A pragmatic approach for optimal selection of plant-specific process plans in a virtual enterprise

With the globalization of economic markets and the individuality of market demands, virtual enterprise is becoming an increasingly important organization since it can respond rapidly to market changes and make resource sharing more efficient among manufacturing partners. In this environment, potential partners may be located at different geographical locations and possess different core competition capabilities. Thus, how to select an optimal set of partners capable of responding to a given market opportunity—a new product or even a component, has become a challenging research topic for carrying out agile manufacturing strategy. This paper proposes a comprehensive cost function and establishes its mathematical formulation. The comprehensive cost function considers not only direct-processing cost, but also indirect-processing cost (transportation cost and time-factor cost including both earliness and tardiness). Based on the cost function, this paper presents a pragmatic approach for optimal process and partner selection in a virtual enterprise. This approach is composed of three stages: qualitative pre-qualification, quantitative evaluation, and comprehensive examination. A case study is implemented to illustrate these three stages. Compared with some traditional approaches in normal engineering activities, this approach can be expected to contribute to more efficiently reducing manufacturing cost, improving product quality, and shortening lead-time.