of the global benefits ovSocial capital – density of the network benefits relationCooperative development ratio – measures the progress of cooperation benefits for a seIndividual contribution index – normalized contribution of an actor to the collaborativeApparent individual contribution index – based on the number of contribution links (i.e. t

index gives an apparent and simple to compute measure of the involvement of an acIndividual external benefits index (IBI) – normalized external benefits received by an acApparent individual benefits index – indicator based on the number of received contrib

expresses the popularity or prestige of the actorReciprocity index (RI) – balance between credit (sum of benefits contributed by an actor

by an actor ai as a result of the performance of all actors (or one specific partner) involRI > 0 – altruist behavior

Please cite this article in press as: Camarinha-Matos, L. M., et al. Collaputers & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

4.1. Case 1: IECOS

IECOS S.A de C.V (Integration Engineering and Construction Sys-tems), is a brokerage company, created at CIDYT (Center of Designin Innovation and Technology) of Monterrey Tech, Mexico, with theprimary aim to demonstrate how a broker company for a networkof enterprises could be designed, developed and operated (Flores &Molina, 2000; Molina & Flores, 1999). In 2000, IECOS initiatedoperations working as a broker, being its main aim to search andexploit business opportunities together with Mexican SMEs form-ing a VBE. IECOS is focused on innovation technology projectsthrough the integration of capabilities and competencies of itsallies and partners, guarantying customer satisfaction and costreduction through an efficient partnership management and effec-tive integration of core competencies of Latin–American Industry.IECOS has performed several projects using the VO model; mainprojects are related to the manufacturing of maintenance toolingfor the aerospace industry, manufacturing of standard parts forcapital goods equipment, and design and production of medicaldevices.

4.2. Case 2: Virtuelle Fabrik

Virtuelle Fabrik (or Virtual Factory, VF) is a VBE of industrialSME’s that provides a full range of industrial services and produc-tion to the customers in the metal–mechanics sector. The networkenables the SME’s to act in collaboration with other SME’s the sameway as with large manufacturing companies. Main industry sectorsthat VF attends are: automotive industry, aircraft and space indus-try, medical and environmental technologies, paper and glassindustry, process plants, electronic, special machines, automationand robotics. Virtuelle Fabrik started operations in 1995 with ini-tial support of the University of St. Gallen and the Swiss Commis-sion for Technology and Innovation; the financial support was fromthe Swiss CIM (computer integrated manufacturing) action pro-gram (1997–1998). At the end of the two year project, the networkdeveloped its own dynamics in a way that it was functioning inde-pendently and profitably (Plüss & Huber, 2005). Nowadays threemain levels compose the Virtuelle Fabrik network: VF in the SwissEuregio Bodensee region (the founding members), the VF in the Ba-den-Wurtemberg Germany region, and Virtuelle Fabrik AG, whichwas founded in 2001 as project management and sales specializedentity for the whole VF network. The Virtual Factory offers all nec-essary structures and aids for the fast structuring of business sys-tems in its network. The ‘‘backbone” of VF is a coordinated

as a result of its performance in the collaboration processhe other actors involved in the collaboration process

ctor ai

orsration process or over a period of timeer a period of time

t of actors over a period of timenetwork

he out degree of the actor in the graph representing the cooperation benefits), thistor in the collaboration processtor, expressing the popularity or prestige of the actorution links (i.e. the in degree of the actor in the graph). Like IBI, this index also

ai to all its partners (or one specific partner)) and debit (sum of benefits receivedved in the cooperation process). RI < 0 – selfish behavior, RI = 0 – null balance and

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organization and information infrastructure (Webcorp); which isan obligatory standard for all participants.

4.3. Case 3: Virfebras

VIRFEBRAS is a VBE that resulted of a research project coordi-nated by the University of Caxias do Sul (UCS), and the partnershipamong twelve mold and die makers, a Brazilian agency for sup-porting SMEs (SEBRAERS), and the State of Rio Grande do Sul gov-ernment (Galelli, Costa, Graciolli, Vallejos, & Luciano, 2001; Vargas& Wolf, 2006). It was created in 1998 as an initiative to overcometurbulent, dynamic and uncertain market environments in thissector, in addition to an increasing establishment of foreign com-panies in the mold and die sector of the Brazilian automotive sec-tor. The creation of VIRFEBRAS was a strategy defined by itsmembers to satisfy some main market demands: short deliverytime, low costs, high quality standards, new technological develop-ments, qualified personnel, and ‘‘one-of-a-kind” production sys-tem. In Virfebras each VBE member can act as broker bringingbusiness opportunities. The enterprise that brings an opportunityis the coordinator of its development. When a business opportu-nity is detected, it is announced to the interested enterprises andthe best tender is selected to participate in the focused virtualenterprise.

