Strengthening the Collaboration among Eastern European SME Clusters by implementing an Open-Source based Tool and support platform Ali Imtiaz 1 , Oliver Budde 1 , Jannicke Baalsrud Hauge 2 1 Research Institute for Operations Management (FIR) at RWTH Aachen University, Pontdriesch 14/16, 52062 Aachen, Germany, {ali.imtiaz, oliver.budde}@fir.rwth-aachen.de 2 BIBA, Bremer Institut für Produktion und Logistik, Hochschulring 20, 28359 Bremen, Germany, baa@biba.uni-bremen.de Abstract The Tool-and-Die making industry in Eastern Europe faces stringent competition due to globalization. Most European companies are highly specialised SMEs producing complex one-of-a-kind products used in mass production. Inter-organisational collaboration not only requires changes in organisational structures but also the ability to exchange business information, retrieve it, access it, process it and electronically communicate it to all the actors involved in any given business transaction. To do this, SMEs require collaborative ICT tools and internet platform that enable seamless information exchange. There are a number of ICT solutions and middleware which support such collaboration, but these are often not affordable or suitable for SMEs. This article presents an initiative aiming at improving the collaboration ability of SMEs by introducing a concept comprising a specific business process reference model and a modular open source-based collaboration tool with ERP/CRM functionalities, which can be integrated into already existing software systems allowing seamless information processing. Thereby, it will strengthen the competitiveness of Eastern European SMEs as well as improve their ability to collaborate. Keywords Collaboration, open source, business model, enterprise resource planning 1 Introduction In the wake of Globalization, the Eastern European small and medium size manufacturers (SME) are facing ever-increasing competition from the larger and multi-national players. Even though the labour costs are currently lower than in Western Europe, Eastern European manufacturers cannot compete against the low wages and price advantages from Asian competitors. In any case, the manufacturing companies from Eastern Europe need to be able to offer high quality products with a compatible price. The need of fulfilling customers claims with quality, price and delivery lead time may only be economically justifiable through collaboration with other companies. An analysis of a typical manufacturing SME in Europe shows that most of them already carry out their activities in geographic proximity to other similar companies, in what are typically called “Industrial Clusters”, or also known as “local productive systems”, “industrial districts”, “industrial growth nodes”. In most cases, these communities were formed due to favourable socio-economic conditions found in a specific geographical area at some point in time (e.g., initial availability of a certain raw material or of certain craftsmanship skills). However, hardly any efforts have been undertaken in adapting different organisational structures as well as to develop affordable collaboration tools to improve inter-organisational efficiency. 2 Relation to Existing Theories and Work Clusters are typically product-oriented communities. Within clusters, there are companies focusing on different stages of the manufacturing cycle (e.g., treating raw materials, assembling).