The analytic network process for managing inter-enterprise collaboration: A case study in a collaborative enterprise network

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<ul><li><p>ngn</p><p>drsine</p><p>ioniveeyr-eora</p><p>(ANP) to identify and measure, under an integrated approach, both factors and inter-enterprise perfor-mance considering their reciprocal impact. With this innovative approach, enterprises will obtain</p><p>one ofket reqchaincreate</p><p>enterprise performance, which can be measured, and therefore,managed through performance measurement elements (objec-tives, performance indicators, etc.). In these contexts, it is impor-tant to dene inter-enterprise performance elements in order to</p><p>Despite the benets of collaboration, there are many factorsthat act as barriers to effective collaboration (Fawcett et al.,2008): lack of top management support, cross-functional conicts,lack of trust, etc. In fact, many collaborative initiatives that initiallywere developed to improve the competitiveness of the enterprises,fail due to these factors (Bititci et al., 2007; Kampstra, Ashayeri, &amp;Gattorna, 2006; Sabath &amp; Fontanella, 2002). For that reason, it isimportant to manage those factors as they impact on the resultingperformance. In addition, the achievement or not achievement ofthe performance element targets impact on the factors, conguringa system of reciprocal inuences between factors and performance</p><p> Corresponding author. Address: Department of Business Organization, Caminode Vera s/n, Building 7D, Universidad Politcnica de Valencia, 46022 Valencia,Spain. Tel.: +34 963877007x76888; fax: +34 963877689.</p><p>E-mail addresses: mverdecho@omp.upv.es (M.-J. Verdecho), jalfaro@omp.upv.es(J.-J. Alfaro-Saiz), raurodro@upvnet.upv.es (R. Rodrguez-Rodrguez), aortiz@omp.</p><p>Expert Systems with Applications 39 (2012) 626637</p><p>Contents lists availab</p><p>Expert Systems w</p><p>.eupv.es (A. Ortiz-Bas).and higher prots than can be achieved by acting alone. These com-panies are actively working together towards common objectivesand share information, knowledge, risks and prots (Mentzer,2001). Enterprises that are collaborating look for improving theirperformance in different aspects such as increased inventory turn-over, increased revenues, cost reductions, product availability, andeconomic value added (Fawcett, Magnan, &amp; McCarter, 2008).</p><p>However, enterprises that desire to collaborate or are collabo-rating often do not establish efcient mechanisms to manage theperformance of the enterprise association, called global or inter-</p><p>der various perspectives or dimensions so that they provide a rel-evant overview of their performance status. One of the mostimportant performance frameworks developed in the academic lit-erature and business applications is the balanced scorecard (BSC)by Kaplan and Norton (1992). In fact, the BSC, developed initiallyfor managing performance of enterprises, has been extended bydifferent authors for inter-enterprise performance managementsuch as the works by Brewer and Speh (2000), Bititci et al.(2005), Folan and Browne (2005) or Alfaro, Ortiz and Rodrguez(2007).1. Introduction</p><p>Enterprise collaboration has beenmodels to compete and adapt to marand Sridharan (2002) dene supplymore companies working together to0957-4174/$ - see front matter 2011 Elsevier Ltd. Adoi:10.1016/j.eswa.2011.07.054signicant information for the decision-making process regarding which are the factors and inter-enterprise performance elements that generate a higher impact and therefore have a high priority withinthe specic collaborative relationship. Thus, enterprises can focus their efforts on improving those mostimportant factors and performance elements, and consequently, enhancing their competitiveness.</p><p> 2011 Elsevier Ltd. All rights reserved.</p><p>the most used businessuirements. Simatupangcollaboration as two ora competitive advantage</p><p>lead the activities of all the members towards the achievementof the commonly agreed objectives (Alfaro, Rodrguez, Verdecho,&amp; Ortiz, 2009; Bititci, Mendibil, Martinez, &amp; Albores, 2005; Verd-echo, Alfaro, &amp; Rodriguez-Rodriguez, 2009). Thus, it is importantfor those enterprises to dene and use a structured performancemeasurement framework that allows managing performance un-Balanced scorecardenterprise performance. This paper provides a methodology based on the analytic network processThe analytic network process for managiA case study in a collaborative enterprise</p><p>Mara-Jos Verdecho , Juan-Jos Alfaro-Saiz, Ral RoResearch Centre on Production Management and Engineering (CIGIP), Department of BuCamino de Vera s/n, 46022 Valencia, Spain</p><p>a r t i c l e i n f o</p><p>Keywords:Analytic network processCollaborationPerformance managementEnterprise network</p><p>a b s t r a c t</p><p>In the last years, collaboratmeans to remain competitbut, in real assessments, thenterprise association/intebarriers to effective collab</p><p>journal homepage: wwwll rights reserved.inter-enterprise collaboration:etwork</p><p>guez-Rodrguez, Angel Ortiz-Basss Organization, Universitat Politcnica de Valncia,</p><p>among enterprises has gained