Simulating the integration of original equipment manufacturers and suppliers in fractal environment

Partnerships and collaborations between companies (OEMs) and suppliers are not new. Many companies rely on partnerships with key suppliers to improve operational effectiveness through minimized inventory, information and culture integration to boost their lean/ agile credentials. The Fractal Manufacturing Partnership (FMP) is new manufacturing strategy, whereby OEMs form relationship with key suppliers. The former cede autonomy of non-core activities to tried and tested suppliers, while concentrating on their core competencies. The latter become assemblers of their components with heightened sense of responsibility while co-owning the OEMs' facility. The objective of this relationship is maximization of flexibility ability to respond swiftly and robustly to changes in environment, requiring physical network and more importantly, cultural network linking the people rather than their machines. In this paper, integration of OEM and suppliers is modeled and simulated to highlight critical factors in this partnership and quantifying and harnessing benefits of this new approach.