A risk analysis method to support virtual organization partners’ selection

Abstract

The Virtual Organization (VO) concept has emerged as a promising form of collaboration among companies by providing a way of sharing their costs, benefits and risks when attending to demands. When manufacturing processes and physical distribution of products are involved, the process of VO creation demands the selection of both Logistic Partners and Industrial Partners. This VO composition requires several aspects to be considered to ensure the VO correct operation, synthesized in the form of risks. Proper risk analysis provides more solid means for managers to evaluate and further decide about the more suitable VO composition for a given business. This work presents an integrated and quantitative risk analysis method to support Partners’ Search and Selection process within the VO creation phase. A set of algorithms have been developed to measure the risk considering a number of risk categories and performance indicators. A general example is showed and results are discussed at the end.