4.4. Case 4: VEN – virtual enterprises network

VEN was launched by Yorkshire Forward in 2004 and jointlyfunded by the European Union. VEN aims to change the way SMEs(small and medium enterprises) compete for major contracts byallowing companies within specific sectors to negotiate and tradeas a single entity to win major contracts. It also provides accessto the region’s internationally regarded research institutes and uni-versities, which spend more than twice the national average onR&D. VEN is currently working in six sectors in the Yorkshire andHumber region covering manufacturing, digital industries, health-care and bioscience, food and drink, chemicals and construction(Löh, Katzy, Booth, Faughy, & Thompson, 2003).

VEN works in partnership with member organizations acrossmany product and service market sectors, mapping their core com-petencies for further matching with VEN customers’ opportunities.VEN has representatives (brokers) working across the globe toidentify new opportunities for its members and wants to be ableto help its members securing new and sustainable businessthrough the VEN information and collaboration networks. Whena new opportunity is found a contract is made and a VE is createdfrom the VEN membership to deliver that contract; the virtualenterprise exists during the life of the contract and then disbands.

4.5. Case 5: Supply Network Shannon (SNS)

Supply Network Shannon (SNS) is an open, sector-focused net-work of engineering and electronics sub-supply companies locatedin the Shannon region, Ireland, launched in January 1999 (Heavey,Byrne, Liston, & Byrne, 2006). SNS is an industry-led initiativeaimed at: representing, promoting, developing and connecting to-gether the participating companies. Supply Network Shannon ben-efits all engineering and electronics sub-supply companies in theregion, regardless of size or activity and aims at helping to rein-force the regions’ position as a world class source of sub-supplyproducts and services. SNS provides a framework for companiesto collaborate in joint marketing, training, development, and col-laborative quotation development for participation in virtualenterprises. As such, SNS currently operates as a regional VBE withindividual members currently creating sub-networks on a globalscale.

Please cite this article in press as: Camarinha-Matos, L. M., et al. Collaputers & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

4.6. Case 6: Torino Wireless

The Torino Wireless cluster, created in December 2001, bringstogether the most relevant ICT players in the Piedmont area in Italyin a shared system of values, strategies, and actions in order to in-crease the competitiveness of the territory, through strong integra-tion of research and development (R&D), entrepreneurship andventure capital (www.torinowireless.it). The cluster activities arecoordinated by the Torino Wireless Foundation (created in Decem-ber 2002), which defines the strategic lines of the cluster and coor-dinates its activities, guaranteeing coherence and integration of theICT development policies of the territory. Torino Wireless seeks tofoster the development of a center of excellence in R&D and highereducation, with, among other things, a particular focus on intellec-tual property, and promotion of enterprise acceleration in order tocreate new start-ups and spin-offs and supporting the growth ofinnovative SMEs, and assuring financial support for enterprises,by stimulating private and public investments.

4.7. Case 7: CeBeNetwork

CeBeNetwork was founded in 1996 establishing a network thatprovides the aeronautical industry with engineering services,where Airbus is the main customer. CeBeNetwork comprises morethan 30 companies, mainly SME’s (Galeano et al., 2008). Othercustomers from industries with similar demands are served likeautomotive, shipbuilding or wind energy. CeBeNetwork has inter-disciplinary teams in the fields of aero-dynamics, computer aidedengineering, systems engineering, as well as process and technol-ogy management and software development which are focused onintegrated services in the process of product development.Primarily involved in the development of custom-made solutionsand innovative process designs are the specialist divisions forengineering services and technology-support. CeBeNetwork itselfis the leader of this VBE and acts both as a broker and as a mem-ber. As a 1st Tier supplier, it represents the interface to the cus-tomer and is the only company in the collaborative networkwhich has got a valid frame contract. When a VO should beformed, the role of the leader is taken; activities such as: partnerssearch and selection, agreements, management and coordinationof the VO are developed by CeBeNetwork. Main objectives ofCeBeNetwork are efficient management of VOs in order to becompetitive, remain in the market and become one of the keysuppliers in the future.

