This document discusses dynamic manufacturing networks (DMNs) and was presented at the APMS 2012 International Conference in Rhodes Island, Greece on September 24, 2012. It identifies benefits and risks of DMNs, such as cost reductions through optimized production planning and inventory cuts, as well as risks around information security, network dissolution, and competitive threats. The document concludes that identifying benefits and risks is important to attract organizations to DMNs and establishing governance rules is key to efficient network management.

1. Ourania Markaki
Panagiotis Kokkinakos
Dimitrios Panopoulos
Sotirios Koussouris
Dimitrios Askounis
APMS 2012 International Conference – Rhodes island, Greece

2. rapid
change &
increased
use of
technology
dramatic & short
unanticipated
changes in product
demand lifecycles
Challenges
fierce global time
competition compression
complexity
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

3.  Today, enterprises have yet exhausted most of the efficiencies available
internally or within their existing supply chain.
 Manufacturing enterprises and supply chain initiatives must yield greater
improvements.
 Structural changes are needed to streamline the flow of supply and production
and 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.
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

4.  … 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 or
more product components that can be
assembled into final service-enhanced
products under control of a joint production
schedule.
 Production schedules are monitored
collectively, while products are composed
and (re-) configured on demand through
dynamic and usually ad-hoc inter-
organisational collaborations that can cope
with evolving requirements and emergent
behaviour.
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

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

6. Partner BP Product BP
 business and technical information  information on equipment, human
to facilitate partners’ selection by a resources and materials necessary
specific contractor. for producing a standard or
configurable product.
Static metadata: Dynamic metadata :
- company background - current mean delivery / - product definition information:
- products/ services production times what is needed to make a product
- capabilities/ skills - available stock
- processes - product capability/capacity information:
- new potential what resources are available to
- qualifications use for production
- local/global SLAs - product schedule information
what to make - which resources to
Quality Assurance BP use-when
 real-time data for operations - production performance information
what was produced - what
analytics to optimise manufacturing resources were consumed
networks.
Metrics of:
- product (integrity, conformance to standards/ End2end Process BP
specifications, cost),
 spans all customer interactions
- process (process manufacturing
parameters, documentation, maturity, security level),
operations, production lines, and
- partners (reputation, certification, organizational and physical material transactions.
logistics capabilities, IT systems efficiency) and
APMS 2012 International Conference – Rhodes
- network quality (partner interoperability, network island, Greece
complexity, environmental requirements, capacity 24 September 2012
utilization)

7.  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
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

8. Cost
Reduction
Time Operations’
Savings enhancement
Benefits
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

9.  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.
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

10.  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 demand
and 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 B2B
marketing.
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

11.  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.
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

12.  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.
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

13.  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
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

14.  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)
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

15.  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
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012

16. omarkaki@epu.ntua.gr
APMS 2012 International Conference – Rhodes island, Greece
24 September 2012