Enabling supply chain cooperation with information sharing

Abstract

Virtual Business System (VBS) is a system with software and hardware components designed by Raytheon employees to improve operational performance by facilitating and reinforcing lean behavior. It has helped contribute to four years in a row of twenty-percent yearly reductions in costs by providing near real-time metrics information, visibility into the details underlying those metrics, and publishing results to provide accountability for continuous improvement efforts. Originally designed for use in a manufacturing cell, its use has since expanded to include project management, engineering, quality, and other functions. This thesis examines how VBS has contributed to internal alignment at Raytheon and explores whether it can fulfill Raytheon's external supply chain coordination needs as well. VBS was successfully upgraded to allow supplier access over Citrix; the next step is to conduct a pilot implementation to test the system in practice. As a "homegrown" system, VBS can be made to do nearly anything, and in time could fulfill Raytheon's supply chain integration needs. In the near term, additional work is likely to be necessary in the areas of data access control, user interface, and extension from stand-alone system to a peer-to-peer information sharing network. The VBS team will also need to continue gathering executive sponsorship and support in order to motivate the necessary change in business processes. A number of lessons applicable to supply chain integration systems in general can be learned from the success of VBS.

(cont.) These include: the importance of ensuring client control and security of the data; the potential gains made possible by sharing functionality in addition to data; the need to include information about improvement processes when sharing information; and the critical need that the application remain flexible and responsive to change in user needs.