4.8. Case 8: Swiss MicroTech

Swiss MicroTech (SMT) is a regional collaborative network cre-ated in 2001 by SMEs of the mechanical subcontracting sector toaddress together new markets and develop new products whichare beyond their own possibilities if they would stay alone. Micro-Tech is a platform supported by the Swiss Group for MechanicalIndustry (GIM-CH), the Department of Economic Affairs of theState of Vaud and the Development Economy of Western Switzer-land (DEWS). Swiss MicroTech offers services to a wide range ofindustries, particularly telecommunications, computer systems,medical devices, precision machinery and, specially, fine watch-making. Within SMT, VO’s are always realized by companies,SMT is an association, and as such it is not able to run real busi-nesses. In 2005, the creation of DecoCHina, representing an exten-sion of the VBE to China, appears as a strategic measure to dealwith price competition and the emerging Chinese market.DecoCHina is thus an international VBE combining two regionalnetworks: SMT in Europe and a new parent Chinese network inthe Guangdong Province.

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Table 5General summary table of analyzed CNO cases.

CNO (VBE)case

Main entities Industry sector Size(# members)

Region Main business process Governance structure

IECOS � Virtual enterprisebroker

� Virtual industryclusters

� Virtual enterprises

Manufacturing– Metal–mechanic– Medical products

30Manufacturingcompanies

Monterrey,Mexico

– Search and select businessopportunities

– Project planning– Project execution– Customer follow-up

General director thatmanages two main groups:engineering Group andbrokerage Group

VirtuelleFabrik � Broker

� Breeding environment� Virtual enterprise

Manufacturing� Design,

engineering� Metal–mechanic� Plastics

90 Companies SwitzerlandandGermany

� Network development� Order processing� Marketing and sales� Training and further training� Finance and controlling

Five working parties (formedby representatives of eachcompany)executivecommittee (formed by fivemembers and headed by achairman).

Virfebras � VE breedingenvironment

� VE� VE coordinator

(defined according toeach VE)

Manufacturing:� Mold and dies

12 Companies Caxias doSul, Brazil � Training and education

� Technology set-up� Market strategy� Benchmarking� Identification of shareable

resources� Organizational structure� Operation

Directory board composed bya president, a vice-presidentand a financialresponsible.Statute andethical rules are also defined.

VEN� Associate members,� Accredited members� Professional

community members� Lead integrators� Broker

� Manufacturing� Digital industries� Healthcare and

bioscience� Food and drink� Chemicals� Construction

�250Enterprises

Yorkshire,UK � Member-related processes

(business health check, work-shops, forums, risk management)

� Information processes (quotation,exports, getting a product to mar-ket, partnering)

� Broker processes (broker registra-tion and approval, opportunitiesregistration and assessment)

� VENabledTM processes (ICT thatsupport the virtual factory opera-tion, and the marketplace)VEN-proTM processes (VEN bidsupporting processes andsystems)

Advisory board as the finalaccountable body, with thepower to hire and fire serviceproviders to the VEN andsanction or dismiss VENmembers.

SupplyNetworkShannon

Business network (VBE)formed by:companymembers, developmentagencies, universities

Engineering andelectronics sub-supply companies

25 Members(mainly SMEs)

Shannonregion ofIreland

Two core activities: training andpromotion (marketing andquotation).Three main areas ofactivities:� Supply chain management (SCM)� Technical issues relevant to

engineering and electricalmanufacturers

� ICT usage

Steering committee (ninemembers and twodevelopment agencies) foursub-committees: marketing,environment, training andprojects

TorinoWireless

VBE network formed by:national and localauthorities, socialpartners, enterprises,universities and financialinstitutions

ICT (wireless,software,multimedia,technologies, micro-electric and opticaldevices, wire-linetechnologies)

�47 Members Turin andPiedmont,Italy

� R&D� Enterprise acceleration (creation

of new entrepreneurship anddevelopment of SMEs)

� Financial support (stimulatingprivate and public investment)

� IPR valorization and technologytransfer

� Communication and mediarelations

Torino wireless foundation(Administrative Committee,President, Vice-President,Reviewers College, OrdinaryAssembly)

CeBeNetwork Company membersBroker(CeBeNetwork itself)

