Organizing a virtual manufacturing enterprise: an analytic network process based approach for enterprise flexibility

Abstract

Virtual manufacturing is a dynamic enterprise structure that will enable future competitiveness in the fast changing business environment. This is made possible through quick IT based integration of flexible and core competent business entities capable of providing value-added product and services. Flexibility elements represent change capabilities of enterprise wide processes and resources in time and cost dimensions. Value chain considerations require synergy among the participating flexible resources. Also decision information synchronization delays need to be managed so that other entity flow processes in the enterprise remain well synchronized. This may require a capability of dynamic changes in flexible structures leading to effective virtual enterprises. There is a need to develop suitable enterprise architectures for virtual enterprises that offer an increasing focus on agility. Infrastructure support for integration of flexible capability to attain synergy among resources is necessary for enterprise agility. We conceptualize virtual manufacturing (VM) as an integrating infrastructure of flexible resources made possible through alliance of enterprises that are individually core competent in specific business function. Such a VM can attain the required cost, flexibility and responsiveness characteristics in its operations to provide solution to the demanding customer in a global dynamic market. Modelling frameworks depicting these composite flexibility states have complex and tacit interrelationship with plural business goals. Analytical network process (ANP) has been used to model the interrelationship of different decision domains with a view to prioritize enterprise wide flexibility dimensions. The ANP modelling framework takes into consideration the interdependency among sub-strategies. We demonstrate through sensitivity analysis that strategic shift is required to accommodate changes due to dynamic condition in the business environment.