brokering the customer

8/6/2019 Brokering the Customer

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BROKERING THE CUSTOMER-SUPPLIER PARTNERSHIP INPRODUCT DESIGN AND REALIZATION OVER THE WORLD

WIDE WEB

GQ Huang, and KL Mak

Department of Industrial and Manufacturing Systems Engineering,

University of Hong Kong, Pokfulam Road, Hong Kong.

ABSTRACT

This research is concerned with the application of the World Wide Web (WWW or web)technology to facilitate the early supplier involvement (ESI) in new product development(NPD). The paper focuses on two parts of the resulting web-based system. The first partis the Bid Explorer underpinned by a bid model which is based on design specification.The bid model consists of inquiries which in turn have values of different types. Inquiriesare represented in a hierarchical tree. The bid model is collaboratively established by, andthereafter commonly shared between, the customer and all the interested suppliers. Fromthe point of view of the customer, the inquiries are their requirements. In contrast, fromthe suppliers viewpoint the inquiries are their capabilities. The second part of the systemis the Partnership Explorer which is underpinned by a partnership model. This

partnership model uses four types of numeric partnership indices, namely satisfactionindex (SI), flexibility index (FI), risk index (RI), and confidence index (CI). Satisfactionindex is based on the overlap between the customer requirements and supplier capabilities. Flexibility index is based on the surplus of the supplier capabilities inrelation to the customer requirements. Risk index is evaluated through the shortage of thesupplier capabilities with reference to the customer requirements. Confidence index is

based on the performance records of a supplier in the past.Keywords : Supply Chain, Early Supplier Involvement, New Product Development,World Wide Web.

1. 1. INTRODUCTION

A supply chain (SC) may be defined as an integrated process wherein a number of various business entities (i.e. suppliers, manufacturers, distributors, retailers, andcustomers) work together in an effort to: (1) acquire raw materials, (2) convert these rawmaterials into specified final products, and (3) deliver these final products to relevant

parties (Beamon, 1998). Once a supplier becomes part of well-managed and establishedsupply chain, it will have a lasting effect on the competitiveness of the entire supplychain.


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Supply chain management (SCM) has recently attracted significant interests from bothresearchers and practitioners in several directions. At the strategic levels, larger companies are increasingly concentrating on core activities and contracting out or outsourcing other functions to the network of suppliers (Roy, 1996). They have reducedtheir supply bases, and increased the reliance on the remaining suppliers and tried to

develop closer and long-term relationships in the search for competitive advantage(Lamming, 1996). Furthermore, in order to capture the full complexity of the process of supply in a more holistic and strategic view, Lamming (1999) presents the use of the term'supply network' to define the process of supply which involves complex non-linear linksamong inter-connected supply entities. Given above complexity of supply network, earlyinvolvement of suppliers in New Product Development (NPD) is not only imperative butalso a big challenge (Dowlatshahi, 1997; Twigg, 1998). We were compelled to introspectone of the most fundamental responsibilities of supplier management - supplier selection.

The importance of supplier selection comes from the fact that it commits resourceswhile simultaneously impacting not only such activities as inventory management,

production planning and control, cash flow requirements, and product quality, but also

product design and development (Helper, 1995). The literature in vendor or supplier selection continues to grow rapidly in areas such as vendor or supplier attributes and performance metrics (Verma, 1998; Choi, 1996), and decision models (Holt, 1998;Ghodsypour, 1998; Vokurka, 1996).

Traditional supplier selection methodologies suffer from a number of limitations. Aset of candidate suppliers is assumed to have already been short-listed and they are thensubjected to detailed evaluation using their attributes, chosen performance metrics, andgiven decision models. From the literature, supplier attributes do not seem to includetheir technical capabilities that should be used in initial selection, especially if theselection takes place early in product development process. To enable early involvementof suppliers in product development, technological requirements/capabilities must bemeasured and compared in detail prior to or within supplier selection.

Supply development is normally based on competitive tender/bidding despite the factthat partnership development is advocated to increase purchasing efficiency. Competitivetender/bidding is considered adversarial, undermining collaborative partnerships or relationships. The focus is usually on price as the key element. Yet the tendering processis expensive in time and money for the vendor. In industrial sectors such as electronicstendering is usually performed for a given set of criteria in a relatively short space of time.

