PRO-VE 10 - Special Panel Session on Next Generation Collaborative Networked Organizations

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Next Generation Collaborative Networked Organizations
2nd Edition -Special Panel Session

2nd Edition
SPECIAL PANEL SESSION ON
Towards the Next Generation Collaborative Networked Organizations:
International Challenges, Trends and Research Opportunities

“Emerging Collaborative Networks in Industry:
Sharing Management Experiences”
Special Session Organizing Committee
David Romero (ITESM, Mexico City), Arturo Molina (ITESM, Mexico City)
Ricardo Rabelo (UFSC, Brazil), Luca Cagnazzo (UNIPG, Italy)

Universidade Università
CNOs
Federal degli
Case Studies
De Santa Studi di
SIG
Catarina Perugia

PRO-VE’10
Saint-Etienne, France, 11-13 October 2010

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Index

• Foreword
– David Romero, Panel Chair
• Aims and Scope
• Presentations:
– Panelist 1: Gruppo Poligrafico Tiberino – Global Network Solutions, Italy
• Lorenzo Tiacci, Luca Cagnazzo
– Panelist 2: Aerospace Enforcement Network, Mexico
• Ricardo Ramírez, David Romero, Arturo Molina
– Panelist 3: VBE for Mould and Die Industries: The NuFerJ Case, Brazil
• Fabiano Baldo, Ricardo Rabelo
– Panelist 4: SADECAL – Supporting e-Business Diffusion in Calabria, Italy
• Antonio Volpentesta, Salvatore Ammirato
• Discussion Questions
• Conclusions
• Acknowledgements
• Event Pictures

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Foreword

After the success of the 1st Special Panel Session on “Next Generation Collaborative
Networked Organizations: International Challenges, Trends & Research Opportunities”,
as part of PRO-VE 2009 Working Conference on Virtual Enterprises; this year for
second time, the special panel session took place as part of PRO-VE 2010 edition,
offering researchers and practitioners a major opportunity to continue discussing on
current industrial practices regarding different emerging and established collaborative
forms in the real world.
The industrial practice case studies presented in this second e-book are intended
to continue providing a set of living examples of Collaborative Networks in truly
industrial environments, serving both the purpose of highlighting and studying their
management experiences in their lifecycle stages, as well as identifying and sharing
their best practices towards a smooth management of their collaborative endeavours.
As the Collaborative Networks scientific discipline continues its consolidation,
more application cases in industry and society continue appearing, making relevant
to the academic and industrial communities to document and disseminate the best
practices and most common errors in order to support the successful development of
different collaboration networks in different domains and application environments.
Main conclusions reached during this lively interactive forum appointed towards moving
beyond business models prototypes into real business models, and this e-book stands
for a second effort in this direction after the publication of the first e-book in 2009.
David Romero, Panel Chair

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Panel Aims and Scope

• The panel session was organized with the aim of sharing the experiences
and lessons learned from a group of practitioners for the establishment and
management of the Next Generation Collaborative Networked Organizations.

• The panel session will introduce a number of industrial cases that have been
studied from both a theoretical and practical perspective to validate and
demonstrate the applicability of collaborative networks concepts, methods
and tools as a contribution to help facing the Next Generation Collaborative
Networked Organizations challenges.

• The panel session scope will cover different regional manifestations of
collaborative networks, especially in the manufacturing industry, and will
depict their main strengths and current challenges in order to manage
successful Collaborative Networked Organizations.

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GPT (Gruppo Poligrafico Tiberino)

Lorenzo Tiacci*, Luca Cagnazzo
lorenzo.tiacci@unipg.it, cagnazzo@mach.ing.unipg.it

REBNET - University of Perugia

PRO-VE’10

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Introduction (1/3)

Starting Scenario:
The district of paper converting, printing and publishing
in the Centre of Italy (the ‘Umbria’ region).

• 160 enterprises,
• a high technical-productive specialization,
• historical handicraft tradition in the mechanical and printing field,
• absence of leader firms capable of providing direction
for the system as a whole.

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Introduction (2/3)

Starting Scenario:
The district of paper converting printing and publishing…

… three firms …
(Pasqui, Litop and Litograf)
complementary products,
and solid personal knowledge.

new company: GPT
“Gruppo Poligrafico Tiberino”
… integrate the commercial and marketing functions…

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Introduction (3/3)

2005
University of Perugia
Relevant National Research Project:
“MIGEN”
Innovative models and tools for the networks management

The VDO Model

GPT
became
the model
field test

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Network Overview (1/4)

21 partners
Entry
GEPAFIN**
16 partners
Entry
SPIN-OFF*

Idea GPT
3 partnes

Design Realizion GPT project Development GPT
(2007-2008) (2008 – now)

* NETVALUE/PROMAN University Spin off ** Funding Society of REGIONE UMBRIA
on network enterprise

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21 partner companies.
The aggregated turnover is of more than 150 million euros.
More than 1,000 employs.
More than 100 employs involved in R&D.
24 production plants.

