ISCM Home  »  Sponsors  »  Events  »   2000   »   Intel Supply Network University Day

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Manufacturing Technology Committee
Chandler, Arizona Facility

Global Open Value Webs

Cooperative ecosystems of narrow, diverse specialists use third-party market hubs to optimize value webs

Structure of Commerce

• Open transparent markets and the global Internet increase the ability of groups of companies to cooperatively optimize value webs
  • Self-regulating, fluid markets always beat out command and control structures
  • Complex networks of suppliers and service providers are integrated
  • Material, information and funds flows are generally separate
  • Competition based on information arbitrage is now largely dead as transparency is achieved universally
• Inter-enterprise commerce service hubs are the anchors for the formation of new industry structures
  • Fragmented market makers and commerce platform operators have consolidated
• The developing world hooks into the virtual economy, offering high-quality, low cost services and knowledge work, not just manufacturing
  • There is significant investment by developing nations and international aid agencies in high speed network connections to connect to the Internet econom

Business Architecture

• Companies and executives that can put together diverse coalitions of companies achieve big results
• The most highly valued companies create mutually supportive business ecosystems; finding win-win partnerships is better than finding a knock out punch to competitors
• The key core competency is knowing how to put relationships together-partnering and alliance skill
• Managing across distance and cultures is key
• Integrators of services, acquisitions, and value-web-wide processes succeed
• Most companies perform only small slices of activity themselves, relying on the services of others to create the complete business result
• Focus on core competencies is critical to success; large incumbents slim down to core competencies and joint venture with a variety of partners
• Developing a culture that is able to understand the value of not owning or inventing everything is critical
• Co-branding is important

Enablers

• Hyper-enterprise systems give visibility into value creation activities many stages removed from your own activity
  • Data on operation of the entire value web drives optimization of the activities performed in any single enterprise
  • Standardization of B2B e-commerce via XML proceeds rapidly
• Enterprises dismantle large portions of their internal application infrastructure and convert to using industry-level service hubs where the information is already integrated and scale economics have reduced costs significantly
• Internationalization of software and Web services is increasingly important to success in the global Internet market
• Software services from India, Pakistan, Korea, and other Far East countries have grown very quickly
• Free trade expands further; governments remain committed to deregulation