Factories are exposed to various internal and external uncertainties that can lead to short-term and difficult-to-predict shocks. Due to existing vulnerabilities, these sudden shocks can cause massive disruptions in operations.
One example of this is the coronavirus pandemic, which has significantly disrupted global supply chains. Companies were confronted with a series of enormous challenges resulting from production losses, transport restrictions, and fluctuations in demand. The energy crisis also poses a significant threat, as it leads to drastically rising operating costs and instability in energy supply. The blockage of the Suez Canal also illustrated the vulnerability of global trade routes, as a single stuck ship significantly disrupted the international flow of goods.
These crisis situations highlight the fact that supply chains are vulnerable beyond company boundaries. Implementing effective strategies to cope with these shocks and uncertainties is crucial to maintaining competitiveness. Companies that lack the ability to adapt quickly and efficiently risk being forced out of the market in the worst-case scenario.
Existing approaches to maintaining business continuity
Various approaches and concepts already exist that aim to maintain the operational continuity of production systems. However, these approaches lack a holistic view of the various types of transformability – robustness, flexibility, and changeability – and adaptability, also known as resilience.
Furthermore, such approaches are often only implemented in response to disruptions that have already occurred and are generally not user-oriented. In recent years, numerous companies have built up their material inventories based on the assumption that severe delivery problems were to be expected. These high inventories prove to be redundant in regular operations as well as during regular fluctuations in goods receipt and demand, but are associated with high storage costs.
Promising: promoting organizational resilience
Promoting organizational resilience is considered a promising concept for ensuring that manufacturing companies are prepared for sudden changes in conditions and can quickly restore operational capability in the event of disruptions.
In order to manage the effects of shocks, it is necessary to implement a strategic control instrument in the sense of a changeable and adaptable organization. To ensure operational capability in the event of a disruption, the use of a business continuity management system (BCMS) is recommended. In the context of a BCMS, goals for maintaining operational capability are set in line with organizational policy in order to achieve defined results.
Proactive resilience management
In order to investigate how companies can holistically increase their ability to adapt and change through proactive resilience management, the Institute of Production Systems and Logistics (IFA), together with the Institute for Information Technology (OFFIS), deepIng business solutions GmbH, and Youse GmbH, is developing a standardized resilience management system in the PARMa research project that enables companies to act quickly and purposefully in the event of sudden shocks and uncertainties.
Three specific application scenarios were selected for the approach, which are based on the main processes in the supply chain of manufacturing companies: procurement, production, and product dispatch.
In procurement, causes of disruptions include supplier failures or natural disasters, material shortages due to raw material scarcity, delays due to logistical challenges, or inefficient warehousing processes. In production, disruptions can be attributed to machine or plant failures, unreliable spare parts supply, human error, or software problems, among other things. In product dispatch, transport delays, strikes, fluctuations in demand, inaccurate sales forecasts, or market changes can trigger a failure to meet planned production volumes. Overproduction can cause rising storage and capital commitment costs for companies, while underproduction can lead to delivery bottlenecks and customer dissatisfaction. In the long term, such imbalances can impair the efficiency and competitiveness of companies, increase costs, and damage customer confidence.
Multidimensional and dynamic view of resilience
The novelty of the PARMa research project lies in its holistic approach to assessing types of changeability. The aim is to enable companies to achieve the best possible resilience. Existing methods currently offer only limited or isolated solutions. These are either purely qualitative in nature, one-dimensional in design, static and unable to learn, or require considerable effort to gather information.
However, in the PARMa project, researchers are developing an assessment methodology that both measures an organization’s degree of resilience and evaluates the effectiveness of measures to promote its adaptability and changeability. On this basis, structures are to be created that promote an agile and sustainable organization. Instead of viewing resilience merely as an ability, as has been the case up to now, the resilience management system takes a holistic approach in order to react proactively to disruptions and ensure the operational capability of the production site.
Identifying potential disruptions and deriving countermeasures
The IFA is currently cooperating with OFFIS to identify the elements of the production system that are susceptible to disruption and to systematically cluster disruptions according to their probability of occurrence, duration, and intensity.
The aim of this approach is to transfer the results into a fault model. At the same time, the IFA is developing a model for configuring production systems, consisting of system elements, parameters to define these elements, and causal relationships that are of fundamental importance for describing the production system. In addition, a methodology for determining the actual resilience level of manufacturing companies is being developed. The obtained results are combined by OFFIS in a simulation model in order to perform a simulation-based assessment of the effects of disruptions and corrective actions.
The corrective actions derived from the simulation study to increase adaptability are consolidated in a so-called resilience toolkit. Based on this catalog of measures, an iterative resilience management system is being developed. deepIng is creating a visualization application that displays the company’s degree of resilience and will be made available to the application partners.
Targeted measures to proactively ensure operational capability
The resilience management system, the central outcome of the research project, is designed to enable manufacturing companies to establish agile organizational structures in order to increase adaptability and respond proactively to potential disruptions to operations. The methodology currently being developed to determine the actual degree of resilience of manufacturing companies will ensure a holistic view in order to achieve the best possible adaptability.
This will enable manufacturing companies to take targeted measures and ensure operational capability in the event of short-term and difficult-to-predict shocks.
