Researchers at City University of Hong Kong have devised an open Web-based framework that enables individual entities in a supply chain network to integrate into an efficient and effective whole.
The objective of the research project is to help all supply chain members to collaborate on sharing business information so they can respond rapidly to agile markets demands.
Principal Investigator Dr Richard Y K Fung says that because links in a typical supply chain can be geographically dispersed, the process of co-ordination and integration can be complex.
“As well as that, companies still rely on formal means of contact like the telephone and fax machine to communicate between each other,” Dr Fung added.
His EI-SC (Enterprise Integration-Supply Chain) system seeks to partner supply chain members into a “virtual enterprise.”
For example, he said, one organisation in a supply chain may be responsible for design, while other partners take on separate functions such as engineering, marketing, production, or distribution.
“Enterprise integration brings together the different functions and differentiates the resulting virtual enterprise from traditional organisations by enabling it to produce higher quality products at lower costs, and with shorter lead times,” said Dr Fung.
As well as building the theory and methodology for the EI-SC system, researchers devised management and planning functions that can rapidly plan actions to meet specific customer requirements. Testing of a pilot system was carried out using both simulated data, and actual data from Hong Kong companies in the toy manufacturing and healthcare industries.
Among issues considered was how to reduce human error in electronic data interchange (EDI).
“It’s important that all members of the supply chain talk the same language,” said Dr Fung. “If they don’t, they can’t readily share knowledge. Ways that knowledge is defined can also be imprecise, or ambiguous and inconsistent.” A set of axioms was applied to interpret commonly-used terminology.
Dr Fung said: “Traditional supply chain management tended to focus on the efficiencies of resources within a single vertically integrated company.
“Nowadays, the vertically integrated approach is being replaced by long-term partnerships between enterprises forming an alliance and a virtual organisation among themselves.
“With systems integration and EI, a rigid inward-looking company can be transformed into a flexible outward-looking business partner in an overall network. Partners can also be located anywhere in the world.”

Principal Investigator
Dr Richard Y K Fung : meykfung@cityu.edu.hk