J. Service Science & Management, 2010, 3, 419-428
doi: 10.4236/jssm.2010.34048 Published Online December 2010 (http://www.SciRP.org/journal/jssm)
419
A Roadmap for Reconfiguring Industrial
Enterprises as a Consequence of Global Economic
Crisis (GEC)
Ibrahim H. Garbie
Department of Mechanical and Industrial Engineering, Sultan Qaboos University, Muscat, Oman.
Received September 2nd, 2010; revised October 14th, 2010; accepted November 20th, 2010.
ABSTRACT
Due to the existing depression, industrial enterprises in most of the world require to be reconfigured and/or reorgan-
ized especially the manufacturing firms (companies). As a consequence of the global economic crisis (GEC), great po-
litical and economical maybe changed and some companies will go out from business and others will be merged with
other firms. Also, a big effecting will be represented in unemployment. The industrial enterprises will start to deal in-
tensively for better utilization of resources (e.g., equipments, machines, etc.) and human resources. There are a lot of
issues needed to be addressed to cope with this recession. The most importan t issue is th en the oppo rtunity to learn new
skills and techniques. The other issues which this paper illustrated representing in complexity level of industrial enter-
prises, designing hybrid or innovative manufacturing systems, applied manufacturing strategies and philosophies,
product development, management for change, and good accounting system. In this paper, a conceptual framework as a
roadmap for discussing these issues of reconfiguring industrial enterprises will b e explained and discussed. The analy-
sis shows that reconfiguring industrial enterprises is not easy task and a multi-dimen sional problem.
Keywords: Reconfigurable Industrial Enterprises, Global Recession
1. Introduction
As the world leaders of group of 20 (G20) discussed the
need for a fiscal stimulus package at the global level,
which should be coordinated by industrialized nations,
the leaders of the 20 top economies, led by the United
States and the European Union, reached a deal to better
regulate global financial markets and take steps to halt a
global economic slide. They said also if you would like
to initiate this process in the global economic crisis
(GEC), it requires a coordinated global response. As also
reconfigurable industrial/manufacturing enterprises are
increasingly recognized today as a necessity for indus-
trial enterprises in a global economy due to this global
recession, the idea of reconfiguration was appearing as a
new philosophy or strategy since almost 10 years ago.
This concept will allow customized needs and require-
ments not only in producing a product or a variety of
products and changing in market demand, but also in
changing and reengineering the industrial enterprise itself.
This reconfiguring is not only in the physical system but
also in every item involved in the infrastructure. One
feature with respect to this depression is how these ex-
isting companies (firms) reconfigured to be adaptive to a
change in market, thereby enabling an enterprise to be
responsive to a dynamic market demand. Based on these
concepts and due to the existing depression, industrial
enterprises in most of the world require to be reconfig-
ured and/or reorganized especially the manufacturing
firms (companies). Also, a big effecting will be repre-
sented in unemployment. Unemployment has become the
global top concern. Now, the number one concern is the
fear of unemployment which was caused by the global
economic crisis especially in North Americans, Europe-
ans, the Asia Pacific and the Group of Eight industrial-
ized nations (the US, UK, Germany, France, Canada,
Italy, Japan, and Russia).
Automobiles is among the sectors the most affected in
many countries because sales have fallen sharply in re-
sponse to declining consumer confidence and toughening
terms for consumer credit. Japan’s Toyota auto-maker
cutting its production in Thailand after its sales in the
country fell by 21% [1]. Also, the Chinese automobile
industry has been affected in GEC through long supply