Much of the previous research in the area of supplier selection and supplier evaluationemphasizes conceptual and empirical decision support models, mainly for purchasingmanagers. They may suffer from one or more shortcomings such as mathematically toocomplex, too subjective, requiring too many supporting data, etc (Holt, 1998). What

practitioners need is a methodology simple to use and understand, and yet producereasonably accurate results.

With promises and potentials, Information Technology (IT) and Information Systems(IS) are increasingly used in supply chain management. Early applications have beenfocused on implementing sophisticated mathematical decision models for supplier selection. OSPAM (Optimal Selection of Partners in Agile Manufacturing) was probablyone of the first attempts to apply extensively IT/IS in general and the Internet in


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particular in supplier selection (Minis, 1995). Vanwelkenhuysen (1998) has described aTender Support Expert System for industrial centrifugal pumps. The system assists salesengineers to quickly generate and explore technically valid pump configurations as aresponse to customer requirements. Kroemker et al (1997) presented a concept of simultaneous bid preparation and implemented a prototype infrastructure to support

interdisciplinary co-operative bid preparation over a distributed heterogeneous systemenvironment. These early attempts are inadequate to address the subject matter ESI in NPD set out for the research reported in this paper.

Supply chain analysis and modelling have focused on the entire chain (Beamon, 1998)or individual member companies along different levels of the chain (Choi et al, 1996).Little work has been done in analysing and modelling the interfaces between thecustomers and suppliers. Supplier selection has been extensively studied in the literature.However, most work failed to model the interfaces between the customers and suppliers.It is usually assumed that the customer has a fairly clear description of its requirementsand that there are several suppliers who are willing and able to provide the services, withtheir capabilities clearly described.

Despite all of the recent developments, only 36% of the organisations had formal procedures in place for the management of supplier information, according to a recentUK survey (Boston et al, 1998). Over 60% of those companies that maintained supplier literature within a global library, only classified their supplier literature according to itsformat (catalogues, handbooks, data sheets) or the supplier names. Therefore, thisrequires an engineering team to have knowledge of what the supplier produces in order for the classification system to be of value.

Having recognised some of the limitations in SCM research and practice, the researchreported in this paper is aimed at proposing a methodology, named WeBid for theconvenience of reference, in order to overcome these limitations. The work has extendedto a proof-of-the-concept implementation of the methodology on the World Wide Web(WWW or web). The focus is not on modelling the entire supply chain, nor on a

particular company in the chain, but on the interface between the suppliers and thecustomers. WeBid advocates a collaborative approach in negotiating a contract andestablishing longer term relationships. A common model is shared by both customers andsuppliers to present technical details of their requirements and/or supplier capabilities. Inaddition, typical performance measures are incorporated for supplier/customer selection.WeBid encourages early contacts between customers and suppliers through informalinquiries. WeBid provides opportunities to develop long-term partnerships based on thetrusts developed through competitive bidding. Finally, WeBid is based on an intuitive butrigorous decision support model for evaluating the potentials for collaboration betweenthe customer and the supplier.

Supplier involvement may take several forms, for example by sharing tasks andinformation during the product development and realization process. Before the questionhow the supplier is involved in NPD can be examined, it is first of all necessary to focuson determining which supplier should be involved. The WeBid research project addressestwo research questions: which supplier should be involved and how the chosen supplier should be involved. This paper focuses on the first question while the second questionwill be addressed separately in future work. Section 2 presents an overview of the WeBid


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methodology and system. Sections 3 and 4 present the bid model (Bid Explorer) and the partnership model (Partnership Explorer) respectively.

2. 2. THE WeBid FRAMEWORK

The working scenario identified for this research is described as follows. A companyinitiates a new product development project. At certain stages of the development

process, the company will have to consult its potential suppliers of raw materials, parts/components, tooling, equipment/machinery, and other types of consumables. Suchconsultation may take place as early as the design specification stage or as late as actual

purchasing is due. Advance consultation with and participation of suppliers are termed asearly supplier involvement. It has been found from the contemporary research in thefields of concurrent engineering and supply chain management that significant benefitscan be achieved if suppliers are involved in new product development process as early as

possible. However, recent investigation in manufacturing industries has also revealed thatthis approach is not widely practised in industries and its implementation has been a greatchallenge to researchers and practitioners.

