University of St.Gallen and IT-Logix develop risk management solution for global production networks

Many manufacturing companies today operate globally distributed production networks in which value creation processes are closely linked across multiple locations. However, this dependence on international networks also makes companies vulnerable to disruption. Current geopolitical conflicts and socio-economic developments have highlighted the fragility of these networks.  

In order to remain competitive in the long term, companies must be able to react to external influences at an early stage and make strategic decisions based on sound risk assessments. "Even the loss of one location can be extremely disruptive to the ability to deliver. If I don't keep an eye on how these risks develop, I simply run the risk of being completely out of business," says Prof. Dr. Thomas Friedli, Professor of Production Management and Director of the Institute of Technology Management.

In order to find solutions to these challenges, the Institute of Technology Management at the University of St.Gallen, in collaboration with the companies Endress+Hauser, Phoenix Contact, Weidmann and IT-Logix, has carried out an innovative research project funded by Innosuisse.

The aim of the project was to develop a systematic approach for identifying and assessing country risks in global production networks. The focus was on the development of tools with which country risks can be identified and future risks can be better managed. As part of the project, IT-Logix developed a dashboard with two features:

• Various visualizations for monitoring and analyzing country risks at site and network level.
• A "what-if scenario" function with which companies can simulate strategic decisions based on external influencing factors and country risks.

Supporting companies in identifying risks

Integrated into a software solution, the newly developed approaches enable the data-based analysis of country risks at various levels. By being able to map scenarios for future country developments, companies can make more informed strategic decisions on product allocation and location selection and thus pursue a more robust risk management strategy. The most important results at a glance:

• Strengthening the resilience of global production networks: The project shows how companies can use innovative approaches and software solutions to make their production networks more resilient to geopolitical and socio-economic risks. This increases the long-term competitiveness of Swiss companies on global markets.
• Data-driven risk management strategies: Thanks to the newly developed dashboards and "what-if scenarios", companies can make well-founded, data-based decisions regarding country risks. This improves their ability to react quickly and strategically to external influences.
• Promoting innovation through practical research: The Innosuisse project illustrates how close cooperation between science and industry leads to practical solutions that sustainably strengthen the innovative power of the Swiss economy. It also shows that practical research can help companies to position themselves for the future and effectively put innovations into practice.

Course of the project

These solutions were developed in close cooperation with the project partners in workshops. They comprise successive work packages ranging from theoretical research to practical implementation.

After completion of the project, the project and the results will be presented to a broad specialist audience at the Production Management Conference on October 15-16, 2024. The results will be discussed with industry experts and show how companies can make their networks more resilient to global risks. In addition, the project team is also open to new project partners in order to jointly develop further progress and practical solutions.

Source: www.it-logix.ch