The extended manufacturing enterprise: its nature and its needs

The Extended Manufacturing Enterprise represents, as a way of combining manufacturing operations, a distinct alternative both to pure markets and to pure command structures. It retains the competitive disciplines and efficient allocation of the market, and adds to this the strategic control of direction characteristic of command structures. The Extended Enterprise is characterized by the information channels built between those participating in its activities. By sharing knowledge a supplier and a customer can much more readily adapt to changing needs and circumstances: not only do they pool their technical and commercial know–how, but they can act in a co–ordinated manner when, for instance, new products are introduced. They can also dispose of many of the costly forms of insurance otherwise needed to cope with uncertainty – intermediate inventories and inspections, for example. The idea of the extended enterprise offers a unifying idea to explain and justify the application of such technologies as electronic data interchange, engineering data management and knowledge–based systems.