1. 2.1. WeBid Overview

The aim of the research reported here is to develop an overall methodology for enabling better supplier involvement in new product development process and to demonstrate theframework through a prototype web-based platform on the Internet/intranets using theweb technology. Four focus areas have been identified. They are (1) To develop a

product-oriented supply chain model that is consistent with the new product development process; (2) To develop a mechanism for the customer to invite and potential suppliers tosubmit bids for manufacturing specific product components; (3) To develop a rigorous

but pragmatic supplier selection methodology; and (4) To develop a mechanism for facilitating information sharing between the customer and suppliers.


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Figure 1 WeBid as an interface between the customer and supplier.

An initial round of investigation has been completed. A prototype system calledWeBid has been developed. Figure 1 shows an overview of the WeBid system. The left-hand side of the figure shows main stages of the customers new product development

process. The right-hand side presents main activities of the suppliers bid preparation process. As can be seen from the diagram, WeBid is primarily an interface between thesetwo processes.

2. 2.2. WeBid Components

The middle of Figure 1 shows the four main modules of WeBid. These four modules alsocorrespond to the four main activities of the general procedure of ESI proposed by Fineand Whitney (1996). They are summarised briefly as follows:

The Supply Explorer . The Supply Explorer is the main and start-up component of WeBid. Other facilities are accessed through this module. The methodologyunderlying this Supply Explorer is a product-oriented supply chain model. Moredetailed discussion is given elsewhere (Huang and Mak, 2000).

The Bid Explorer . The Bid Explorer enables the customer to define their requirements and potential suppliers to specify their supply capabilities. Themethodology underlying this Bid Explorer is a hierarchical bid model shared by


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both the customer and suppliers. More detailed discussion is given in a later section.

The Partnership Explorer . The Partnership Explorer enables the customer toevaluate and select potential suppliers based on their supply capabilities against thecustomer requirements, that is the question which supplier should not involved in

NPD. It uses a sophisticated, yet pragmatic and intuitive, quantitative partnershipmodel. This novel model consists of four different types of numerical indices,namely, satisfaction index, flexibility index, risk index, and confidence index. Moredetailed discussion is given in a later section.

The Share Explorer . The Share Explorer extends the scope of the system for thecustomer and suppliers to share not only design information but also design tasksafter they reach an agreement on a project, that is the question how should thechosen supplier be involved in NPD. This is an area deserving substantial amountof investigation in the near future. Because of the limitation of the space here, thedesign and development this Share Explorer will not be discussed here.

In addition to the above main modules, WeBid provides a set of general utilityfacilities, for example for registering to WeBid, searching and querying partners, browsing the "bidding" results, defining inquiry template, etc. Administrative facilitiesmust be provided for the WeBid service provider to maintain the proper services such asmanaging the databases and web sites. Registration facilities are provided for the users toenter their details such as company name, address, telephone, username, password, etc.Login facilities are provided for the user to obtain certain authorisation and select a

product development project from a list.

3. 2.3. Brokering Customer-Supplier Partnership

WeBid is a partnership broker for two types of user, namely, the customer user and

supplier users. As a customer, the user is authorised to view, but not to manipulate, theinformation of all the suppliers. The customer user can define a project for a new product.The customer user can select one of his projects/products to create or modify the producthierarchy in terms of a tree structure in each stage of product development fromconceptual design to production design. For each item of the product tree, the BidExplorer can be invoked to prepare design specifications. The customer may invite bidsfrom relevant suppliers. After the deadline for submitting bids, the customer can calculateand evaluate partnership indices for each submitted supplier by calling the PartnershipExplorer, and then select the most promising supplier or suppliers with the most

promising Partnership Indices to award the contract for making the item.As a supplier, the user is limited to view, but not manipulate the customer information.

The user can only manipulate its own information but not other suppliers information.The user can see where he or she has been invited to, or plans to participate in the SupplyExplorer. Once a decision is made, the user may launch the Bid Explorer to discuss thecomponent design specifications with the customer and enter its companysmanufacturing capabilities in order to submit a bid for the project.