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC) 420
chain management [2]. The US based and non US manu-
facturers are reporting massive double digit sales drops.
Major producers in metals announced significant cuts by
30% and the global economic crisis has affected leading to
the cancellation and postponement of various construction
projects in many sectors [1]. The transformation in the
business model of the automotive industry has changed
toward cost cutting and increased technological capabili-
ties [3]. Other products around the world are affected by
the GEC such as hardwood lumber manufacturers [4] and
glass manufacturers [5]. Repairing the financial system in
services industry through economic drivers is proposed
and mentioned by reconfiguring the financial sector and
combinations of stronger and weaker banks [6] .
Employment in the auto sector (e.g., automaker), for
example, in October 2008 was down almost 14% over
the previous year as compared to a decline of a little less
than 1% in overall employment. Historical experience
also suggests that youth, immigrants, low skilled and
older workers are more likely to bear the burnt of rising
unemployment. For example through the past 12 months,
the number of unemployed persons has increased by
about 2.8 million in the United States. In the EU-15,
unemployment is also rising, albeit at a slower pace.
Employment is falling in Japan with the unemployment
rate heading up since the beginning of the year, albeit
from low levels. The industrial enterprises will start to
deal intensively for better utilization of resources (e.g.,
equipments, etc.) and human resources. There are a lot of
issues needed to be addressed to cope with this depres-
sion. One of them, for example, is keeping the flexibility
of domestic (local) manufacturing firms with ecological
strategy in designing and operation adaptable to global
dynamism and sustainability of communities. The new
manufacturing and management philosophies will be
used in depth in the next period such as lean and agile
principles, manufacturing strategies and philosophies,
and new organizational structures, etc.
This paper is organized into several sections. Section 1
presents the importance of the reconfiguring industrial
enterprises regarding global recession. Section 2 intr-
oduces a framework of how to deal with this crisis.
Analysis and implementation of a roadmap will be pro-
vided and explained in Section 3. Section 4 presents a
hypothetical example of how to implement the roadmap
guidelines regarding global recession crisis in industrial
enterprises. A conclusion and recommendations for fu-
ture work will be introduced in Section 5.
2. A Framework of Roadmap
2.1. Conceptual Model of Roadmap
In this paper, a conceptual framework for reconfiguring
industrial/manufacturing enterprises will be explained
and analyzed through recommended issues. These can be
represented into several points as follows (see Figure 1):
First: Analyze and estimate the existing industrial/
manufacturing enterprises complexity levels (ICL). This
complexity can be appeared in all different areas in these
organizations starting from suppliers to prod uct i ve sy st ems
and customers passing through all m anagement levels .
Second: Use new methodology for designing the pro-
duction systems of these industrial/manufacturing enter-
prises through the suggestion of a new system so called
Hybrid (or innovative) Manufacturing Systems (HMS).
This HMS will include cellular systems and functional or
process layout (job shop manufacturing systems). This
can be done through converting or transferring all job
shop manufacturing systems to cellular systems keeping
at least one or more functional cells as reminder cells.
Third: Apply manufacturing strategies and philo-
sophies (MSP) through introducing the new manufactur-
ing and management philosophies such as: lean produc-
tion (LM) and agile manufacturing (AM) concepts. This
can be considered as one of the most important issues of
an industrial enterprise.
Fourth: Introduce the rule of change or sometimes
called management for change (MFC). This will lead to
figure out how managers approach the future. Creating the
organization’s future will require breakthrough lead- ers
not bosses. Also, the new organizational structures need to
be flexible and revised according to performance appraisal
and how they can manage culture, diversity, and human
resources. This will lead us to reveal in the necessary tran-
sition from a boss period to a leader period.
Fifth: Develop an existing product design and modi-
fication or introduce a new one (PD) (e.g., General Mo-
tors (GM), Audi, etc.). Then, the role of designers and/or
manufactures is to imagine how the world will be to-
morrow in order to develop their products which faith-
fully reflect the future. Design plays an essential role in a
product’s commercial success by ensuring its attractive-
ness and contributing to its notoriety. Product design also
must assert a distinctive style and the role of design is to
bring a unique personality to the product making it im-
mediately recognizable.
Sixth: Create a new accounting system based on an
accurate estimate of costing and pricing of the product
(PC). This is called “cost control”. The Activity Based
Costing (ABC) is a very good technique for estimating
the cost of the product.
2.2. Mathematical Model to Assess the Roadmap
Analysis of reconfiguration issues regarding this global
recession RGR for next period will depend on these

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC) 421
Analyzing
complexity level
of Existing
industrial
Enterprises (ICL)
Designing
Hybrid or
Innovative
systems
(HMS)
Applied
Manufacturing
Strategies and
Philosophies
(MSP)
Management for
Change
(MFC)
Develop
Existing
product
design (PD)
Selection of
accounting
Systems
Product costs
(PC)
A Roadmap towards
Reconfiguring Industrial
Enterprises as a consequence of Global Economic
Create new industrial
Enterpris es coping the glob al
econo m ic cr isis
Figure 1. The conceptual framework reg arding reconfiguring industrial enter pri se s.
issues. The overall reconfiguration level with respect to
these circumstances can be modeled as RGR as a general
symbol. This model based on industrial complexity level
(ICL), hybrid (innovation) manufacturing systems (HMS),
manufacturing strategies and philosophies (MSP), man-
agement for change (MFC), product development (PD),
and product cost (PC). In this model, the RGR clearly
modeled as shown in the following Equation (1) as a
function of general major issues and Equations (2 and 3)
as a function of issues in more details with respect to
relative weights between them.

,,,,RGRfICL HMSMFCPD PC

(1)
1
inRGR
iRGR iRGR
i
RGRW X


 (2)
ICL HMSMPS
MFCPD PC
RGRwICL wHMSwMPS
wMFCw PDw PC
 
 (3)
where:
RGR = reconfiguring industrial enterprises regarding
the global recession.
ICL = industrial enterprise complexity levels.
HMS = hybrid manufact uring systems.
MSP = manufacturing strategies and philosophies.
MFC = management for change.
PD = product development.
PC = estimate product costing.
The symbols ,,,,,
I
CL HMSMPSMFC PDPC
www wwandw
are the relative weights of industrial complexity levels,
hybrid manufacturing systems, manufacturing strategies
and philosophies, management for change, product deve-
lopment, and estimate produ ct costing, respectively.
In this model, the relative weights to the various as-
pects of issues, based on the situation of new circu-
mstances (global recession), are assigned. These weights
can be used as a reason existing to differentiate various
issues. Because the trade-offs frequently exist between
these issues, a comprehensive analysis methodology for
each individual issues is needed. The value of these
weights may reflect the system analyst’s subjective pref-
erences based on his/her experience or can be estimated
using tools such as Analytical Hierarchy Process (AHP).
In this paper, the relative weights of criteria using the
AHP are estimated and changed frequently according to
the new circumstances by the decision-maker or a group
of decision-makers [7]. These groups represented in sen-
ior management levels, general managers, manufacturing
engineers, plant managers, designers, accountants, op-
erators and suppliers which they perform the pair-wise
comparisons of the criteria for the particular depression
and performance analysis. These relative weights can be
estimated using Analytic Hierarchy Process (AHP) ac-
cording to the next matrix. For example, suppose
3
ICL HMS
ww