IT market,engineering sciencesand softwaredevelopment– Main customer:

aeronauticalindustry

30 Partners Germany� Cooperation management and

brokerage services (whichincludes coordination andmanagement of VOs)

� Project and quality management� On-site support

CeBeNetwork group formedby companies:� CeBeNetwork engineering

and IT� CeBeNetwork services� CeBeNetwork France� CeBeNetwork UK� Werucon automation

GmbHSwiss

MicroTechCompany memberseducation and researchcenters, technologicalparks and specializedconsulting centers

Watch-making and inother micro-technologyapplications

Sevenenterprisescompanies

Switzerlandand China � Support for set-up a business in

Switzerland� Marketing and promotion (work-

shops, forums, exhibitions)� Job search� Research and training� News postingTechnological

development

An association with:� Steering committee� President� General assembly

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4.9. Summary of characteristics of the analyzed cases

Following tables synthesize the results found in the cases ana-lyzed in terms of their main entities, the industrial sector, size, re-gion, main business process, governance structure (see Table 5)and ICT tools used (see Table 6).

4.10. General aspects about the analyzed cases

Presented CNO cases, mostly VBE examples, illustrate the stateof applicability of the collaborative network concepts in manufac-turing industries. Some general conclusions that can be drawnfrom these cases regarding the main considered characteristics are

� Main entities involved in VBEs are usually SMEs; brokers, inte-grators, and sub-networks of companies appear in some cases.Support institutions that support and enhance the performanceof the network are also part of VBEs, such as: universities,regional development agencies, financial and governmentalinstitutions.

Table 6ICT tools used in the studied CNO cases.

CNO (VBE) case Operation

IECOS � Web site/portal� Automatic diagnosis methodology (for evaluating

members)� Internal management system (Peñaranda, Galeano, Romero,

Mejía, & Molina, 2006)� Administrative system (based on excel sheets)

Virtuelle Fabrik � Web site/portal� Webcorp (internal order management system) (Katzy & Ma,

2002)� International portal VF2VF (for posting customer demands)

(Huber & Plüss, 2003)VIRFEBRAS � Web site/portal

� Virfebras information system (VIS), with two modules(Lima, Vallejos, & Varvakis, 2004):

� Marketing information (public online information and ordertracking)

� VEs operation information (only for members)VEN � Web site/portal

� VEN main tools:� Opportunity management� Virtual factory building process: VENabledTM and

VENproTM� Advanced competency profiling� CRM modules� e-marketplace� ERP and MRP interface� Knowledge management� Networking forums� Access to legal/financial resources

Supply NetworkShannon

� Currently SNS have no common ICT infrastructure in place.� Simple web site

Torino Wirelessnetwork

� Internet portal with functionalities for:� Searching companies members and viewing their profiles� Seeing company news (news can be posted by members)� Promoting networking events� Members’ area (publication of profiles, news and products

launches, press review, access to specialized information)CeBeNetwork � This network doesn’t use a specific ICT tool. Standard office

tools are used.� Web site

Swiss MicroTech � Web site� Search engine (for partners search and technical

information)� Job search� News and events posting

Please cite this article in press as: Camarinha-Matos, L. M., et al. Collaputers & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

� Different levels of members could also be defined in a VBE, as inthe case of VEN, which defines ‘‘accredited members” after suc-ceeding an evaluation/accreditation process. When this processis not a rule in the VBE, the profile and competencies definitionof the members becomes an important issue.

� Although the definition of a single industry sector for a VBE isnot a common practice, members usually belong to complemen-tary sectors, or to the same product/service supply chain. Verti-cal and horizontal chain integration can be characteristics thatcould be found in different VBEs.

� Most of the members, in the analyzed VBEs, belong to the samegeographic region. Those VBEs are focused on the competitiveimprovement of a specific region or industry sector in a geo-graphical area (regional ecosystem). This could be explainedby the programs of incentives that local support institutionsmay offer to SMEs in a specific country or region. Neverthelessthe case of Virtuelle Fabrik and Swiss MicroTech are the excep-tion. For Swiss MicroTech to include Chinese companies in thenetwork is a business strategy aimed at overcoming actual mar-ket trends. CeBeNetwork is also extending its membership toother countries.