3. 3. INVITING AND SUBMITTING BIDS


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In this research, a common bid model is shared between the customer and suppliers. Thecustomer invites the bid by publishing its requirements, and a supplier submits a bid by

publishing its capabilities. The process of inviting and submitting bids involves two mainstages. One is to build up the bid model. The other is to use the bid model for bidsubmission and invitation. These two main stages are discussed in this section.

1. 3.1. The Bid Model

Preparation and clarification of design specifications is an early activity in the new product development/design process. This is also an initial entry point for supplier involvement. With a set of design specifications prepared, the customer may start inviting

bids from potential suppliers who are also able to prepare and submit a bid to thecustomer. For this straightforward reason, the research advocates the use of a model of design specifications as the common basis of the customer-supplier interface. That is, themodel of design specifications will be adopted as the bid model shared by both thecustomer and suppliers.

Design specifications are formal definition of customer requirements. Therefore, the

model of customer requirements, that has been proposed in our previous work (Lee,Huang and Mak, 1999), can be extended and modified here to form the model for representing design specifications. Before further detailed discussions, it is necessarynow to clarify a few terms used in this research. As implied previously, the terms of contract model, bid model and design specification model are different terms of the same concept when used in different contexts. When discussing product developmentand design, the term design specification model is preferred. When discussing bidsubmission and invitation, then the term bid model is used. When discussing thecustomer-supplier contract, then the term contract model is used. However, they areused interchangeably in this research from time to time. The items included in the bid /contract model are also called inquiry items or inquiries.

Because the bid model has been implemented in a prototype system, it is easier to usethe sample screen printouts from the computer system to explain this model. Figure 3shows the sample screen of the Bid Explorer whose user interface also reflects the logicof the bid model.

The main facility of this model is a hierarchical tree structure that is used for organising the specification items (also known as inquiries), as shown in the left-handside of Figure 2. Various facilities are provided for users to build and elaborate designspecifications. Users can list, add, edit, and delete, copy and move inquiries.


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(a) Defining the bid inquiries (b) Defining the values

Figure 2 User interface of the Bid Explorer.

Inquiries may take different types of values. The type of an inquiry must be definedwhen it is added to the bid model. In Figure 2 (a), option buttons are provided for this

purpose in addition to the general description and explanation of the inquiry. The four option buttons correspond to the following four types of inquiry values:

Some inquiries are of the type with continuous values. For example, when acustomer requires that the tolerance of a dimension should be within Specification

tolerance interval (+0.09 ~ -0.07) from09.007.020

+ , these kinds of inquiries can be

satisfied if the supplier's process capability can has a natural tolerance interval

(+0.03 ~ -0.02) from03.002.020

+ .

Some inquiries are of the Boolean type, i.e. Yes or No. An example of suchinquiries is The company is ISO 9001 certified and the answer to this inquirywould be either yes or no.

Some inquiries are of the optional type with discrete values. For example, thecustomer requires several colours, red, yellow and blue, and the supplier is capableof providing green, red, yellow, blue and white.

Some inquiries are qualitative and one of quantifying methods is to use subjectiveratings to give a score. An example of such inquiries is "After sales customer service" and the answer to this inquiry would be certain percent from zero to one


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hundred percent. It should be declared that the score type could be converted to therange type when performing partnership evaluation.

The process of preparing the bid model is the process of making inquiries between thecustomer and suppliers. This is also the process by which they negotiate their terms of

collaboration. That is, once the bid model is prepared and constructed, it provides a basisfor formulating the contract between the customer and supplier. Therefore, the bid modelcan also be loosely considered as a contract model, and the Bid Explorer as a ContractExplorer.

One of the most important aspects of the above bid model preparation process is that itis done by the customer in collaboration with interested suppliers. The supplier

participation in bid preparation can thus be regarded as their contributions to formulatingdesign specifications. In this sense, suppliers are involved early in new productdevelopment process.

2. 3.2. Bid Invitation and Submission

Once the customer and supplier have agreed upon the general items (inquiries) in the bidmodel, they may start defining their requirements and capabilities quantitatively,respectively. The process of quantifying inquiries by the customer is called inviting

bids and the quantified inquiries are called customer requirements. Similarly, the process of quantifying inquiries by the supplier is called submitting bids and thequantified inquiries are called supplier capabilities. Both processes can be called bidding.The procedures of both inviting and submitting bids are the same. For each inquiry in the

bid model, the value or value range is specified using the facilities provided in the BidExplorer shown in Figure 2 (b). The process repeats until all the inquiries are considered.