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Network Overview (2/4) Next Generation Collaborative Networked Organizations

In these sectors GPT is able to offer products, technology
and skills to satisfy all customers needs.

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The VDO Model:

“A strategic association/alliance of organizations
and the related supporting institutions, adhering
to a base long term cooperation agreement
and adoption of common operating principles
and infrastructures, with the main goal to create
innovative BOs.”

This goals is accomplished by introducing a new
for-profit company, the VDO, operating as a
permanent network management/coordination
entity. In pursuing these business opportunities
the VDO realizes VOs and VEs of network
members and/or external partners

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The VDO Model:

ROLES:
• Opportunity Broker,
• VO planner,
• VO coordinator,
• Supporting roles:
(network administrator, knowledge manager, etc.)

permanently concentrated
in the central entity

for-profit nature

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Network Creation (1/4)

Selecting the partners/staffing
the GPT network:
Heterogeneity / complementarities between companies,

+ innovation attitude of the network, trust, information sharing,
- conflicts,

Among the 21 network members,
the vast majority (19) are companies covering different area of service/products.

Applications of models and paradigms coming from
scientific research to provide GPT with management staff.

+2

Participates in the GPT venture capital.
Eases loan access for GPT and the other network members.

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Revenue sharing definition:

GPT
• individuates a BO, is remunerated for the added value
• Forms the VO, brought by its marketing, innovation
• Coordinates the VO, and coordination activities
• Sells the final products/service.

Network members:
See GPT as a client to whom receive the benefits related
provide its own products/services to their increasing volumes.
and from which to be paid.

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The GPT Governance Model:

GPT is a for-profit company,
Independent
with its own board of director
(to avoid clash of interests)
and its own independence

The participation as
shareholder allows
Network members are network members to profit
share-holders of GPT by the extra benefit
consisting in GPT
dividends

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Trust establishment:

The ‘external’ and independent
role of GPT…

…the for-profit nature
GPT, which is obliged to involve
the most competitive members facilitators
when creating a VO…

…members are not
in competition.

Network contract:
• Members put at GPT’s disposal their production capacity, know-how, technology.
• GPT commits it-self not to compete with single members.

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Network Operation (1/2)

VE/VO realization & coordination:
A complex role (competence mapping,
partners selection, etc.)

It is preferable these issues to be handled by
a specialized entity (rather than by a network
member that changes every time).

GPT implemented a knowledge management
project in collaboration with the University of
Perugia (ICT-based KM tool)

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Management of Collaborative Operations:

The supplier/customers interface
it is always GPT itself,
and never a single member.

GPT always represents the whole network
and naturally behaves like a larger dimension
virtual entity

Collaborative procurement opportunities have been evaluated utilizing
the EASM procedure: Exploring, Analyzing, Selecting, Managing.
During 2008, nearly 2.000.000€ of Collaborative Procurement Opportunities
have been evaluated, and cost reduction has been estimated about 5%.

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Network Management (1/3)

Relations with external subjects:
Relationships with external subjects
are all managed by a central entity

GPT

• Can interact for the community with
institutional subjects as a single legal
entity.
• Can promote innovation activities with
research centers or other supporting of
financial institutions (banks, government
offices, etc.).
• Has the possibility and the interest of
promoting the NETWORK BRAND.

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Marketing / Innovation Management:

GPT mission is
to constantly interact with market

Members can market their traditional
products while GPT can promote
the innovative ones.

Thanks to GPT proactive activity
it is possible to stimulate research
and innovation at the network level,
in a centralized and proactive way.

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1. Analysis 2. Design 3. Production
Virtual Organization Virtual Enterprise

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Example:
Product/Service Integration Next Generation Collaborative Networked Organizations

Diploma Customization/Production/Delivery
University

GRADUATES
DATABASE
• Graphics
• printing
• packaging
• logistics

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Economic Results

Result Total
More than 2 M€ new GPT orders
Market
(turnover 2009 > 1 M€)
Innovative More than 150 k€ orders
products on new GPT products
Interbusiness and
More than 2 M€ of collaborative
collaborative
opportunities examined; 100 k€ orders
procurement
R&D projects and 5,7 M€ projects developed
innovation (investments, services, R&D)

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Conclusions

• GPT is the first case study in which the VDO model has been applied
the VDO paradigm can positively influence many key factors as:
– Strategy definition,
– Trust and collaboration,
– Information system management,
– Goal congruence,
– Revenue sharing definition, and
– Innovation management.