attention in the business environment as a. Enterprises that are collaborating look for improving their performanceoften do not establish efcient frameworks to structure and manage thenterprise performance. In addition, there are many factors that act astion and have to be also properly managed as they impact on the inter-</p><p>le at ScienceDirect</p><p>ith Applications</p><p>lsevier .com/locate /eswa</p></li><li><p>elements. For example, the achievement of one nancial objective,e.g. increase protability, impacts on trust, one of the most rele-vant factors widely analyzed in the literature. At the same time,trust among members impacts on increasing protability, andthus, a reciprocal relationship between trust and increasing prot-ability objective is established. On the other hand, both factors andinter-enterprise performance elements are linked among them-selves at the internal level. Therefore, it is needed to develop a pro-posal that identies and measures the factors and inter-enterpriseperformance elements under an integrated manner and make ex-plicit the overall real inuences that exist within the system so thataccurate and signicant results are obtained. This proposal shouldaddress some questions in order to manage effectively collabora-</p><p>to a case study is exposed. Finally, conclusions and research impli-cations are presented.</p><p>2. Literature review</p><p>2.1. Relevant factors of collaborative relationships</p><p>There are numerous works within the literature that deal withidentifying main factors of inter-enterprise relationships. Some ofthese works present classications of inter-enterprise environ-ments according to the level of maturity reached in different as-pects of their relationships, i.e. they present supply chain</p><p>Refe</p><p>Spek(200(200MohandMatopoulos, Vlachopoulou, Manthou, and Manos (2007)BoddBurg(200Moh</p><p>M.-J. Verdecho et al. / Expert Systems with Applications 39 (2012) 626637 627tive relationships (Busi &amp; Bititci, 2006; Simatupang &amp; Sridharan,2005): What are the relevant factors of collaborative relationships?How can these factors be associated to a performance measure-ment framework? How are these factors and performanceelements linked together? How should both factors and perfor-mance elements be measured? etc.</p><p>From a methodological point of view, it is important to select anadequate method to solve this issue. Suwignjo, Bititci, and Carrie(2000) suggest that integrating the multidimensional effects of fac-tors on performance into a single unit of measurement can only bedone through subjective, individual or group judgment. An exam-ple of this fact is the valuation of the trade-off between trust andperformance. There are not measures that can objectively dealwith this issue. For that reason, subjective measurement is widelyaccepted in Multi-Criteria Decision Analysis (MCDA) to deal withmulti-criteria problems (Suwignjo et al., 2000). MCDA comprisesa large variety of methods. One of the most extensively methodused is ANP introduced by Saaty (1996). There are three main rea-sons that suggest using ANP to model and solve the problem of thispaper. First, ANP allows modeling complex problems with a net-work structure integrating interdependences and feedback amongelements. Second, ANP is adequate to solve problems with bothqualitative and quantitative factors (Peniwati, 2007). This is impor-tant as many of the collaboration factors are qualitative such ascultural factors, and many of the methods are developed solelyfor quantitative measurement. Third, ANP has been used ingroup-decision problems (Erdogmus, Kapanoglu, &amp; Ko, 2005; Levy&amp; Taji, 2007), which is the case of a collaborative relationship.</p><p>The aim of this paper is to provide a methodology based on ANPthat aids to make decisions to enterprises that collaborate by iden-tifying and measuring, under an integrated approach, both factorsand inter-enterprise performance elements considering their reci-procal and internal relationships. The structure of this paper is asfollows. Firstly, a literature review regarding relevant factors ofcollaborative relationships and the application of ANP for perfor-mance measurement are analyzed. Secondly, the methodologydeveloped is described. Then, the application of the methodology</p><p>Table 1Summary of relevant factors on collaborative relationships.</p><p>Factors</p><p>Strategic factors Joint vision, design of the inter-enterprise network,equity, top management support</p><p>Business process andinfrastructurefactors</p><p>Process alignment, IS/ICTs interoperability,complementary skills, coordination between activities</p><p>Organizationalstructure factors</p><p>Collaboration leadership, compatibility ofmanagement styles, joint decision-making,multidisciplinary teams</p><p>Cultural factors Trust, commitment, cooperation, information shared,</p><p>conict resolution management (200</p><p>Giany et al., 2000, Barratt (2004), Lockamy and McCormack (2004), Min et al. (2005),ess and Singh (2006), Camarinha-Matos, Afsarmanesh, Galeano, and Molina9) and Wu et al., 2009r and Spekman (1996), Boddy et al. (2000), Barratt (2004), Handeld and Bechtelpartnerships. Mohr and Spekman (1996) identify, from an empiri-cal study, the factors that contribute to successful partnerships:relationship attributes (coordination, commitment, and trust),communication behaviour and joint problem solving techniques.Boddy, Macbeth, and Wagner (2000) identify seven factors forpartnering contexts: business processes, people, trust, technology,structure, nancial resources and culture. Table 1 presents a sum-mary of relevant factors on collaborative relationships. The classi-cation is structured by adapting the main blocks of the MIT90framework (Scott-Morton, 1991). Despite the MIT90 frameworkwas developed for individual enterprise contexts, if we conceptual-ize a collaborative inter-enterprise context as an organization thatpursues common objectives, its application is justied.</p><p>2.2. ANP for performance measurement</p><p>ANP has been recently applied for performance measurementapplications at both intra-enterprise and inter-enterprise levels.Talluri and Sarkis (2002) develop an ANP model with traditionalquality control methods in manufacturing. The approach consistsin a system to monitor the performance of a manufacturing enter-prise at the strategic, tactical and operational levels. Yurdakul(2003) present an ANP model to select those areas of higher suc-cess (priority areas) within a company, depending on the compet-itive strategy (innovation, customization, cost reduction, etc.).</p><p>rences</p><p>man, Kamauff, and Myhr (1998), Boddy et al. (2000), Sabath and Fontanella2), Barratt (2004), Chopra and Meindl (2004, chap. 1), Simatupang and Sridharan5) and Wu et al. (2009)r and Spekman (1996), Barratt (2004), Lockamy and McCormack (2004), LejeuneYakova (2005), Min et al. (2005), Simatupang and Sridharan (2005) andevolutionary models (from lower to higher level of collaboration).Sabath and Fontanella (2002) present a supply chain classicationdepending on two main aspects: strategic value of the relationshipand technology used to support it. From a process perspective,Lockamy and McCormack (2004) develop a model to classify sup-ply chains based on the maturity of their processes. Each level ischaracterized according to different factors such as alignment ofprocesses, organizational structure, cooperation, process perfor-mance and trust. Lejeune and Yakova (2005) expose a typologyfor supply chain characterization related to social relationshipstheory and the interdependence concept.</p><p>Other works aim at identifying the main factors that impact on4), Lam and Chin (2005), Lejeune and Yakova (2005), Burgess and Singh (2006),nakis (2007), Matopoulos et al. (2007) and Wu et al. (2009)</p></li><li><p>Other applications pursue to select suppliers to form strategic alli-ances (Chen, Lee, &amp; Wu, 2008; Kirytopoulos, Leopoulos, &amp; Voulgar-idou, 2008; Wu, Shih, &amp; Chan, 2009). Yuksel and Dagdeviren (2010)present an ANP model for a BSC and an application to a manufac-turing rm. However, few of these works consider relevant collab-orative factors within their models, e.g. Wu et al. (2009) considerthe culture and compatibility among management styles factors.However, there is not a model developed to manage, under an inte-grated and structured approach, both factors and performance ele-ments considering the relationships between them. In addition, theworks that use the BSC for managing performance are only appliedat the individual enterprise level (intra-enterprise level). Therefore,it is possible to afrm that there is not yet a model for inter-enter-prise performance management that allows managing perfor-mance under a structured performance measurement framework.For these reasons, this paper proposes a novel approach to ll thisresearch gap. Thus, enterprises will obtain relevant information foraiding the decision-making process that identies the factors and</p><p>inter-enterprise performance elements that generate a higher im-pact, and therefore, have a high priority for their competitiveness.</p><p>3. The proposed methodology</p><p>Fig. 1 shows the main elements of the methodological approach.The purpose of the methodology is to identify and measure rele-vant collaborative factors and inter-enterprise performance ele-ments considering their reciprocal impact as well as their innerdependences. For building and solving this problem, the ANPmethod will be used. The proposed methodology is composed ofthe following ve steps (Fig. 2):</p><p>Step 1. Characterize the collaborative context. This step aims atobtaining a general overview of the inter-enterprise envi-ronment and, specically, the deep and width of the col-laboration relationships among their members.</p><p>Fig. 1. Main elements of the methodology.</p><p>628 M.-J. Verdecho et al. / Expert Systems with Applications 39 (2012) 626637Fig. 2. Steps of the methodology.</p></li><li><p>Step 2. Establishment of the group of experts. The group ofexperts should include people within three types of skills:strategic, process and consultant. Strategic and processproles are people from all the enterprises that are collab-orating and have expertise on strategic and process issues.The consultant can be either internal or external to thecollaborative enterprises an...</p></li></ul>