The extended enterprise: a decade later

Abstract

Purpose – The purpose of this paper is to review the state of the art in extended enterprise (EE) thinking. Design/methodology/approach – The approach used the 2004 book, The Extended Enterprise, as the jumping-off point to review the literature and better define the EE. What was once projected as depicting the future state of supply chain management is now shaping the way in which organizations interact with their customers and suppliers. New issues in this arena include considerations of risk, knowledge sharing, and supply chain performance. The authors review these new developments, describe how they might affect the collaborative supply chain, and posit future trends. Findings – The major theme from this research is that EE thinking is emerging among global companies as a primary way in which firms now compete. The term “Collaborative supply chains” appears, in some circles, to replace the term “EE.” Yet the principles and tenets delineated in the term “EE” are captured in “collaborative supply chains.” The authors find that the EE concept is distinct from other supply chains or subcontracting relationships in that firms are linked as learning organizations. Also, the authors have noted barriers to collaboration such as an unwillingness to share information, lack of trust, perceptions of lack of mutuality and symmetry, and mistrust about the fairness of benefits, costs, and risk sharing. Research limitations/implications – The limitations of this research could be a function of the papers reviewed since this review was not intended to be exhaustive but merely illustrative of the extant research. Nonetheless, the conclusions from the focus on risk, knowledge sharing, and performance hold strong implications for more collaborative relations among supply chain partners. Originality/value – Given the importance of supply chain partnerships, this research adds perspective for those firms that are reluctant to engage in such collaborative partnerships. This review contributes to extended enterprise thinking and is therefore insightful for both academics and practitioners.

Strategic and operational considerations for the Extended Enterprise: insights from the aerospace industry

“…The EE process embeds the suppliers via risks and reward agreements into a single SC-wide business model around the focal organisations. Due to the level of integration, and in order to remain competitive in the future, the relationships and outcomes are not only analysed and managed on a B2B level, but rather on the chain level as a whole (Spekman and Davis 2016). Therefore, it has been argued that the EE creates customer value in ways that are mutually beneficial for all SC partners .…”

“…Upstream and downstream integration has emerged as an important element of manufacturing strategy and evidence suggests that the most successful companies are those that have effectively integrated business processes with suppliers and customers. For instance, Toyota and Honda have been known to have fostered collaborative relationships with suppliers and have traditionally performed better than their competitors (Spekman and Davis 2016).…”

“…Braziotis and Tannock 2011;Spekman and Davis 2016). Supply chain management (SCM) has an ever-increasing importance.…”

“…A distinctive characteristic of the EE, as opposed to traditional integration approaches, is the role of a focal organisation that 'connects the relevant business-unit processes of its suppliers with its own business-unit processes to maximize the value of the supply chain's output for its customer' (Bobbink, Hartmann, and Dewulf 2016, 2). It is a process that combines business relationships along supplier tiers with the aim to maximise product development effectiveness, reduce cycle time, minimise total system costs of the system and enhance quality and customer satisfaction (Margherita and Secundo 2011;Spekman and Davis 2016).…”

Applying Enterprise Architecture to Business Networks

“…Examples include the modular network [Jansen and Cusumano, 2013], the dynamic network [Lopes et al, 2015], and the extended enterprise [Spekman and Davis, 2016]. The main shared aspect among these business networks is their ability to acclimate changes in the business environment with the presence of a network orchestrator.…”