• GPT can play the role of the leader firm.

• Main future GPT challenges:
– Implement an automatic estimate systems for price formation.
– Internationalization (new markets and foreign partners).

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Panelist Short Biography

• Laurea Degree in Mechanical Engineering, Doctoral Degree in Industrial
Engineering, Lorenzo Tiacci* is currently Assistant Professor at
the Faculty of Engineering of the University of Perugia, Department
of Industrial Engineering. Before joining the University, he matured a
significant experience in the automotive industry.
• He is in the operative committee of REBNET, the Research on
Business Networking unit of the University of Perugia, a new
interdisciplinary laboratory born from the collaboration between the
Faculty of Engineering and the Faculty of Economy.
• He has been involved in numerous research projects related to
collaborative networks, including the ones related to the GPT case
study

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Aerospace Enforcement Network
AE Network
http://www.fortalecimientoaeroespacial.org

Ricardo Ramírez, David Romero*, Arturo Molina,
ricardo.ramirez@itesm.mx, david.romero.diaz@gmail.com, armolina@itesm.mx

Tecnológico de Monterrey

PRO-VE’10

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Introduction

• The Aerospace Enforcement Network aims are:
– To promote and foster the aerospace industry as a driver for
the national economic development,
– To provide manufacturing industry with the technological infrastructure
and qualified human capital to support the aerospace sector
development in the country,
– To contribute to technology-based enterprises incubation needed to
complete and extend the aerospace productive value chain in Mexico.

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Background: Aerospace Industry

• The aerospace manufacturing industries
are typically organised in a pyramidal
supply chain, with SMEs at the bottom,
Tier 2 & Tier 3 in the middle, and Original
Equipment Manufacturers (OEM) at top.

• Boeing, Airbus, Bombardier and Embraer
are examples of OEM’s.

• Manufacturing firms have traditionally
grown in adjacent areas and thus are
grouped by similar goods produced or
related functions.

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AE Network Lifecycle

2005 • The Aerospace Enforcement Network was originally founded under
the name: “Aerospace Industry Development Center”, as a public-
private partnership between the Mexican Ministry of Economy and
the Tecnológico de Monterrey (University) to develop the aerospace
AE Network Lifecycle

sector in Mexico.
2009 • The Aerospace Industry Development Center was re-named later on
to the “Aerospace Enforcement Network” as the technological
development center aimed to continue growing to include more
manufacturing enterprises and their related support institutions such
as research centers as part of its strategic partners’ network and
became truly an aerospace virtual industry cluster.
2010 • The Aerospace Enforcement Network becomes a service provider
(training and consulting) to the manufacturing enterprises, member
of the aerospace virtual industry cluster, in order to help them
to obtain their certifications in AS9100 and NADCAP in order to
be globally competitive and be inserted into the major aerospace
201X players supply chains with an offer of highly added-value products
and services.

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• During its first two years of operation (2005-2007), the Aerospace
Enforcement Network focused on three main strategies:
1. Industry Partnerships creation - aiming to identify the key stakeholders
for the aerospace value chain development in Mexico by promoting new
enterprises relationships as a business strategy for value co-creation
based on network-enabled manufacturing processes & commercialization
activities.
The Aerospace Industry Development Center served as a competitive
and technological business intelligence unit, a kind of technology broker
for the virtual industry cluster, by providing the aerospace sector with
valuable information regarding market and technological trends that
were afterward translated into new technological development projects
and technical training programmes.
2. Technology Transfer projects - between research centers and aerospace
OEMs, including their first three tier levels, promoting the adoption of
novel technologies for new products developments, manufacturing
processes and supply chain management.
Furthermore, researcher centers also acted within the aerospace virtual
industry cluster as technology service providers for laboratory and tests
facilities matching technologies to meet the industry needs.

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3. Technical Training - supporting new instructional programmes for human
capital development in order to create and grow a highly specialized
work-force as a competitive advantage in the sector.
• In 2008, the Aerospace Enforcement Network launched a new and
fourth strategy in order to support successful landing initiatives for
major aerospace players in Mexico and attract foreign investment.
4. Aerospace suppliers’ development - a strategy based on the one hand
in continue supporting new technology-based enterprises incubation
targeting the aerospace market with innovative engineering services,
and on the other hand reconverting automotive suppliers into the
aerospace sector in order to diversify their business opportunities.

