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Due to frequently changing demands from customers, global competition and technological advances, it has been stated that the next generation of advanced production technologies will rely on cooperation and collaboration of enterprise (business) partners to share expertise, costs and risks (Hsieh & Lin, 2014). The changing customer demands require that enterprises mobilize their resources to quickly develop a product to meet these demands. This can be achieved if enterprises in competition work together to deliver the product instead of each trying to deliver it. Each of them brings their expertise into the collaboration. This collaboration where each enterprise brings in its core competency as suggested in (Unver & Sadigh, 2013) is referred to as a virtual enterprise (VE).
A numbers of researchers have paid more attention to the formation phase of the VE life cycle, which perhaps explains the importance attached to it. The formation phase of a VE can be divided into four steps (Tolle, 2004; Afsarmanesh & Camarinha-Matos, 2005; Guerra, 2006). These steps are: (1) Identification of the problem, (2) Identification of the core competencies required to develop a solution to the problem, (3) The evaluation and selection of the partner companies capable of delivering the required core capabilities and (4) Integrating the core capabilities of the partners. Among these steps, the partner evaluation and selection step is the most crucial one and is the main focus of this study. The first two steps are problem specific. The integration phase identifies the functional requirements for VE after identifying the required partners’ core competencies.
A typical application area for the VE paradigm is in industrial manufacturing. Nowadays, most manufacturing processes are not carried out on a single line. Companies tend to focus on their core competencies and join efforts with others, in order to fulfill the requirements of new products and associated services demanded by the market. In a VE, every enterprise is just a node that adds some value to the process. Although most classic examples of cooperative networked organizations can be found in some particular business domains such as the automotive industry, this tendency is spreading to many other areas including the food and agribusiness industry, electronics and civil engineering.
Similar to manufacturing industries, the need to remain competitive in the market also forces service provider companies to seek alliances outside their core competencies when additional skills / resources are needed to fulfill business opportunities. For instance, travel agencies typically offer aggregated or value-added-services composed of components supplied by a number of different organizations. To “book a complete journey plan”, services may include several means of traveling, several hotel bookings, car rentals and leisure tour bookings. A networked cooperation must exist among the many different organizations (Afsarmanesh & Camarinha-Matos, 2000) to enable collaboration.