AGILE VIRTUAL ENTERPRISE - THE ENTERPRISE OF THE FUTURE

by Dr. Ng Yan Goh, Ph.D.

It was October 1997, and I had to attend the APICS International Conference at Washington DC but the currency crisis, share market crash and the economic turmoil came so unexpectedly that I was caught with under budgeting. I had to travel to the US as an annual ritual to upgrade my management know-how and enhance my international networking. At one of the keynote speeches, Tom Peters, the management guru, spoke with such enthusiasm and the usual criticism on current management paradigms. He quipped that the enterprises will focus on Agility as the next wave. 

Could the current economic turmoil be contained earlier have we been Agile in Asia? Well we may not be able to work backwards. The good news is that Asia still remains the economic bloc that will contribute to one-third of the world's economy, and it may be time for us to look at Agile Virtual Enterprise (AVE). AVE can be a possible model to ensure that we are pro-active, responsive to changes as though they are new opportunities, ability to adjust or correct ourselves in the shortest possible time to crisis or new market requirements and yet remain highly competitive in the global village. 

The Scenario 
The customers are beginning to expect instantaneous prompt service now and into the future. Let us look at some of the situations. 

When we go to a supermarket or a hypermarket, we expect good stock availability, good pre-sale and post-sale services, convenient free parking, accurate information and value-for-money. Which chainstores will survive the changing customers expectations? 

The banking industry has to go through massive process re-design in order to remain competitive locally and globally. If not they may not survive in the future. 

As customers, we would like to purchase a car of our choice and be able to use the car almost immediately as we move to the information age. We can probably configure the car at one of the customer service computing stations; the information is being passed to the master production scheduling system of the automotive plant; and the plant computer systems works out the promised delivery dates in minutes; we get delivery of our car in less than ten days; register our car with the Registrar of Vehicle (RIMV) using electronic commerce in minutes; pay our insurance and roadtax over the secured Internet point-of-sales systems; and we can drive the car happily ever after with very minimal or no defects. Automotive manufacturers the world over are pressurised to change. 

The manufacturers of the future cannot be complacent and thinking that we can take our customers for granted believing that they remain faithful, loyal and will accept our terms and conditions. The win:win strategy will ensure our survival into the future. The customers of the future are likely to be more and more demanding as the global competition become more intense with the borderless world protected to a certain extent by some regional trading blocs. 

The Agile Virtual Enterprise 
AVE can be compared with the non-Japanese Asian business model where the owners are typically entrepreneurs who in turn are depending on their close relationship with the customers and suppliers to make sure that there is a win:win:win partnership. The entrepreneurs at the beginning stage of the business are able to respond to rapidly changing customers requirements by virtual of the fact that the suppliers are able to deliver goods and services in reasonably short time. However, the situation changes as the entrepreneurs successfully built up the business and when the business volume becomes big these companies become very sluggish most of the time. Unfortunately, currently we have not been able to clearly document the Asian Management Style or systems. Agility has become a major issue for enterprises throughout the world to remain highly competitive. 

The principle characteristics of AVE are: 

• network of teams within the entire organisation rather than the conventional hierarchical and highly departmentalised structure; the organisation is able to respond to changing customer requirements and market conditions rapidly 
• the people are constantly learning and improving to ensure that the enterprise is growing as though they are the owners 
• there are core competencies in new product, process and people development 
• information technology is being employed to enable massive process simplification 
• ability to co-operate with others, including competitors at times, to remain competitive 

• Top Management Leadership 

 

 

It is important to educate and train the people continuously so that they can achieve the enterprise's shared vision and mission as well as ensuring perpetual enterprise development. The fear is that when the people become better educated they are so marketable that they may leave the enterprise for greener pasture. On the other hand if they do not upgrade themselves, the enterprise may be lagging behind the competitors and eventually become losers. The ultimate challenge is to make them highly marketable and productive while motivating them to excel and advance in their career. In a rapidly changing market place, the past experiences and knowledge may become completely useless if there is a paradigm shift or availability of new products using new technology.

In a technology-driven enterprise, Agility will be the key to long term growth and the top management must have the leadership skills to motivate the people to work willingly to be creative and innovative. Leadership is knowing what to do next; knowing why that's important; and knowing how to bring appropriate resources to bear on the need at hand.

• Teaming 

 

 

There is a significant difference between Agile Teams and natural grouping or management appointed teams. The Agile Teams are fundamentally cross functional, guided by the management and leadership, self-directed and empowered to constantly improving the processes and products, and are willingly looking for new problem solving opportunities.

• Information and knowledge 

 

 

A lot of enterprises have huge data bases and many reports and yet may be in dire need for useful information to speed up decision making. The information turnaround has to be almost instantaneous and accurate for us to achieve Agility. The information must be stored in the form that can be easily accessible as they form part of the knowledge base of the organisation. The knowledge workers are able to trust co-workers and are more than willing to share their knowledge. Information technology will become a critical enabler but we have to simplify the business processes at the same time in order to gain maximum benefits.

• Professionalism 

 

 

Professionalism is not about qualification alone but the ability to apply knowledge, sometimes, independently. Professionals are expected to be positive, confident, up-to-date with the latest developments in their particular field of knowledge, and possess the "can-do" attitude. We may not be able to do away with organisational politics completely but once the people are customer-focused then it is easier to channel most of the energy and efforts in ensuring total customer satisfaction within the shortest possible time through teaming.

• Leveraging the Resources

 

 

The various resources including men, machines, materials, money and management have to be effectively leveraged to ensure high performance and profitability. In an AVE these resources are accessible to people who need them rather than having to have multi-level and multi-department structure which hampers responsive and effective communications. 

At times we may also have to co-operate with the competitors. 

• New Product Development 

 

 

R&D is a critical strategy for manufacturers to remain competitive in the long term. Without which, the manufacturers can only possible take a short term view of the business or be prepared to be phased out of the market. New product development and time-to-market are competitive weapons. We have to attract people who are committed to innovation and creativity for us to excel in R&D.