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Aerospace Enforcement Network Operational Model I

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• Year 2009 was the Aerospace Enforcement Network consolidation
period, which also brought an important new actor to the public-
private partnership: the National Aerospace & Defense Contractors
Accreditation Program (USA).
• With NADCAP incorporation, the Aerospace Enforcement Network
became international and started a new operational phase that
promoted a strategy evolution, now based on five strategies to let
existing and in development/reconversion process aerospace and
automotive suppliers to obtain their certifications in AS9100 and
NADCAP:
1. Technical Training, with a larger catalogue of instructional courses and
workshops for the aerospace human capital development,
2. Entrepreneur Guidance, to help enterprises in their preparation and
appliance of best practices for quality systems, project management,
and production planning and control in their business operations,

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3. Internships, focused on specific implementation projects related to
state-of-the-art techniques and tools for the quality assurance
procedures that the aerospace sector requires,
4. AS91000 preparation, supporting diagnostic services to state
the current situation and specific strategies towards an aerospace
supplier certification, and
5. Certifications, in specific AS9100 and NADCAP certifications in order to
provide global recognition to the Mexican aerospace suppliers.

AS9100 NADCAP
Certification Certification

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Network Evolution (1/2)

• Nowadays (2010), the Aerospace Enforcement Network main
objectives are to give supporting services in training and consulting
to the manufacturing enterprises, member of the aerospace virtual
industry cluster, to help them to obtain their certifications in AS9100
and NADCAP in order to be globally competitive and be inserted into
the major aerospace players supply chains with an offer of highly
added-value products and services.

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Network Evolution (2/2)

Aerospace Enforcement Network Operational Model II

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Conclusions

• The Aerospace Enforcement Network is a unique public-private
partnership in Mexico deploying collaboration strategies between
government, industry and academia to develop an international
competitive base of Mexican suppliers for the aerospace sector.

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Panelists Short Biography

• Ricardo Ramirez is the Dean of the School of Engineering and Architecture of
Tecnologico de Monterrey, Campus Mexico City. He holds a PhD in Automatic
Control from Grenoble Institute of Technology, France in 1997. He has been a Senior
Consultant in Vehicle Dynamics and Automotive Control for more than 15 years.
He is member of the National Researchers System of Mexico (SNI-I). His research
interest are: intelligent transportation systems, automotive control, supervision and
fault detection and isolation systems.
• David Romero* is the Director & Scientific Project Manager of Center for Incubation
and High Technology Transfer of the Tecnológico de Monterrey, Campus Mexico
City. He holds a Master’s Degree in Administration of Information Technologies
(2007) and two specialties in Knowledge Management and Business Informatics
Management. He has participated in various National and International Research
Projects, Consulting Services and Training Programs related to: Enterprise
Architectures, Integration, Interoperability and Networking; Concurrent Engineering
Enterprise; Collaborative Networks and Technology & Innovation Management.
• Arturo Molina is the President of the Tecnológico de Monterrey, Campus Mexico
City. He holds two PhDs, one in Manufacturing Engineering from Loughborough
University of Technology, England in 1995, and the second PhD in Mechanical
Engineering from the Technical University of Budapest, Hungary in 1992. He is
member of the National Researchers System of Mexico (SNI-II), Mexican Academy of
Sciences, IFAC TC-WG5.3, IFIP WG5.12 and IFIP WG5.3 Furthermore, Prof. Molina
has been involved in many Latin-American and European projects oriented to
the creation of virtual industry clusters, virtual organization breeding environments
and virtual enterprises.

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Virtual Organization Breeding Environment
for Mould and Die Industries:
The NuFerJ Case

Universidade
Federal
De Santa
Catarina

Fabiano Baldo, Ricardo Rabelo*
baldo@joinville.udesc.br, rabelo@das.ufsc.br

Santa Catarina State University, Federal University of Santa Catarina

PRO-VE’10

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NuFerJ Overview (1/3)

NuFerJ
Cluster of Mold and Die
Industries of Joinville

• Composed of mold and die producers
around Joinville City, south of Brazil;

• Joinville is a very industrialized
medium-sized city;

• NuFerJ has been founded in 1993,
having now ~50 members (all SMEs).

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• There are ~450 mold makers around Joinville, making it
the 2nd largest pole of M&D in LA; ~4K direct employees.

• A total turnover of ~US$ 200 millions in 2009.

• Very low level of exportation: focus on internal market.

• Main customers: Automobile and household appliance
companies.

• Although some existing complementarities and sporadic
pre-defined partnerships, they compete to each other.

