benefits and risks in dynamic manufacturing networks

OuraniaMarkaki

Panagiotis Kokkinakos

Dimitrios Panopoulos

Sotirios Koussouris

Dimitrios Askounis

APMS 2012 International Conference – Rhodes island, Greece

Challenges

rapid change & increased

use of technology

short product

lifecycles

time compression

complexity

fierce global competition

dramatic & unanticipated

changes in demand

24 September 2012APMS 2012 International Conference – Rhodes island, Greece

Today, enterprises have yet exhausted most of the efficiencies availableinternally or within their existing supply chain.

Manufacturing enterprises and supply chain initiatives must yield greaterimprovements.

Structural changes are needed to streamline the flow of supply and productionand improve quality and responsiveness to market demands.


Upgrade supply chains to Dynamic Manufacturing Networks

= dynamic alliances among manufacturing entities for gaining mutual benefits

DMNs evolve and particularize the notion of VOs in the manufacturing sector.

… a temporal or permanent coalition, comprising production systems of geographically dispersed SMEs and/or OEMs that collaborate in a shared value-chain to conduct joint manufacturing.


Each member of the DMN produces one ormore product components that can beassembled into final service-enhancedproducts under control of a joint productionschedule.

Production schedules are monitoredcollectively, while products are composedand (re-) configured on demand throughdynamic and usually ad-hoc inter-organisational collaborations that can copewith evolving requirements and emergentbehaviour.

Partner BP

business and technical information to facilitate partners’ selection by a specific contractor.

24 September 2012

APMS 2012 International Conference – Rhodes island, Greece

Static metadata:- company background- products/ services- capabilities/ skills- processes- new potential- qualifications- local/global SLAs

Dynamic metadata :- current mean delivery /

production times- available stock

Product BP

information on equipment, human resources and materials necessary for producing a standard or configurable product.

Quality Assurance BP

real-time data for operations analytics to optimise manufacturing networks.

End2end Process BP

spans all customer interactions manufacturing operations, production lines, and physical material transactions.

- product definition information: what is needed to make a product

- product capability/capacity information:what resources are available to use for production

- product schedule informationwhat to make - which resources to use-when

- production performance informationwhat was produced - what resources were consumed

Metrics of:- product (integrity, conformance to standards/

specifications, cost),

- process (process parameters, documentation, maturity, security level),

- partners (reputation, certification, organizational and logistics capabilities, IT systems efficiency) and

- network quality (partner interoperability, network complexity, environmental requirements, capacity utilization)

Identification of typical industrial & organisational operations of SMEs belonging to several sectors

Grouping of operations per department and type (internal/external)

Identification of the operations that get re-organised or indirectly influenced by a DMN

Tracking down possible benefits of adopting the DMN methodology –classification per operation type/department

Identification of problems and risks imposed per industrial operation/department

Identification of risk avoidance and mitigation strategies.

Consolidation of the enterprise specific benefits and risks on a higher, network level perspective



Benefits

Time Savings

Cost Reduction

Operations’

enhancement

Time-to-market reduction: new product lines can reach the market faster.

Optimized design of end products and individual components: designers of all parties can work simultaneously on the design of the product, its components and their interactions.

Collaborative product development: DMN partners collaborate on the product’s operational and technical specifications.

Network-optimized production planning and scheduling: DMN partners’planning and scheduling processes are synchronized and streamlined.

Fast selection of suppliers for each project/product and network setup: the DMN platform identifies and proposes straight away the optimum set of suppliers for the given circumstances.

Instant reconfiguration of the suppliers’ network: reconfiguration of the whole production plan by adding new suppliers or by assigning more jobs to the existing ones.

Automated communication and data exchange with suppliers/clients and partners: DMN platform automates information exchange, reducing thus mistakes that cause production flaws and delays.

Increased visibility and access speed to network/manufacturing data: collected production and logistics related data enable the rapid generation of reports, and accelerate any reconfiguration decision.


Cost-optimized selection of suppliers: the DMN platform indicates the set of suppliers

who can provide the required components in time and at minimum cost.

Cutting down inventory costs: individual suppliers’ manufacturing processes are

aligned, reducing the required stock and minimizing thereby inventory costs.

Cost-optimized management of resources: accurate and timely information shared

within the DMN allows the optimal and dynamic allocation of the available resources, so as to meet demandand performance requirements.

Reducing marketing expenses: availability of suppliers’ competencies and capacity

information in a structured way through the DMN Blueprint Model allows cutting down expenses for B2Bmarketing.


Focusing on core competences: DMN partnerships are created based on each partner’s

expertise; therefore DMN members invest in their core competencies and develop advanced skills and capabilities.

Product/services co-creation: the DMN environment facilitates the collaboration and

coordination of different parties in a manufacturing process.

Cost/risk sharing with collaborating partners: in DMNs most costs and risks are

shared among all the partners involved, bringing thereby a crucial change to usual way projects are carried out.

Monitoring of product development and manufacturing operations: alarms

are triggered in case a task/operation is not performing as planned, enabling efficient management and alternative solutions’ exploitation.

Reduction of design and production flaws: these are decreased thanks to the enhanced

collaboration among engineers achieved and an early warning system.


Optimal selection of suppliers and collaborators: partner selection, based on core

competencies and actual capability to deliver specific results in more successful collaborations.

Improved quality throughout the complete product lifecycle: continuous KPIs

monitoring and application of SLAs result in enhanced product and processes’ quality.

Know-how exchange, shared knowledge management and access to new technologies: close collaboration within a DMN allows knowledge exchange on products and

technological advancements.

Access to new customers/markets: the wide range of sectors/fields covered in the DMN

allows each enterprise to expand its customers’ base.

Integrating diverse enterprise IT systems for better, holistic and efficient production: the DMN platform interconnects enterprise software with shop floor systems.


Information security and trust! unwanted and malicious attacks and disclosure of corporate practices or other critical

importance data

- security mechanisms defining different access rights, contractual agreements on information confidentiality

Poor configuration, design and management of the DMN! non-valid or deficient information for partner searches, negotiations and for coordinating

the complex grid of DMN inter-relationships

- accurate information on the actual manufacturing and delivery capacity of each DMN member and global visibility across the whole network (DMN BP Model)

DMN dissolution! withdrawal of a key supplier/manufacturer

- contracts to legally bind DMN members not to be able to waive their DMN responsibilities and obligations at will


Transition issues! resistance to change, modifications to procedures and IT systems

- set of adapters interconnecting the IT systems of all DMN members to the DMN platform/ BP Model facilitating information exchange

Competitive threats! R&D knowledge misuse after partner withdrawal, DMN dissolution

- legal agreements on the exploitation of IP, foreground and background knowledge of partners and knowledge generated during the operation of the DMN

Loss of DMN/ partners’ reputation:! inability of a partner to deliver as planned

- appropriate partner selection, early detection of deviations in the production plan (BP Model)


The identification of the associated benefits and risks is the first step for attracting organizations and enterprises into embracing the vision of DMNs.

The drivers for setting up or for participating in a DMN are in most cases a mixture of several benefits.

The benefits and risks specified may have a different impact on DMN enterprises with different goals and expectations.

It is important therefore to establish rules and norms for managing a DMN and operating it efficiently.

Future work lies in the directions of: Providing hard facts on the ROI of establishing or participating in DMNs

Verifying the identified benefits/risks to further optimize the IMAGINE DMN methodology


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benefits and risks in dynamic manufacturing networks

Technology

joint manufacturing

manufacturing enterprises

manufacturing entities

manufacturing sector

production systems

production lines

production schedules

product definition information