Extended Enterprise System

No less impressive was the parallel development of the Extended Enterprise to complement the platform teams. Extended Enterprise is a trademarked term applied by Chrysler to describe its partnership with suppliers. The initiative provides lessons for partnerships between trading partners. As of 2003, the company defined its Extended Enterprise System as a Chrysler coordinated, goal-driven process that unifies and extends the business relationships of suppliers and supplier tiers in order to reduce cycle time, minimize systems cost, and achieve perfect quality. ... 

Elizabeth Chang is professor in the School of Information Systems and director of the Center for Extended Enterprises and Business Intelligence at the Curtin University of Technology (Western Australia). Her research interests include information hiding, cryptography, multi-site software engineering, and ontologies. 

Point of focus Inventory, projects, logistics, transport, order completion Redesigning processes, system improvement Forecasting, planning, customer service, extended enterprise Customer, network... 

As collaboration succeeds and technology is used as a key improvement tool, the linked firms move into an industry leadership position where a value chain constellation begins to form. This entity is a set of firms cooperating as an extended enterprise to dominate a particular market or industry by virtue of having the delivery system of choice in the eyes of the desired business customer. Now the firm is part of a constellation of companies that represent the end-to-end value chain, with all of its complexities understood and under an overall improvement effort. Firms in this level look seriously at supply chain outsourcing to find the most capable constituent for process steps. E-procurement systems are in place and supporting Internet communication systems link the partners. 

Level 5 of IT introduces a full network communication system with a shared architecture that integrates planning across the value chain. Extended enterprise architecture is in place. Strategy and implementation resources are extended across the value chain. Internet tools are the dominant technology infrastructure. Processes and standards extend across the network. 

Together the partners view the model as an extended logistics value network and optimized conditions are the objective as each player sets aside the need for control and uses the most effective system from beginning to end of the supply chain, even when it means one player incurs an extra cost in the process. Balanced scorecards become the means of analysis and assignment and the technique for allocating costs across the extended enterprise. 

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