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The main reason for the cluster creation
was to strengthen cooperation among
partners and to create better conditions
for being more competitive.

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Concrete Challenges (1/2)

• Labor costs:
– BR 7,6 US$/hour; MX US$ 3,9; IND US$ 1,6; CH US$ 0,8.
– Increasingly loss of business for China (40%).

• Tougher competition with other Brazilian poles and with
M&D companies from abroad:
– Bigger and highly variable orders.
– Shorter delivery times, lower prices, higher quality.

• Low production capacity:
– Very few companies capable to absorb these requirements
alone.
– Limited innovation and training capacities.

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Concrete Challenges (2/2)

• Traditional business model:
– No strategic alliances, or absence of methods on how doing this;
– Business sector: passive “let´s have a sit and wait for clients”.

• The cluster type of alliance is no longer providing the current required
level of competitiveness to face problems in a sustainable way:

– Cooperation among companies, when exist, is at too operational /
sporadic level.

– The typical currently cooperation among partners involves lobbying
and exchange of experiences.

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What is needed?

• In resume, they are losing money and competiveness due to the lack
of agility, flexibility, production scalability and increase of scale,
in a global market of ~25 billion US$ (2009).

to
th ow
B u is?
uc e th
int rod

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Essential Diagnostic

• NuFerJ has been already invested on advanced manufacturing machines,
new machining processes, training, modern ICT, use of standards, etc.

• The economic and organization models based on higher productivity and
local / maximal efficiency has reached its saturation. It is no longer adequate
(at least) for this sector (at least in Brazil).

• A new model is needed ! del? on
ic h Mo hich rely
Wh sw
r : the one ATION
nswe OR
A LAB mpanies!
COL g co
n
amo

• There are several types of strategic alliances of companies based on
collaboration.
• We have chosen exploiting & applying two new models of strategic alliances:
Virtual organization Breeding Environment (VBE) and Virtual Enterprises (VE).
• They were chosen not because they seem to be a “trend”, but because it is
believed that they can provide the required level of competitiveness &
sustainability to NuferJ, for today and for the future.

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Objective

• This presentation aims at sharing our experience on how NuFerJ
cluster is being “transformed” into a VBE (first main goal) and hence
VEs can be created from it (second main goal).

• For this, a supporting methodology to assist managers on this is
being devised.

• This is still an ongoing work.

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VBE and their VEs

A VBE is a long-term strategic alliance A Virtual Enterprise (VE) is a
of autonomous, geographically dispersed, opportunity-driven strategic alliance
multi-sectorial and heterogeneous formed by autonomous, geographically
organizations (in terms of governance, dispersed and heterogeneous
expertise, culture, social capital and organizations from a VBE, that is
objectives) that share common policies dynamically and temporarily created
and rules along the VBE lifecycle in order to attend to a business or collaboration
to better achieve its goals (including opportunity (its essential common
the breeding of VEs), and whose goal), sharing resources, information,
interactions are supported by computer governance principles, benefits and
risks, whose interactions are supported
networks and collaborative ICTs.
by computer networks and collaborative
ICTs, and that acts as it was one single
organization.

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Research Motivation

Top-down:
Top-down approach
Existing methodologies Based on solid Starting from solid
to create a VBE are too theoretical foundations theoretical foundations
for modeling
generic. They do not Collaborative Networks.
provide very concrete • ARCON framework
guidelines and steps (Camarinha-Matos &
Afsarmanesh, 2008)
how to do that.
• VBE reference model &
instantiation methodology
Existing VBEs have (Romero et al., 2008)

been created in
Bottom-up:
an ad-hoc manner, in a Bottom-up approach
Consideration of Understanding
bottom-up way, very the M&D sector and
much difficult to characteristics of the clusters’ members as
particular sectors and well as mapping them
replicate. existing companies against the reference
framework

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Structured Approach

1 VBE Specification 2 Assessment Description
Perspective Characteristic
- Production planning process
Business - Production control process and performance data
collection
Process - Purchase process
-…
- Level of roles definition and of organization areas
Organizational - Functions and responsibilities defined
Structure - Level of work overloading by employees
-…
- Level of utilization of ICT
Resources - Enterprise resource planning system
(human and - Collaborative systems utilization (e-mail, chat,
ICT) workflow, forum, etc.)
-…
- Resource utilization optimization
Organizational - Quality prioritization
- Standards and norms utilization (technology and
Culture
Summary of identified aspects: process models)
-…
• Endogenous Elements: - Target market well-defined
- Customer interaction (post-sales)
Market
– 20 Structural; - Long-term planning
-…
– 23 Componential;
– 27 Functional;
– 25 Behavioral. 3The Preparednessevaluated have been transformed
characteristics to be
Per-Evaluation
• Exogenous Interactions: into 45 questions, associated to those five
– 24 Market; perspectives:
– 21 Support; • Business Process: 9 questions;
– 17 Societal; • Organizational Structure: 4 questions;
– 10 Constituency. • Resources (human and ICT): 14 questions;
• Organizational Culture: 13 questions;
• Market: 5 questions