For the Boolean type, it is straightforward to define, simply yes or no. For the optionaltype, a list of items must be specified. For the score type, a score from 0 to 100 can be

specified. For the continuous type, it is necessary to specify a range by giving a lower value and an upper value respectively. The range value is somewhat complex to define.There are two kinds of trend for a customer to compare the range of its requirements withthe range of its supplier's capabilities. One tendency is that the larger the supplier's valuerange, the better; however, the other tendency is that the smaller the supplier's valuerange, the better.

4. 4. EVALUATING PARTNERSHIP INDICES

This research has proposed a novel model for modelling customer-supplier partnershipespecially suitable for supporting early supplier involvement (ESI) in new productdevelopment (NPD). This partnership model is used to implement the PartnershipExplorer.

1. 4.1. The Partnership Model

The partnership model proposed here includes the following four types of distinctiveindex:


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Legends:

Boolean (Yes/No) type

Option type

The larger the better type

The smaller the better type

Customer requirement

Supplier capability

Intersection between customer requirement and supplier capability

Figure 3 The Partnership Explorer.

Table 1 Formulas to Calculate Partnership Indices

Value Type SI FI RI

Range s R , the larger, the better c

c s

R

R R s

c s s

R

R R R c

c sc

R

R R R

s R , the smaller, the better s

c s

R

R R c

c sc

R

R R R s

c s s

R

R R R

Optionc

c s

R

R R s

c s s

R

R R R c

c sc

R

R R R


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Boolean=

0

if 1 c s R R0

0

if 1c s

R R

Overall

N

SI

OSI

N

i

i== 1

N

FI

OFI

N

i

i== 1

N

RI

ORI

N

i

i== 1

Notes on set operators: A B = Intersection of sets A and B.A-B = Difference between set A and set B.

Multiple inquiries are involved in the bid model. Therefore, the three types of partnership indices must be evaluated for all the inquiries one by one. Table 1 shows theformulas for calculating these three indices with respect to different kinds of value typesand value tendency of range values.

In Table 1, s R stands for the set of supplier capability for a certain inquiry. c R stands

for the set of customer requirement for a certain inquiry. OSI stands for the OverallSatisfaction Index. OFI stands for the Overall Flexibility Index. ORI stands for the

Overall Risk Index. N stands for the total number of inquiries evaluated. iSI

is the SI

for i th inquiry item, i FI

is the FI for i th inquiry item, and i RI

is the RI for i thinquiry item. Because of the three types of customer requirements (or supplier

capabilities), s R and c R can be defined as two sets with either continuous value or discrete value. An illustrative example of using these equations is given in Figure 3.

Different types of customer requirements (or supplier capabilities), indices must beevaluated differently. As far as the optional value is concerned, assume that the customer

requires several colours, e.g. red, yellow and blue. The supplier is capable of providinggreen, red, yellow, blue and white. Thus, the supplier can satisfy the customer'srequirement and provide two extra options: green and white. Therefore, this supplier's SI

equals to "1" and FI equals to "4.0

52 =

" and RI equals to "0".As for the Boolean type, let us consider the example inquiry "Is the supplier ISO9000

certified?" The Yes answer to this question indicates that this supplier meets thiscustomer requirement. In this case, the supplier will have a SI of 1, FI of 0, and RI of 0, respectively. Otherwise, the supplier is incapable of meeting this customer requirement. Therefore, this supplier's SI equals to "0" and FI also equals to "0" and RI

equals to "1". It must be pointed out that for the Boolean type, no flexibility exists,viz. FI always equals to "0".

As mentioned before, there are two different tendencies of the range value. Therefore,the SI calculation can be further divided into two situations. Firstly, consider an exampleof the larger the better inquiry. When a customer requires that the range of a machiningdimension should be within 20~40mm, the supplier has a machine tool that is capable of machining dimensions between 1090 mm. At the same time, the supplier does have theflexibility to cope with the requirement change of the customer because the upper


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dimension specification of the customer can vary from 40mm to 90mm and the lower dimension specification can vary from 10mm to 20mm. In this example, no risk exists for this inquiry item. Therefore, for this inquiry, the supplier's SI equals to "1" and FI equals to "0.75" and RI equals to "0".

