Manufacturing in Networks- Competitive Advantages for Virtual Enterprises Dr.-Ing. Dipl.-Wirt.-Ing. W. Sihn Fraunhofer Inst. ! Manu! Engineering and Automation (IPA) Nobelstr. 12, D-70569 Stuttgart, Phone: +49 711 970 1964, Fax: +49 711 9701002, e-mail address: whs@ipa.fhg.de Abstract Typical aspects of global competition are the regionally different production factors and varying demands on product function, quality and perfonnance. Success is not only a matter of consistent market orientation but increasingly depends on regional contributions to production and employment. Crucial success factors are cooperation, the availability of components in a country, the use of the existing infrastructure, etc. Thus, many companies are building up international production capacities or shifting them to foreign regional markets to sell their products not only at home but also in international markets. They fonn global networks to which independent partners contribute their individual core competencies. The following article describes approaches to activate perfonnance potentials absolutely necessary in the global competition. Virtual enterprises allow a close-to- the-customer production together with extremely flexible capacities and short shipping times. Especially for SME this is a chance to participate in the global competition to their maximum advantage. This article shows the benefits of virtual enterprises. It describes the life cycle of a virtual enterprise dealing with key aspects from the creation to the management of such an organisation. Keywords Virtual enterprises, small and medium-sized enterprises, cooperating networks The original version of this chapter was revised: The copyright line was incorrect. This has been corrected. The Erratum to this chapter is available at DOI: © IFIP International Federation for Information Processing 1998 10.1007/978-0-387-35321-0_72 U. S. Bititci et al. (eds.), Strategic Management of the Manufacturing Value Chain