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Structured Approach

4
1 Preparedness Analysis 5
2 Instantiation Methodology
Excellent (4)

Good (3)

Average (2)

Bad (1)

Very bad (0)

28 companies (of 50)

Foundation Metamorphosis
Initiation &
Operation
Recruiting

Dissolution
VBE Evolution

Operation
Creation Dissolution

VEi Several
Steps
Evolution

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Conclusions

• Presentation of an ongoing work about the development of a methodology
to create a VBE based on reference models.
• One of the most important outcomes has been the knowledge about the intrinsic
high complexity of such task as well as the systematization of the process in a
form of a concrete sequence of steps and aspects to be considered along
the creation of a VBE.
• Although the NuFerJ VBE is not created yet, the general “process” so far carried
out inside NuFerJ has already generated lots of synergies among partners,
which is one of the goals of a VBE.
• The devised methodology does not classify (yet) the complexity and criticality of
each of its steps as well as it does not define (yet) the governance model.
• There many challenges to face along the VBE creation process. In particular,
the cultural ones (trust, collaboration [to give and to receive], information
exchange, etc.).
• CNO & VBE areas are relatively new and many (open) things should be more
deeply researched in order to put theory in practice (e.g. economic models, legal
frameworks, inter-org. governance models, IPR).

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• Fabiano Baldo is currently an associate professor of Computer Science
Department at Santa Catarina State University – Brazil. He obtained his Ph.D.
in Automation and System at Federal University of Santa Catarina in 2008.
His research focuses mainly on the definition of methodologies for Collaborative
Networked Organizations implementation, covering also specific CNO’s issues
like partner search and selection, interoperability and decision support systems
for CNOs. He has been involved in Brazilian and European research projects on
CNOs since 2000.

• Ricardo J. Rabelo* is an associate professor of the Department of Automation
and Systems at the Federal University of Santa Catarina in Brazil, where
he heads the GSIGMA research group. He obtained his Ph.D. in Robotics and
Computer Integrated Manufacturing from the New University of Lisbon, Portugal,
in 1997. His focus of research covers the entire lifecycle of collaborative networks,
involving issues like: SOA and interoperability, knowledge management, decision
support systems, reference and business models for CNOs, ICT-infrastructures,
multi-agent systems and integration with shop-floor. Prof. Rabelo has been involved
in many National and European research projects and program committees of
relevant conferences. He is currently the Head of the Department of Automation
and Systems of UFSC.

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SADECAL
Supporting e-Business
Diffusion in Calabria

Antonio P. Volpentesta, Salvatore Ammirato*
{volpentesta; ammirato} @deis.unical.it

Department of Electronics, Computer Science and Systems
University of Calabria - ITALY

PRO-VE’10

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Introduction (1/2)

• The agribusiness evolution:
– Deregulation and globalisation of the markets
– Growing power of retailers increasing pressure on producers prices

Clementina PGI of Calabria

Origin (farmer) price 0.18 €/Kg
Selling (greengrocer) price 1.8 €/Kg

Nettarina PGI of Calabria

Origin (farmer) price 0.50 €/Kg
Selling (greengrocer) price 2.50 €/Kg

– Increasing consumer demands for safe, healthy and ethically correct food
and attractive countryside ‘Relocalisation’ process
i.e. the identification and valorisation of local resources

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Introduction (2/2)

• Agrifood producers search for new ways of doing business able to:
– guarantee competitive advantages,
– improve farm revenue streams,
– develop new consumer market niches.
• Agrifood consumers search for:
– High quality agrifood products with a local identity
– Reduced purchasing prices
• Producers and consumers need of alternatives to create proximity among
them in territorial and social sense.
• Consumers want to be closer to the food origins, experiment direct contact with
farmers, share their experiences, feelings and needs with other consumers.

