Chandrashekar and Schary state that the virtual Web-based supply chain is emerging as a new form of industrial organization. They present the concept as a juncture of the virtual organization, Web-based communication, and the application service provider (ASP). The virtual organization is a familiar concept in many industries, even without electronic connections. Web-based communication provides access and networks with new institutions, and ASPs make rapid change and flexible connections feasible. These help establish focus, flexibility, and rapid response to change in demand and customer requirements.
In one sense, the future has already arrived. Companies have demonstrated the ability to operate with minimal production facilities, relying on their suppliers. They have introduced Web-based customer order systems leading directly into production planning, and now use systems where customers design their own chips for production. Detailed discussions of each area were presented by the authors. Examples and illustrations were also provided, as was a set of projections for the future.
The authors conclude by stating that the virtual chain developed as the conjunction of the virtual organization, IT, and electronic communication. Although this is a new paradigm, it is also an extension of an older form of organization, which has taken on an expanding role through its ability to connect organizations as an integrated short-term system to supply markets. Agility and the power to select markets and match their requirements through high-level competencies are new outcomes. How far collaborative processes penetrate the virtual chain will be specific to the situation and technology. The virtual chain itself appears to be emerging as an independent vehicle. This convergence between IT and supply chains will require a combination of management skills.