� Main common business processes that the studied VBEs have:s Processes that support the network creation and enhance-

ment, such as: partners profiling, partners’ accreditation,training and education.

s Processes that support the creation and management of VEs/VOs, such as: marketing and commercialization tasks, busi-ness opportunities identification and assessment, brokerageservices, partners’ search, quotation and negotiation support,project and quality management, support for export pro-cesses, customer follow-up.

s Innovation and technology processes: research and techno-logical development support, entrepreneurship programs,and intellectual property rights (IPR) services.

s ICT processes, the ones related to the offering of servicesthrough ICT tools and usually internet-based applications.

s Complementary processes such as: financial support, special-ized training, collaboration tools, job search and newsposting.

� Governance structure of the VBE may depend on its formal con-

stitutions and the possibilities offered by the governing legalframework; industrial associations and specific coordinationcompanies are the most common structures.

� The use of ICT tools supporting the operation of VBEs depend oneach case. Some cases use specific software and own-developedplatforms supporting VO operation, such as VF, VEN and Virfe-bras; while other VBEs have early tools that support basic man-agement operations. This point shows an opportunity area forICT developers.

5. Discussion – CNOs and manufacturing challenges

How can CNOs contribute to achieve the challenges identifiedfor the visionary manufacturing 2020?

Challenge 1: Achieve concurrency in all operations. ‘‘Concurrency”means that planning, development, and implementation activi-ties will be done in parallel or in partial overlap, rather thansequentially. Using the VBE and VO models, the conceptualiza-tion, design, and production of products and services could beas concurrent as possible, due to the integration of differententerprises’ core competencies in collaborative networks. Thiswill reduce time-to-market, encourage innovation, and improvequality for new products, services and technologies developedin the networks. Virtuelle fabrik and IECOS are examples of net-

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TabICT

Lif

Cre

Op

Evo

Dis

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Pp

works that integrate the engineering, design, and manufactur-ing tasks in parallel using the core competences of theirmembers.Challenge 2: Integrate human and technical resources to enhanceworkforce performance and satisfaction. CNO models are aimedto integrate human and technical resources. To meet marketdemands, all members of the CNO, including people, areexpected to react quickly when a customer requirementappears; this flexibility is achieved by the integration of compe-tencies, adoption of common business practices, and the use ofICT tools (such as the VO creation and operation tools men-tioned in Table 7). The collaboration process carried out inCNOs, together with the use of ICT support the following issuesthat help to overcome this challenge:� Effective communications at all levels of an organization,

especially with customers, suppliers, and partners.� Adaptation to the changing needs of the market, due to the

rapid configuration of VOs.� Rapid learning throughout the enterprises, achieving rapid

assimilation of new technologies.� Adoption of a systems approach, due to the engagement of

the partners that participate in CNOs which implies mutualtrust, common goal-oriented risk taking, commitment, andresources sharing.

� ICT tools used in VEN are an example of the human and tech-nical resources integration in the brokerage and VO manage-ment process (see Table 6).

Challenge 3: ‘‘Instantaneously” transform information gatheredfrom a vast array of diverse sources into useful knowledge for mak-ing effective decisions. Manufacturers involved in a CNO can bedistributed worldwide to meet customer demands; this meansthat the use of fast, accurate and high quality communicationsis a must. ICT tools that support transparent, plug and play andstandard communications are the base for CNO operation.Ontology based systems, trust management tools, inheritancemanagement systems, partners’ search and suggestion, negoti-

le 7tools that support the VBE/VO life cycle summary (according to the ECOLEAD project resu

e cycle stage ICT tools/services for the VBE

ation VBE management system, including the following tools/servicesfor VBE configuration cycle:� Business rules uploading� Ontology uploading and adaptation� Trust model adaptation� Initial members registration

eration VBE management system, including the following tools/servicesfor VBE operation cycle:� Registration of members� Members roles, rights and responsibility management� Member rewarding� VO creation tools (see next column)� Registration of VOs� VO performance registry� Profiling and competency management� Ontology view and evolution� Trust management� Bag of assets management� Decision support management

lution/metamorphosis

VBE management system, including the following tools/services for VBEevolution/metamorphosis cycle:� New domain parameterization� Members roles, rights and responsibility reassignment� Ontology evolution� Trust model evolution

solution VBE management system, including the following tools/services for VBEdissolution:� Members roles, rights and responsibility reassignment� VBE inheritance management

lease cite this article in press as: Camarinha-Matos, L. M., et al. Collaboruters & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