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SADECAL Network Overview

• Number of members:
– 9 agrifood producers (SMEs or simple farms) of high quality agrifood goods
forming a firms’ aggregation (for-profit organization) named Agrifood Producers
sub-community (AC).
– 73 final consumers (typically, households), gathered around a no-profit and
self-organized purchasing group named Consumer Group (CG), who want
to purchase high quality agrifood goods at reduced prices.
– 1 Trusted Third Party (TTP) aimed to influence innovation decisions, facilitate
transactions, organize the agrifood trade network and provide and manage
the eBusiness platform where consumers and producers act.
– 1 Consumers sub-community where all consumers can share information
and knowledge using web 2.0 tools made available by the TTP.
• Sector: Agrifood
• Geographic localization: DAQ-Sibari (Calabria, Italy)
Agrifood Products

• Wine;
• Olive and olive oil;
• Fruit & Vegetables;
• Dairy Products.

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• Need to operate on:
– Agrifood products, setting them with high “typical and quality” features
(i.e. strictly related with local territory);
– Production processes, directly relating producers and consumers in order
to build trust and customer loyalty
– Distribution processes, making the long and complex agrifood supply chains
shorter;
– Technological platforms, supporting adequate e-business solutions for SMEs
and web 2.0 tools for consumers.
• Goals to reach:
– Support the ‘Relocalisation’ process, i.e. the identification and valorisation of
local resources;
– Foster the emergence of ‘Regional Alternative Agrifood Networks’ (RAANs);
– By-pass the large-scale retail trade;
– Create sustainable relationships between agrifood producers and consumers;
– Provide Internet-based ‘electronic trade platforms’ for agribusiness.

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Network Creation(2/2)

• Constraints for a RAAN organizational model:

– Importance of setting up organizational and technological aspects
in order to support the socio-economic strength points and valorise
the cultural heritage of the territory.

– Prerequisite: presence in the territory of an initial set of agribusiness
firms possibly showing flexible embedded inter-firm relationships allowing
for economies of scope

– Need to set up a RAAN as a learning community where members and
stakeholders are all involved in maintenance and innovation which is based
on common aims, shared meanings, common approaches commitment
to effective implementation and mutual accountability.

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• Agrifood producers selected after a public call on the base of:
– Geografic localization,
– Types of productions,
– Pre-existance of inter-firm relationships.
• RAAN representation:

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Roles and relations:
• TTP: played by the ‘District Centre’ of the “Società di Distretto”
(a consortium of 92 organizations among the ones belonging to
the DAQ-Sibari) supported by the DEIS-UNICAL staff… played roles :
– Technology intermediary. Provide and manage an e-business platform including
hardware, security, training and continuous assistance;
– Transaction intermediary. Provides services and coordinates and manages the logistic
chain. Operatively, it collects and structures producers offer by means of an e-catalog;
collects cumulative purchase orders from consumers groups and processes them in
order to form single purchase orders for each agrifood producer; manages the payment
system. Once goods arrive from producers, it packs them with respect to each
consumers group order and sends them to the consumers group pick-up point;
– Guarantee authority. Defines an “ethical code” and behavioural rules in transaction
processes; provides a broad governance function, enables the promotion of cooperation
among consumers and producers, and controls transactions to ensure behavioural
correctness of members interactions in the network.
– Infomediary. Coordinates information and knowledge flows. Provides community
members of a web platform for sharing information and knowledge among users.
By means of web 2.0 tools (social networking, photo and video sharing, mashups,
podcast, ecc.) the TTP enables the development of virtual communities among
consumers and producers and allows the creation and exchange of user-generated
content.

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• UNICAL-CG:
– 73 permanent subjects among the UNICAL staff members.
– Aim: purchase, at reduced prices, agrifood secured typical regional foods.
– Members share their “shopping lists” to create a cumulative order for an heterogeneous bundle
of products to be submitted to the TTP.
• Consumers sub-community:
– UNICAL-CG members research products characteristics and price through social networks,
consumer product reviews, and prices comparison before making a final decision of
purchasing.
– The web platform is a virtual arena where individuals share experiences and build up
relationships.
– Consumers research all aspects of a product performance, value and social acceptance in
relative comparison to similar products of different producers.
• AC:
– Producers sends information about products it sells to the TTP in order to be included in
the e-catalog.
– Once a producer receives purchasing orders, it sends the requested goods to the TTP
collection point.
– Continuous interactions give producers new possibilities to get valuable insight for
the innovation process and to use the creative potential of consumers.
– Interaction, lead producers in setting products characteristics and meanings in order to address
sub-community expectations.
– Aim: make production process much more transparent and open in order to build a greater
sense of community through consumers/producers active participation.