Secondly, let us consider the smaller the better inquiry. Assume a customer requires

that the tolerance of a dimension should be within the tolerance interval (+0.09 ~ -0.07),say

09.007.020

+ . The supplier is capable if the supplier's process capability can has a natural

tolerance interval (+0.03 ~ -0.02) from03.002.020

+ . The supplier also has the flexibility as the

upper tolerance specification of the customer can vary from +0.09 to +0.03 and the lower tolerance specification can vary from -0.07 to -0.02. In this example, no risk exists for this inquiry item. Therefore, the supplier's SI equals to "1" and FI equals to "0.75" and RI equals to "0".

3. 4.3. Overall Partnership Indices

For each bid inquiry, partnership indices are individually evaluated. When all theinquiries are considered, overall indices must be evaluated. Table 1 presents a simplemethod of calculating the Overall Satisfaction Index ( OSI ), Overall Flexibility Index (OFI ), and Overall Risk Index ( ORI ) from individual sSI ' , s FI ' , and s RI ' ,respectively. The method simply calculates the arithmetic averages of individual indicesfor all the bid inquiries. At present, no weighting factors are introduced to rate theindividual importance of different bid inquiries. There is no difficulty at all to introducethis in the methodology and system. The authors are working on more sophisticatedalternative algorithms for evaluating the overall indices based on individual indices.

Overall indices are calculated for all the potential suppliers one by one. Thesesuppliers can be rank-ordered according to the three types of overall indices. Ideally, a

supplier with the highest SI, highest FI, and lowest RI is the best candidate. However, itmay be difficult for one supplier to outperform other suppliers in all these three indices.Therefore, trade-offs are necessary. The analyst must consider other factors in order toreach an optimal selection.

4. 4.4. Uses of Confidence Indices

The concept of confidence index is introduced for two purposes. The confidence indexcan be simply used as weighting factors to calculate the overall values of the other threetypes of indices such as satisfaction, flexibility, and/or risk indices. Alternatively, theoverall confidence index of a supplier provides an indication whether or not it is matureto consider a long-term partnership.

Confidence indices (CIs) are derived from the past records of performancemeasurements of a supplier (or a customer). The entire inquiry model can be used tocalculate sCI ' . However, the customer may not record the supply performance using allthe indicators. This is because excessive bookkeeping may be involved. Instead, only afew key indicators, such as lead times, product costs, defect rates, etc., may be chosen bythe customer to measure and record the supply performance. In this case, sCI ' arederived from this subset of the entire bid model.


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because the second supplier has a higher confidence index than the first supplier.Therefore, the contract should be awarded to the second supplier, rather the first supplier.

5. 5. CONCLUDING DISCUSSIONS

This paper has proposed a methodology and a proof-of-the-concept prototype web-basedsystem for brokering and establishing partnerships between the customer and suppliers innew product development. The methodology builds on a bid model and a partnershipmodel. The bid model is represented as a hierarchical tree whose leaves representcontract inquiries or design specifications and branches represent their categories. The

bid model is associated with individual components in the Bill of Materials of the product. From the point of view of the customer, the contract inquiries are their requirements and from the suppliers viewpoint the inquiries are their capabilities. This

bid model is shared by both the customers and the suppliers throughout the whole processin order to facilitate their collaboration.

The partnership model uses the extent to which both the customer requirements andthe supplier capabilities overlap or mismatch to assess the potential for their futurecollaboration. The customer can use the model to calculate three types of partnership or contract indices, i.e. satisfaction index, flexibility index and risk index, for all the biddingsuppliers. The supplier(s) with the most promising partnership indices are consideredfurther for awarding the contract. In addition, supplier performance can be recorded inthe system database. The difference between the actual performance and contract termscan be converted into what is called confidence indices. Confidence indices can then beincorporated into the partnership indices as weighting factors. When the confidence indexof a supplier is maintained at a high level for a sufficient period of time, a long-term