ation wizard, VO modeling tools, decision support systems,knowledge management systems, and monitoring systems forVBEs and VOs are examples of ICT services (see Table 7 in Sec-tion 6) that capture and store data and information and trans-form them into useful knowledge for CNOs. CeBeNetwork isan example that integrates companies in different countries,using engineering tools for analysis and modeling in the aero-nautics industry.Challenge 4: Reduce production waste and product environmentalimpact to ‘‘near zero”. Although not necessarily all CNOs are pur-suing the decrease of the environmental impact and waste con-trol, several are dealing with this issue. Cooperation, proactivetask, teamwork, and global partnering, together with govern-ments, academia, allied and competitive manufacturing/engi-neering enterprises, and communities, combined with propersystems of incentives, will allow CNOs to reach such environ-mental goals.Challenge 5: Reconfigure manufacturing enterprises rapidly inresponse to changing needs and opportunities. The goal-orienteddynamic coalitions in CNOs are established and dissolvedquickly to meet the challenges of increased access to (anddemands of) rapidly changing markets, and expected advancesin ICT. The VBE concept offers the needed conditions for rapidformation of new consortia well suited to each business oppor-tunity. Several examples of reconfiguration of manufacturingenterprises can be found during the VO creation process in allVBE cases presented.Challenge 6: Develop innovative manufacturing processes andproducts with a focus on decreasing dimensional scale. CNOs ofmanufacturing enterprises have the ability to create and pro-duce new products rapidly to meet the high expectations andconstantly changing demands of customers. The involvementof SMEs in a collaborative environment such as a VBE createsthe necessary critical mass and association of competenciesand experiences that lead to the emergence of a culture of inno-vation. The involvement of customers in these networks also

lts).

ICT tools/services for the VO

Service associated to the VBE management system to allowVO creation, including:� Collaborative opportunity identification;� CO characterization and VO rough planning;� Partners’ search and suggestion;� Negotiation wizard

VO management system, including the following tools/servicesfor VO operation cycle:� VO modeller� Supporting indicators definition� Distributed indicators information collector and integrator� Decision support system� Monitoring system� Etc.

VO management system, including the following tools/servicesfor VO evolution/metamorphosis cycle:� VO modeller� Partners’ search and suggestion, negotiation wizard� Decision support system� Distributed indicator information collector and integrator� VO inheritance management

VO management system, including the following tools/servicesfor VO dissolution:� VO consortium dissolution management� VO inheritance management

ative networked organizations – Concepts and practice ... Com-

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opens new opportunities for co-innovation. The development ofinnovative processes that would enable the manufacturing ofnew products, such as in the case of Swiss MicroTech, overcomethis challenge.

6. Pursuing a holistic approach

A large number of research projects are carried out worldwideand, as illustrated by the given examples, a growing number ofpractical cases on different forms of collaborative networks arebeing reported. This trend has so far led to an extensive amountof empirical base knowledge that now needs to be leveraged. Inaddition to the identification of many required components, tools,and the base infrastructure functionalities, awareness is being builtand partially studied regarding the fundamental configuration andoperational rules, as well as the behavioral patterns that emerge. Itis urgent to consolidate and synthesize the existing knowledge,setting a sound foundation for the future research and develop-ment in this area. In this context, the ECOLEAD integrated project(Camarinha-Matos et al., 2008) was launched in 2004 as a 4-yearinitiative, involving 28 industrial and academic organizations from15 countries of Europe and Latin America. This project’s vision isthat in ten years, in response to fast changing market conditions,most enterprises and specially the SMEs will be part of some sus-tainable collaborative networks that will act as breeding environ-ments for the formation of dynamic virtual organizations.

The fundamental assumption in this project is that a substantialincrease in materializing networked collaborative business ecosys-tems requires a comprehensive holistic approach. Given the com-plexity of the area and the multiple inter-dependencies amongthe involved business entities, social actors, and technologic ap-proaches, the substantial breakthrough cannot be achieved withonly incremental innovation in isolated areas. Therefore, the pro-ject addresses three most fundamental and inter-related focusareas – constituting pillars – as the basis for dynamic and sustain-able networked organizations including: VO breeding environ-ments (VBE), dynamic virtual organizations, and professionalvirtual communities (PVC) and virtual teams.