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Network Management

Two pilot tests highlight some trends:

• Economic-organizational perspective:
– An increasing number of participants up to hundred people at the end of the
second test;
– an average reduction in selling prices, with respect to other marketing channels;
– a continuous increase in the number of offered products present in the e-catalog,
which can be interpreted as a continuous growth in producers’ interest for
the system.
• Knowledge management perspective:
– A virtual community has been created who published, enriched, shared,
communicated and combined information and knowledge mainly about products
prices and nutritional characteristics, recipes, and local tourism.
– The 2.0 web-portal provided a flexible environment for members where they have
been creative and innovative, participating in social networks, creating and
spreading knowledge in a collaborative way, taking advantages of others’ wisdom.
– The use of the social network allowed the creation of groups of users with common
interests on particular agri-food products or recipes.

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Conclusions

• The process of developing learning communities is long and related with
theories of change and leadership.
• Sustainable change begins with recognition and modification of core values,
assumptions and ideologies shared by members within organisations. Because
of the complexities of the culture of change, many past projects of collecting
farmers around agribusiness initiatives failed.
• Further studies are underway in order to:
– Define an evaluation model to evaluate if forms of RAAN initiatives can
help to foster the development of the regional area where they are applied
and, thus, to estimate direct and indirect economic advantage for both
agrifood producers and consumers.
– Follow up with some interviews to try point out the level of
organizational and cultural change. Such analysis might lead to further
insights into the impact of clan culture and other aspects of
organizational culture on sustaining regional agribusiness initiatives.

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• Antonio P. Volpentesta is an Associate Professor of Economics and
Management Engineering at the University of Calabria (Italy). He has been
carrying out researches and studies for 32 years in the areas of operation
research, information systems and management engineering. He has published
some books and over 90 papers in these areas. He is the Director of GiudaLab, a
management engineering laboratory at DEIS, where much work about regional,
national and European projects have been carried out in the past 20 years. His
current research interests include virtual enterprises, knowledge management,
learning systems, e-business and collaborative networks.

• Salvatore Ammirato* is Researcher in Economics and Management Engineering
at the University of Calabria (Italy) and External Researcher of the ‘Centre for
Research in Transnational Education, Leadership and Performance’ at the
University of Canberra (Australia). He received his Master degree in
Management Engineering and PhD in Operation Research from the University of
Calabria. He teaches undergraduate and graduate courses in Information
Management and Business Process Management. His main research interests
are organizational learning, collaborative networks and information management.

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Panel Discussion Question

How we can support the development
of successful business models for
collaborative networks?
“By understanding the unique value proposition of a collaborative network to its stakeholders and customers”

“By learning how to target the right stakeholders and market/customers for a collaborative network”

“By knowing how to build competitive distribution channels by means of collaborative logistics to reach the customer”

“By building links and strategies to maintain good customer and stakeholder relationships”

“By proper managing distributed activities and resources to co-create value for the customer”

“By integrating capabilities to underpin an added value proposition for the customer”

“By forming strategic alliances, joint-ventures and long-term partnerships to improve a collaborative network”

“By identifying the costs incurred in the creation and delivering of a value proposition within a collaborative network”

“By defining different strategies to achieve economic sustainability through a variety of revenue flows”

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Panel Conclusions

• The panel audience reached some common agreements towards supporting
the development of successful business models for collaborative networks:
– The call for business model design templates.
– The call for governance model design templates.
– The strong need for value architectures to define a value proposition and
its value network to deliver it to the customer.
– The demand for new financial models based on:
• Innovative revenue models.
• Sustainable costs structures.
• Attractive income share models.
– The call for new value systems for different:
• Leadership styles.
• Relationships styles.

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Special Panel Session

SPECIAL PANEL SESSION ON
Towards the Next Generation Collaborative Networked Organizations:
International Challenges, Trends and Research Opportunities

“Past, Present and Future of Collaborative Networks:
Moving from Theory to Practice”
Session Organizing Committee
David Romero (ITESM, Mexico City) Arturo Molina (ITESM, Mexico City)
Myrna Flores (CEMEX, Switzerland) Ricardo Rabelo (UFSC, Brazil) Michel Pouly (EPFL, Switzerland)

Download e-Book:
http://www.uninova.pt/~prove09/2009/presentations/PRO-VE09_Special_Panel_Session_ebook.pdf

Universidade
Federal
De Santa
Catarina

PRO-VE’09
Thessaloniki, Greece, 7-9 October 2009

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Panel Acknowledgments

Università
degli
Studi di
Perugia

Universidade CNOs
Federal Case Studies
De Santa SIG
Catarina

PRO-VE Program Chair:
Prof. Luis M. Camarinha-Matos

PRO-VE 10 - Special Panel Session on Next Generation Collaborative Networked Organizations

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