partnership may be considered with this supplier.The proposed methodology is implemented and demonstrated in a prototype web-

based computer system, named WeBid, on the Internet. WeBid is therefore a web sitethat provides facilities to encourage initial contacts, facilitate preliminary contractnegotiations, and enable contract evaluation. The Bid Explorer provide facilities for thecustomer to prepare design specifications for a component and then proceed to inviting

bids by publishing the specifications to potential suppliers. Suppliers can use the BidExplorer to assist the customer in establishing the design specifications and then prepareand submit their supply capabilities as a bid. The Partnership Explorer assists thecustomer to evaluate all the bidding suppliers automatically and recommend the most

promising candidates.Ideally, both the customer and interested suppliers will follow the same bid model to

define their requirements and capabilities respectively. In practice, they tend to useslightly different subsets of inquiries identified in the bid model. This would complicatethe algorithm used in the Partnership Explorer for evaluating the partnership indices. Thisaspect deserves further investigation.

Another aspect worth attention is the aggregation from individual partnership indicesto overall partnership indices. It may be more efficient and effective to replace the

present simple arithmetic averaging algorithm by a more sophisticated mathematicaltechnique without introducing excessive extra requirement for data collection and

processing. However, a recent case study (Huang and Mak, 2002) has resulted in


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satisfactory decisions compared with the actual decisions. Sophisticated aggregatingalgorithms are introduced only if there is clear evidence of advantages in so doing.

More general issues, although beyond the scope of this research, need to beinvestigated before the WeBid method and system can be truly applied in industries. For example, the security issue is a significant barrier causing fear of introducing and using

web-based decision supports systems on the Internet. The authentic issue, particularlyrelevant to this work, is whether or not the potential suppliers enter the authentic valuesof their capabilities into the WeBid system to participate in the bidding process. Inaddition, whether or not requirements can be clearly established in the early stages of

product design and development is a technical issue. The product design literature hasalways emphasized the importance of establishing and clarifying the requirements as far as possible even at early stages (Pahl and Beitz, 1984).

Finally, a recent case study positively demonstrates the potential of the proposedWeBid methodology and web-based implementation (Huang and Mak, 2002). It remainsa great challenge to incorporate them into, and thus to improve, industrial practices inearly supplier involvement in new product development. It is the authors hope that this

paper stimulates further investigation and debates in this field.

ACKNOWLEDGEMENTS

The authors wish to thank Dr. Jin Huang and Dr. Bing Shen, our post-doctoral researchassociates, for their programming efforts of implementing the fat and thin clientversions of the WeBid system on the Internet. Gratitude is also extended to the HongKong Research Grant Council and the Committee on Research and Conference Grants of the Hong Kong University for the financial supports. The critical but constructivecomments made by the editor and his referees are highly appreciated.

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AUTHOR BIOGRAPHIES


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Dr. George Huang is Associate Professor in the Department of Industrial andManufacturing Systems Engineering, the University of Hong Kong. He obtained his B.Eng.degree in Mechanical Engineering from Southeast University (China), and Ph.D. degree inMechanical Engineering from the University of Wales Cardiff (UK). His main research areasinclude Collaborative Product Commerce, Digital Manufacturing. He has published extensivelyin these topics, including two monographs entitled Cooperating Expert Systems in Mechanical

Design and Internet Applications in Product Design and Manufacturing respectively, and anedited reference book entitled Design for X: Concurrent Engineering Imperatives . Dr. Huang is aChartered Engineer, and a member of IEE, ASME, IIE, and HKIE.

Dr. K.L. Mak is Professor and Head of the Department of Industrial andManufacturing Systems Engineering, the University of Hong Kong. He obtained both his MScdegree in Manufacturing Engineering and PhD degree in Systems Engineering at the Universityof Salford. He has accumulated substantial experience in industry by working in several UK engineering enterprises including the Pilkington Brothers Ltd., the T.S. Harrison and Sons Ltd.,as well as in some enterprises in Hong Kong. Indeed, he has wide exposure to industry, and iswell connected with enterprises in the local and overseas communities. His current researchinterest focuses mainly on Production and Operations Management, and Manufacturing SystemsDesign and Control, and has published extensively in these areas. He also serves on the editorial

boards of a number of journals in engineering.

brokering the customer

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