The rationale of product families for mass customization has attracted much attention from both academia and industry alike. While the product family strategy facilitates product differentiation and customization, it inevitably leads to a high variety issue in the downstream fulfillment process. In particular, when assembly-to-order and outsourcing become common practices, the supply chain decisions are deemed to be very complicated in order to accommodate the diverse product and process variants associated with product families. With focus on variety management, this paper proposes a virtual supply chain (VSC) configuration concept. The general gist is to manage various supply chain variants under a generic umbrella. It emphasizes the conceptualization and modeling of VSC to enhance the power of variety handling, with respect to supply chains, as well as products and processes. A domain-based reference model is employed to identify and coordinate the decision factors of supply chains. These decision factors are used to model the VSC based on formal semantics and object-oriented modeling techniques. The management of supply chain variety is formulated as the VSC configuration problem, and is coped with variety handlers and their states. A case study of electrical motor global supply chains is reported. It is demonstrated that the generic characteristics of VSC excel in coordinating the decisions regarding product, process and supply chains towards mass customization.

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