A value optimising structure in virtual enterprises for manufacturing systems

The significant increase in inter-organisational collaboration during the last two decades has led to the development of the so called Virtual Enterprises, defined as an organisation which can optimally utilise operational internalisation and externalisation to improve its performance. Such Virtual Enterprises are different from traditional companies in that they can achieve tasks beyond their internal capacity, and focus more resources on core competencies thus becoming agile. To transform a traditional organisation into a virtual enterprise, it is necessary to create an alliance management function for managing alliance operations. This paper describes the development of an externalisation and internalisation (EI) management function as the core of a virtual enterprise, organised around an organisation’s value stream function. This value stream oriented structure further ensures that the optimisation is value adding.