Contents lists available at ScienceDirect Advanced Engineering Informatics journal homepage: www.elsevier.com/locate/aei Full length article Quantitative lifecycle risk analysis of the development of a just-in-time transportation network system John P.T. Mo ⁎ , Matthew Cook RMIT University, Australia ARTICLE INFO Keywords: Time critical manufacturing Enterprise model Transportation network Lifecycle risk assessment ABSTRACT The automotive manufacturing industry is under financial pressure due to massive cost structure, relatively small scale operation and strong global competition. In order to improve their operational cost efficiency, companies have adopt lean principles in all their manufacturing activities, in particular, just-in-time supply chain. However, a consequence of this policy makes the transportation network from the local supply chain time critical. This paper uses an enterprise system model integrated with a quantitative method to study a manufacturing com- pany’s logistics system re-development project. The quantitative risk analysis examines the project’s systems engineering management plan to see if it is sufficiently to mitigate risks in design, monitoring and validation of the project’s lifecycle processes. The computed risk profile shows a trend of decreasing risk and suggests areas of improvement in the systems engineering plan to ensure greater probability of success. The research assumes a single risk profile for the supply chain. Research is continuing in expanding to more accurate risk profile of the project when partners of the supply chain have individual profiles. 1. Introduction For decades, automotive manufacturing has been regarded as a pillar of many countries’ economy. However, as manufacturing systems become global, more competitors from different countries are entering the race. In some countries, the industry is regarded as extremely competitive [1]. In order to survive, automotive manufacturers have no choice but to find ways to reduce cost and increase efficiency. Typically, the major vehicle manufacturers are responsible for the design and assembly of their products. However, the majority of com- ponents for the car are sourced from independent suppliers. For ex- ample, one of the major automotive manufacturers in Australia has 210 domestic suppliers with total 5177 parts supplied through its inbound materials operations. These suppliers are also located in three different states with the sources of parts evenly distributed among the states. This type of operation required for closed loop supply chain manage- ment, i.e. to deliver inbound domestic automotive parts from suppliers to the main assembly plant and to return the empty packaging from the assembly plant back to its suppliers [2]. Due to the diversity of the supply chain, one of the common pro- blems in the automotive industry is to implement a lean material management system by minimizing its inventory cost. This policy puts pressure on the transportation network such that it has to operate on the principle of Just-In-Time (JIT), i.e. small quantities of inbound materials shall be delivered more frequently to the main assembly plant instead of receiving a once off delivery in bulk sufficient for weeks. Furthermore, the small delivery quantity shall be just enough to cover production requirements for a defined period so as to keep the plant running continuously without interruption. Usually, third party logistics companies are responsible for pro- viding fully integrated logistics services including the design and im- plementation of JIT transportation network. However, prior experience showed that although their transportation network design was seen as cost effective on paper (operational plan), a lot of disruption often occurred at the operational level due to the enormous number of ad hoc delivery services that were charged at the premium rate because those services were considered out of scope. This has blown off the pur- chasing department budget. An improvement project was initiated within one of the major Australian automotive manufacturers to reduce its operation costs by adopting ‘Just in Time’ policy to the design of a new transportation network. Making system changes always carries risk, especially when the change involves significant unknowns and investment. In order to mitigate the risks, large scale system development projects are often managed with systematic processes that are designed to minimise the risk of making wrong decisions. The purpose of this paper is to examine how a quantitative assess- ment methodology can be used to estimate the levels of risk throughout https://doi.org/10.1016/j.aei.2018.03.002 Received 13 November 2017; Received in revised form 16 February 2018; Accepted 13 March 2018 ⁎ Corresponding author. E-mail address: john.mo@rmit.edu.au (J.P.T. Mo). Advanced Engineering Informatics 36 (2018) 76–85 1474-0346/ © 2018 Elsevier Ltd. All rights reserved. T