As the main focus of work, the VBE pillar addresses the charac-terization of these networks, namely in terms of structure, life cy-cle, competencies, working and sharing principles, value systemsand metrics, the governance principles and trust building pro-cesses, the VBE management, and VO creation, including negotia-tion and contracting. The dynamic VO area is mainly focused onthe VO management and governance approaches, performancemeasurement, and VO inheritance. PVC addresses the characteriza-tion of human-based professional communities in terms of the so-cio–economic context, governance principles, social and legalimplications, value systems, metrics and business models, as wellas the support platform for collaborative problem-solving. Interac-tions and synergies among these three entities, namely in terms ofbusiness models, value creation and corresponding metrics, are amajor issue of integration.

An effective and rapid creation of virtual organizations requirespre-existence of a suitable virtual organization breeding environ-ment (VBE) (Afsarmanesh & Camarinha-Matos, 2005). Further-more, agile/fluid creation of virtual organizations within the VBErequires the existence of VBE management system, to supportthe necessary functionalities and automated/semi-automatedactivities and processes, such as the management of partners’ com-petencies, assessment of specific trustworthiness of suggestedpartners, etc. At each stage of VBE life cycle, the VBE stakeholdersperform different activities related to the VBE. For example, at theVBE creation stage, a VBE administrator must register all foundingmembers, at the operation phase a VO planner needs to access the

Please cite this article in press as: Camarinha-Matos, L. M., et al. Collaputers & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

partners’ competencies to match with the opportunities in themarket, etc. These activities and others must be supported andfacilitated by the VBE management system. Table 7 lists the mainservices and functionalities for a VBE management system in eachof the life cycle stages.

Similar to the VBE, the VO life cycle needs tools that supporteach business process. In the VO creation phase the main function-alities should supports the agile creation of VO, including the iden-tification and characterization of the collaboration opportunity, theconsortia formation and the definition of the VO plan, governanceprinciples, negotiation, and contracts and agreements establish-ment. In the VO management the tools used are aimed to supportthe organization, allocation and coordination of resources and theiractivities as well as their inter-organizational dependencies toachieve the objectives of the VO. Table 7 also presents a summarylist of these tools.

The prototype implementations of these tools were first as-sessed by 10 end-user networks (VBEs and PVCs) and were then in-stalled in field demonstration prototypes supportingcomprehensive real business scenarios developed by those net-works (Camarinha-Matos et al., 2008).

Effective implantation of any form of collaborative network de-pends on the existence of an ICT infrastructure. Therefore, in addi-tion to specific services to support the three pillars mentionedabove, a generic horizontal infrastructure for collaboration is alsodeveloped by ECOLEAD following service oriented architecture(Rabelo, 2008).

Sustainable development of collaborative networked organiza-tions needs to be supported by stronger fundamental researchleading to the establishment of Collaborative Networks as a newscientific discipline. Ad-hoc approaches and poor understandingof the behavior of the collaborative structures and processesmainly characterize the past developments in the area of collabo-rative networked organizations. The project includes the establish-ment of a sound theoretical foundation, and a reference model, as apre-condition for the next generation of CNOs. A contribution inthis direction is the ARCON modeling framework (Camarinha-Matos & Afsarmanesh, 2006b, 2008) (Fig. 6), offering a 3-dimen-sional approach to model collaborative networks, including: (1)the CNO life cycle dimension (with creation, operation, evolution/metamorphosis, and dissolution), (2) the CNO environmental per-spectives dimension, including the Endogenous Elements (theCNO viewed from ‘‘inside”), and the Exogenous Interactions (theinteractions between the CNO and the surrounding environment),and (3) the CNO modeling intent dimension (with general-con-cepts, specific-modeling, and implementation modeling).

For the Endogenous Elements perspective four sub-dimensionsare considered: (i) Structural dimension, including the structure/composition of the constituting elements of the CNO, namely itsparticipants and their relationships, as well as the roles performedby those elements, and any other compositional characteristics ofthe network such as its typology, etc.; (ii) Componential dimen-sion, including individual tangible/intangible elements in theCNO, e.g. different resources such as the human elements, softwareand hardware resources, as well as information and knowledge;(iii) Functional dimension, including ‘‘base functions/operations”running/supported at the network, and time-sequenced flows ofexecutable operations (e.g. processes) related to different phasesof the CNO’s life cycle; and (iv) Behavioral dimension, comprisingthe principles, policies, and governance rules that either drive orconstrain the behavior of the CNO and its members over time.

