Project background

The importance of SMEs for the European economy and social cohesion is widely recognised, as they give a major contribution for the European GDP, employment and innovation potential.

To successfully compete with more aggressive, lower labour cost countries, European SMEs will have to increase the added value of their products and services. But they are still clearly more and more exposed to some critical problems, such as the need to consider each customer individually, through customised products and processes, and the capacity to react to a changing environment, beyond lean manufacturing.

In more traditional hierarchical networks, small companies have to perform specific tasks defined by the larger companies. This limits their differentiation possibilities while forcing them to compete head-to-head in a global market, including lower labour cost countries. Thus, European industry has to focus on higher added-value segments characterized by low volume, large variety and complex and customer centred production.

In this context, the traditional strengths of European manufacturing such us customer orientation, flexibility, productivity, quality, scientific and technical expertise, design and positive brand image are not enough. SMEs will have to adopt new business models and to establish dynamic and non-hierarchical networks to respond to market opportunities, assuring quick response, fast time to market, differentiated offerings and competitive prices.

However, there are currently no proven, effective methodologies, approaches or tools to support SMEs in creating, managing and dissolving this type of dynamic and non-hierarchical networks.   

Such methodologies and tools should promote and enhance SME collaboration in partner identification and selection, network setup and configuration, product design and manufacturing, supporting innovative forms of distributed decision making in aspects such as capacity management, optimisation of production resources and logistics management.

In order to create a sound, basic layer for these tools, standards should be selected, disseminated and promoted for supporting communication and collaboration at levels such as partner selection and identification, network setup and configuration, product definition, business information and manufacturing.

These approaches are relevant to many industrial sectors and especially relevant for high-variety low-volume businesses, tailored for manufacturing complex products which are composed of several parts and characterised by multiple process flows and assemblies. Such products are found in domains such as high-technology industrial machinery and new technical garment products, among others.

In this context, Net-Challenge aims at supporting the implementation of non-hierarchical European business networks and thus better harness the power of European technology and competences by providing highly innovative methodologies, processes and decision support tools.

The project approach will strongly depend on three representative real Business Cases (Textile and apparel, Footwear and Machine tools), and on the know-how acquired in previous projects and experiences in hierarchical networks. These Business Cases are typical scenarios of complex products manufacturing and intend to ensure a wide applicability of the project results. For example, in the footwear case, the pilot plant is already using several results from EUROShoE, an EU project whose aim has been the definition and implementation of an innovative business model for the production of customized footwear. In this case, the Net-Challenge approach will allow the enlargement of the demonstrator to more open and dynamic non-hierarchical business networks and will provide advanced and distributed decision support tools.