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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 dispersed geographically and possess different core competencies. Thus, how to select a set of plant-specific process plans capable of optimally responding to a given market opportunity has become a challenging research topic. 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, a pragmatic approach is presented for optimal plant–process combination selection in a virtual enterprise. This approach is composed of three stages: qualitative pre-qualification, quantitative evaluation and comprehensive examination. An example is implemented to illustrate these three stages. Compared with some traditional approaches in normal engineering activities, this approach could be expected to contribute more efficiently to reducing manufacturing cost, improving product quality, and shortening lead-time.