Inter-Organizational DSS Applications

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Coordinated Decision-Making Support Among Business Partners

Extranet-based IODSSs provide retailers and their suppliers with the necessary tools for coordinated decision making between the two groups. Retailers often experience difficulties with the demand forecast for each product, which is a key for inventory management and delivery scheduling. The forecast could sometimes show a significant difference between the one made by the retailer and the other one made by the supplier. Such good examples are the cases of Heineken U.S.A., and Wal-Mart and Warner-Lambert (a manufacturer of consumer products). Heineken Operational Planning System (HOPS) is an extranet that links its network of regional suppliers and resellers. The HOPS extranet allows resellers to place their monthly forecasts for sales and product orders. The extranet significantly reduced the time needed to move beers from the brewery in Europe to the U.S. retail channel in just about the same time it takes Anheuser- Busch to ship from its domestic breweries (Merkow, 1997). Wal-Mart created an extranet that links its network to the network of Warner-Lambert to be used to collaborate on short-term product demand forecasts. Wal-Mart buying agents use a spreadsheet to make a preliminary forecast from the data stored in their CFAR (Collaborative Forecasting and Replenishment) server. A copy of this forecast is sent to Warner-Lambert’s CFAR server so that Warner-Lambert’s planners can revise the forecast until an agreed-upon forecast is made for each product. Refer to Darling and Semich (1996) for further details of the process and other DSS components.

A stream of recent research portends that sharing MS/OR models and data among many organizations on the Internet will become much easier. Consequently, seamless exchange or integration of MS/OR models on the Web facilitates the inter-organizational decision-making activities among trading partners (Kim, 2001).

Decision Support for Virtual Enterprises and Virtual Teams

Virtual enterprise (also known as virtual integration) is a temporary consortium of independent member companies interconnected via private and public networks to quickly exploit fast-changing worldwide manufacturing, marketing, and R&D opportunities. Virtual enterprise companies share costs and skills, and they focus on core competencies that collectively enable them to access global markets with world-class solutions that members could not deliver individually (Hardwick & Bolton, 1997). A virtual enterprise such as Cisco Systems concentrates on core competencies (the superior abilities in producing goods and services that are difficult for competitors to replicate) in which it can be world- class and relies on someone else to perform the rest (Hammer, 2000).

A frequent type of decision-making style in virtual corporations is using virtual teams. A virtual team is an electronically linked group of people who collaborate closely, even though they are separated by space (including national boundaries), time, and organizational barriers, to effectively deal with a specific task that cannot be done as efficiently or as effectively through traditional organizational structures and policies. Virtual teams have been applied to the completion of joint projects such as remote application development, new product design and development, project management, and so forth. See Lipnack and Stamps (1997) and Vest (2002) for successful examples of virtual team applications.

The development of ubiquitous computing based on secure wireless devices such as Web-enabled digital phones and digital assistants ensures greater connectivity and robust communication and decision support for virtual teams and virtual organizations (Shim et al., 2002). Some groupware such as the “decision organizer” run very well on pocket PCs connected to the Internet (i.e., iPAQ) or a pocket communicator (i.e., Nokia 9210). A virtual team member with a wireless mobile support platform can use groupware to initiate a session, organize, rate, and rank the ideas of virtual team members. The virtual support platform can also interact with personal computers with the Internet (Shakun, Pomerol, Bui, & Carlsson, 2002).

Global Supply Chain Management

The supply chain is a series of physical entities associated in the process beginning with procurement of raw materials through several multiple-tier suppliers (upstream supply chain), and internal manufacturing processes used by an organization (internal supply chain), and ending with the delivery of the finished goods to the customers, distributors of finished products, and retail outlets (downward stream supply chain). Management of the supply chain is concerned with cooperation among an organization, its multitier suppliers, distributors, and customers in the area of inventory management, order fulfillment, shipment, just-in-time manufacturing, financial settlement, transportation and logistics, and sales support to compress the time between each stage of the chain and to minimize costs associated with the chain through sharing/exchanging data, information, and knowledge.

The key to orchestrating a wide range of activities in the management of the global supply chain is to streamline business processes in a seamless manner. In doing so, the key ingredient is the seamless flow of structured/unstructured information among the organizations in the supply chains through the Internet, intranets, and extranets. For example, customer demand forecasts by retailers often need an adjustment based on the viewpoints of retailers and manufacturers. Extranets facilitate the process of the adjustments by allowing smooth and secured exchange of data/information as shown in the case of Warner- Lambert’s Collaborative Forecasting and Replenishment system. Extranetsbased IODSSs can also be used to keep track of inventory flow information available at all points of the supply chain. Furthermore, IODSSs can be used to proactively feed forward the actual/forecasted customer demand to all suppliers and manufacturers in the chain to minimize the inventory costs (e.g., the Heineken Operational Planning System).

The development of extranets has allowed many organizations to effectively manage the industry’s supply chain by forming industry business to business (B2B) intermediaries. The B2B intermediary is an intermediate agency between suppliers and customers to streamline business processes, enhance productivity, and reduce costs. It offers (1) a comprehensive, one-stop e-marketplace of hundreds of thousands of products; (2) personalized access to the e-marketplace to find and order products from the most trusted suppliers through powerful search engines; (3) analysis and comparison of product and pricing information, and purchase from the trusted suppliers; (5) electronic procurement to support business workflow, and controls through the easy-to-use interface.

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