Extended enterprise

Extended enterprise
See also
Integrative function of logistics Product structure Logistics chain Value chain model Price and non-price competition Principles of Supply Chain Management Efficient Consumer Response Operational management Logistics system

Concept of extended enterprise is the most advanced form of added value chain concept. Treating supply chain as "extended enterprise" is associated with a specific approach to enterprise collaboration, which involves the elimination of many existing barriers between entities. The primary goals are to enable the management and coordination of movements of products ranging from raw materials to finished goods purchased by consumers and other users.

Implementation of the presented concept is associated with a change in the approach to business management. The functioning of the market can not be seen only as lonely struggle with competitors and the desire to win benefits with suppliers or customers. It is necessary to understand that everyone involved in the production and distribution of the product should work closely in providing the highest possible benefits to end-users and customers.

Application of extended enterprise

The concept of extended enterprise refers to the idea of treating the supply chain as an extension of the main business, rather than as separate entities. This approach involves collaborating and coordinating closely with suppliers, partners, and other stakeholders in order to improve efficiency, reduce costs, and enhance the overall performance of the supply chain.

An extended enterprise approach can be applied to various business models, such as manufacturing, retail, and logistics. It can also be used in a variety of industries, including automotive, aerospace, and healthcare.

One of the main benefits of the extended enterprise concept is the ability to share information and resources across the supply chain, which can lead to better decision-making and problem-solving. Additionally, it can lead to increased innovation, improved customer service, and greater flexibility in responding to market changes.

To implement extended enterprise, companies must have a strong IT infrastructure, which includes a robust enterprise resource planning (ERP) system, a customer relationship management (CRM) system, and other tools that enable the sharing of data and communication across the supply chain. Some of the common ways of implementing the concept are by using digital tools such as cloud computing, shared platforms, and analytics.

It's important to note that, implementing extended enterprise approach also requires a change in culture, mindset, and processes of the organizations. The process of implementing the concept can be difficult and time-consuming, but it can bring significant benefits to the organization in the long run.

References

• Sheridan J.H., Managing the Value Chain for Growth, Industry Week, vol. 248, is. 16, September 1999
• Pyke, D. F., & Johnson, M. E. (2004). Sourcing strategy and supplier relationships: alliances versus eProcurement. In The Practice of Supply Chain Management: Where Theory and Application Converge (p. 77-89). Springer US.