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Virtual factory. Dynamic cooperation pilot development in the euregio bodensee area.

Development and implementation of the virtual factory
concept for multilateral cooperation relations with the
focus on market structures.

After a recession, producers are facing changed markets. Today one cannot speak about a 'new development' but about continuously changing framework conditions, which are unpredictable. Low cost manufacturers from the Far East as well as the European integration of the former Socialist Bloc in production displacements contribute a great deal to today's dynamic situation. To offer superior price/ performance combinations for a fast growing customer base to show a global market presence in the face of international competition with rapidly changing competition laws, is becoming more and more complicated for the single company. At the moment, SMEs as well as several areas of larger organisations in the Swiss machine tool (supplier) industry are tending to make organisational changes in the direction of lean and flexible structures. Successful companies have proved that: (i) increased flexibility with low costs can only be achieved by the delegation of activities which can be provided by others in a faster, more efficient way and with lower costs (concentration of core competences) and that (ii) not only products but also in-house production capacities can be offered in the market to face changing order quantities. However, with today's comprehension, only bilateral relationships can be integrated into order processing with the necessary reliability. In doing so, high opportunity costs are accepted. The promising concentration effect on core competences can only be finished in a greater interdisciplinary network cooperation in which cooperation relationships (insourcing and outsourcing) can be managed, an objective which will be aimed at in the course of the "Virtual Factory" project. Virtual factory means a temporarily limited unification of companies in a stable enterprise network cooperation which consists of specialised companies, coordination and broker services. Enterprise relationships are multilateral and are created anew on each product. Such a self-coordinated net of specialists provides innovations which are beyond the scope of a single company. In this way, even high innovation rates can be borne by the network because the product life cycle is separated from the production and investment cycles. Consequently, the objective of this project is to build up a market for virtual factories. Specified to orders, the core competences of several companies will be clustered in virtual factories. Thus, new market opportunities for the network partners will be developed, creating growth opportunities for manufacturing companies in Europe. In particular, SMEs can achieve additional business through production in virtual factories. The added value of single production capacities will be optimised industry-wide to support European entrepreneurial locations. In the "Virtual Factory-Market" project, the marketing of the possible performances and services of virtual factories will be examined. In addition, the acquisition and handling of external orders will be tested.
Acronym: 
MARKET97
Project ID: 
1 718
Start date: 
01-05-1997
Project Duration: 
15months
Project costs: 
510 000.00€
Technological Area: 
Market Area: 

Raising the productivity and competitiveness of European businesses through technology. Boosting national economies on the international market, and strengthening the basis for sustainable prosperity and employment.