Gluing together the links of the traditional commercial supply chain over the Internet is the aim of a new project at NUI Galway.

With the development of a truly digital economy the traditional vertical structure of businesses such as Digital where a company did everything from chip manufacturing to consultancy is gone according to Prof Gerard Lyons, professor of information technology.

He said how companies operate in many sectors has changed completely - companies such as Gateway and Dell have broken the mould in the computer industry by concentrating on just assembly and testing of computers with direct telesales as their main sales avenue.

He said hundreds of different companies may now comprise the supply chain, with larger firms outsourcing different parts of operations and contractors specialising in a specific area along the assembly line.

Prof Lyons said this fragmentation has resulted in the existing supply chains becoming less efficient and less adaptive to change.

The number of suppliers and manufacturers which one has to deal with before a product gets to market can seriously impair both cost effectiveness, efficiency and ultimately quality.

For large diversified companies, the fact that many firms do not use the same systems to communicate can pose serious problems for them.

NUIG hopes to develop little software robots that will live on the Internet and talk different languages to the many different software and computer systems of organisations.

The project has received £500,000 funding from Enterprise Ireland to develop the "glue" that will reconnect supply chains over three years.

The potential savings of such a software system for business are huge according to Prof Lyons, because companies would not have to abandon legacy systems or even upgrade reasonably new systems.

He said at present, the key method of dealing with the problem is for companies to implement SAP across their whole company but for large organisations the costs of implementation can be substantial. "Our view is why should there be a need to do this if you can simply use enabling software to connect the front end with legacy systems in the back office," said Prof Lyons.

He said that installing the UCG system when it has been developed will cost a fraction of the completely new systems that companies are installing currently to make their computer systems homogenous and able to communicate with other organisations.

The team will develop computer generated models of these supply chains based on systems dynamics, game theory and object modelling. From this the researchers will be able to evaluate how the chain operates and how the different parts interact with each other.

Prof Lyons said the modelling will identify "desirable interactions" between all the activities of the supply chain including manufacturing, distribution, supply and demand and consultancy.

This will identify the area where a software glue is most needed in the chain so the team can develop the software robots to link the different fragments.

Then the team plans to implement the software system on a pilot basis in three areas including financial services, manufacturing and software development.

The software would allow an integrated systems infrastructure in a company. This means that it could conduct enterprise resource planning, purchasing, supply and demand management among others using existing systems but using the new software to integrate with their suppliers and sellers.

The team will use a distributed objects or distributed systems approach to develop the software which involves writing software as independent components.

In other words, this means writing it in a neutral form which is not dependent on any one computer language.

Between eight and 10 full-time academics are currently involved in the project which will run over three years and Prof Lyons said the department will recruit up to seven more PhD and postdoctoral level researchers.

The software will not only be applicable to companies trying to transact business on the Internet, but equally to organisations who have a company intranet and have different computer systems within their own operation that are not compatible with each other.

Prof Lyons said the initiative would basically develop a middleware infrastructure allowing a plethora of different computer software operating systems along the supply chain to communicate with each other.

He said the project had already signed up industrial partners in each of the industries in which the project plans to provide its software.