The Resilience of an ETO Archetype to Demand Shocks

Overview & Synopsis

This paper presents an ETO archetype and upgrades a previous ETO model by incorporating a design rework feedback loop. This archetype is developed based on literature findings and tested via transfer function analysis. We assess the system’s resilience due to a demand step change via the Integrated Time Absolute Error (ITAE) metric to determine the best proportion controller value (τOB) for the system while minimizing variance in order book, lead time and work rate. The contribution of this paper can be summarized as follows. 1. We enhance a previous archetype to include design rework scenarios hence extending the ETO archetype’s potential exploitation. 2. We introduce ITAE to measure the resilience of an ETO system. 3. We determine the appropriate time to correct order book error (τOB) to tradeoff speed of response and variance for different rework ratios, which can be used to improve the system’s resilience. This research also has the following limitations. 1. This study adopts simulation methods to obtain best τOB results; further research is needed to assess resilience by using analytical tools. 2. This paper only measures the resilience of the system under demand side disturbances; further research should measure the system’s resilience to supply and internal process disturbances. 3. As there is a tradeoff between work rate resilience and lead time resilience, further research could explore how to deal with this tradeoff by introducing an objective/cost function into the model.