Collaboration: Connecting Market Needs with Skills

“Competency rallying”—where companies come together to make up for manufacturing capability gaps and win a specific piece of business—is already working in Europe. Since 1996, one transnational manufacturing culture has utilized the concept, in a community set on Lake Clarence (also called the Bodensee) in the center of Europe, embracing parts of Germany, Switzerland and Austria. Dubbed the “Virtuelle Fabrik,” the system involves precision machining and specialty manufacturing firms, whose clients might be a carmaker that wants a special steering wheel or a cell phone maker that wants a button.

The Virtuelle Fabrik provides a system for connecting market needs with the skills of all the participating firms (or at least a subset of the firms, depending on the project). When a customer approaches firm A with a concept, that firm can circulate the idea around the entire group. Firm A organizes the response from the point of view of getting a satisfactory product into the hands of the customer at a good price and in a short time.

According to Kevin Crowston of Syracuse University, who recently wrote a report on the Virtuelle Fabrik with Bernhard Katzy of the University of the Federal Armed Forces, Munich, the Fabrik was organized by using small teams to develop the basic rules of participation. Unnecessary duplications, like inspections each time a part crossed a firm’s boundary, were identified and rooted out. Each guideline was voted on by all the project partners.

The result: More products flow more rapidly through the entire Fabrik. The increased product flow rate enhances the development of competencies within the Fabrik partners, effectively stretching the skill sets. Since firms know they can find partners for most of the functions in the productive cycle, some have been able to become super-specialists, raising the value of their services.

Katzy and Crowston point out that the future of such associations across the globe depends in part on whether CIOs can provide the tools needed to build trust and community across cultures.

A possible example of such a tool might be video walls—immersive videoconferencing in two or more offices in different parts of the world, left on continuously, so people could build relationships by chatting.

Recently, four other regions in Switzerland and Germany have organized manufacturing networks on the model of the Virtuelle Fabrik, Crowston reports.