A risk based approach to support the supplying of components in a MTO assembly process

Product customization is becoming more and more an option required by the customers and, when referring to complex items, pursuing this path could have a strong impact on the way companies have to manage the products and the associated processes. In this context, a Make To Order (MTO) and Engineer To Order (ETO) paradigms are viable approaches. Using these paradigms, the coordination between supplying and manufacturing has a prominent importance. A missing component during the production phase can cause significant delays and disruptions in the plans and, consequently, delays respect to the due dates negotiated with the customers. Due to the intrinsic uncertainty associated to the selection of customization options by the user, the supplying of the components and the production/assembly process, company managers addressing this coordination problem have to ground on risk measures supporting the selection of the right supplying option, aiming at minimizing the probability of missing components. In this paper, we present an approach to support this selection in the production and assembling of complex products grounding on the definition and calculation of two indicators, the Risk Index and the Criticality Index. The first one addressing the risk associated to the supplying of a component through different supplying alternatives, the second one providing an assessment of the criticality of the coordination between the supplying and assembling phases together with the specific risk aversion. An application to a real MTO industrial case is also provided addressing the production of machine tools.