For the Exogenous Interactions perspective also four sub-dimensions are considered: (i) Market dimension, including issuesrelated to both the interactions with ‘‘customers”, representingpotential beneficiaries, and ‘‘competitors”; (ii) Support dimension,including issues related to support services provided by the third

borative networked organizations – Concepts and practice ... Com-

Life

cyc

le s

tage

s

Model inten

ts

Environment characteristics- Endogenous Elements- Exogenous Interactions

GeneralRepresentation

Specific Modeling

ImplementationModeling

Model

inte

nts

E3. Functional E4. BehavioralE2. ComponentialE1. Structural

e.g.

-Participants

-Relationships

-Roles

-Relationships- Trust

- Info flow

- Control

...

Inside view

Inside view

CN

O-L

ife-C

ycle

Sta

ges

Endogenous ElementsL1.

Creation

L2. Operation

L3. Evolution

L4. Metamorphosis

/ Dissolutione.g.

- Devices

- ICT

-Human res.

-Information/ knowledge res.

-Ontology res.

-Profile /Competency data

e.g.

-Fundamental Processes

-Background processes

-Procedures

-Methodologies& approaches- Setup, operation, evolution, inheritance, etc

e.g.-Prescriptive behavior-Obligatory behavior-Constraints & conditions-Contracts & agreements-Incentives

I3. Societal I4. ConstituencyI2. SupportI1.Market

Outsideview

Outsideview

CN

O-L

ife-C

ycle

Sta

ges

L1. Creation

L2. Operation

L3. Evolution

L4. Metamorphosis

/ Dissolution

e.g.

-Network identity-Mission

-References

-Profile

-Strategy

-Interaction parties-Customers

-Competitors

Exogenous Interactions

e.g.- Network identity-Social nature-Interaction parties-Certification-Logistics-Insurance-Registries-Financial-Coaching-Training

e.g.

-Network identity-Legal status

-Values

-Interaction parties-Governmental organizations

-Associations

-Interest groups

-Other

e.g.

-Network identity-Attracting & recruiting strategy

-Interaction parties-Business org.s

-Public institutions

Surrounding environment

CNO

EndogenousElements

ExogenousInteractions

Fig. 6. ARCON modeling framework for collaborative networks.

14 L.M. Camarinha-Matos et al. / Computers & Industrial Engineering xxx (2009) xxx–xxx

ARTICLE IN PRESS

party institutions (outside of the CNO); (iii) Societal dimension, fo-cused on issues related to interactions between the CNO and thesociety in general; and (iv) Constituency dimension, related tothe interaction with the universe of potential new members ofthe CNO, i.e. the interactions with those organizations that arenot part of the CNO but that the CNO might be interested inattracting them.

Although borrowing some elements from previous works onenterprise modeling such as Zachman framework, CIM-OSA, GER-AM, etc., ARCON is intended to facilitate a better understandingof collaborative networks and provide a more systematic basisfor the design and analysis of new CNOs. A first comprehensive ref-erence model for collaborative networks applying ARCON frame-work was developed by the ECOLEAD project (Camarinha-Matos& Afsarmanesh, 2008).

7. Conclusions

Collaborative networks are commonly recognized in society as avery important instrument for survival of organizations in a periodof turbulent socio–economic changes. A growing number of variedCN forms are emerging as a result of the advances in ICT, the mar-ket and societal needs, and the progress achieved in a large numberof international projects. Of particular relevance is the develop-ment of ‘‘breeding environments” as an effective approach to facil-itate the rapid formation of temporary partnerships (virtualenterprises/virtual organizations, virtual teams).

The analysis of a significant number of existing VBEs in differentparts of the world already provides a good insight on the successfulpractices as well as current limitations of these organizational struc-tures. The combination of long-term and short-term/goal-orientednetwork structures represents an important contribution to help

Please cite this article in press as: Camarinha-Matos, L. M., et al. Collaputers & Industrial Engineering (2009), doi:10.1016/j.cie.2008.11.024

manufacturing companies, and particularly SMEs, face currentmarket challenges.

Nevertheless most of the past R&D initiatives have addressedonly partial aspects, failing to properly understand and supportthe various business entities and their inter-relationships in com-plex and fast evolving business ecosystems. The ECOLEAD projectpursued a more holistic approach considering both long-termand temporary organizations as well as networks of organizationsand networks of people.

Acknowledgements

This work was supported in part by the ECOLEAD projectfunded by the European Commission. The authors thank the valu-able contributions of their partners in the consortium.

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