, then this means that weight of industrial

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC) 422
complexity level (ICL) is three times more important
than hybrid manufacturing systems (HMS).
1
1
1
1
1
ICLICLICLICLICL
HMSMSP MFCPDPC
HMSHMS HMS HMS HMS
ICLMSPMFCPDPC
MSP MSPMSP MSP MSP
ICL HMSMFCPDPC
RGR
MFCMFC MFCMFCMFC
ICLHMSMSPPDPC
PD PD PD PDPD
ICLHMSMSP MFCPC
PC
wwwww
wwwww
wwwww
wwww
ww www
wwww w
Awww ww
wwww w
wwww w
ww www
w
w

w
1
PC PC PC PC
ICLHMSMSP MFCPD
wwww
wwww































3. Analysis and Implementation of the
Roadmap
How to implement the reconfigurable industrial enter-
prise towards this recession is not easy task and it will
include different issues which are mentioned in Section 2.
Incorporating those issues in one model is presented in
Section 3 through the proposed mathematical model. In
this section, each major issue will be explained through
sub-issues.
3.1. Determination of Complexity Levels in
Industrial Enterprises
The model of industrial system components and the corr-
esponding complexity relationships between them in
order to emphasize on particular system vision, structural
property of interest, system operating, and system eval-
uating is presented in this section. As each component or
element in these systems is a potential source of uncer-
tainty (due to its state), a measuring of complexity for
each one is highly valuable. Based on these concepts and
issues, it can be noticed that total industrial complexity
level (ICL) is a function of several important issues.
These issues are: complexity in system vision (SVC),
complexity in system structure (SSC), complexity in sys-
tem operating (SOC), and complexity in evaluating sys-
tem (SEC) (see Figure 2) [8,9]. Then, ICL is clearly
modeled as the following Equation (4) as a function of
previous sub-complexities.
ICL = f (SVC, SSC, SOC, SEC) (4)
Equation (4) can be rewritten as the following Equa-
tions (5) and (6). Each term represents sub-complexity
measure of total complexity measure of industrial system
(ICL). Adding these terms with relative weights will be
considered. These weights can be used as a reason ex-
isting to differentiate between sub-complexity measures.
1iICL iICL i
ICLW X


in ICL
SVCSSC SOCSEC
(5)
I
CLwSVCwSSCwSOCwSEC (6)

 
,, ,wSVC wSSC wSOCandwSEC
Where: ICL = total industrial system complexity, SVC
= system vision complexity, SSC = system structure
complexity, SOC = system operating complexity, SEC =
system evaluation complex ity
The symbols
SCVSSCSOCSEC are rela-
tive weights of system vision, system structure, system
operating, and system evaluation, respectively. These
relative weights of criteria are estimated using the AHP
[7].
3.1.1 Complexity Related to Industrial Enterprise
Vision
The main components (elements) of industrial enterprise
vision represent the vision or complexity in understand-
ing the vision of industrial enterprise. These are supply
chain management (SCM) representing in number of
suppliers (NOS), demand variability (DV) representing in
number of customers (NOC), introducing s new product
(NP), product life cycle (PLC), and time to market (TTM).
Thus, the vision complexity in industrial enterprises SVC
will be represented as a functio n of all these issues as th e
following Equation (7).
Industrial Enterprise Complexity (ICL)
Syste m Vision
Complexity (SVC)
System Structure
Complexity (SSC)
System Operating
Complexity (SOC)
System Evaluating
Complexity (SEC)
Figure 2. Main issues of total industrial enterprise complexity.

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC)423
SVC = f (SCM, DV, NP, PLC, TTM) (7)
3.1.2. Complexity Related to Industrial Enterprise
Structure
Industrial enterprise structure has so many different is-
sues to represent the complexity of it. There are two main
elements: product structure and design (PSD) and system
design (SD). For each main element, there are several
sub-main elements which play an important role in the
value of complexity. For example, the PSD has four dif-
ferent types to represent the complexity in the product
design such as number of parts pe r product (NNP), num-
ber of operations per part (NOP), processing or manu-
facturing time per operation (PT), and product dimen-
sions and size (PS). Regarding the SD, there are three
main important infrastructure, material handling systems
(MHS), production system size and functionality
(PSS&PPF), and plant layout system (PLS). All of them
have a significant effect on the complexity of manufac-
turing process. The mathematical expression of indu-
strial enterprise structure complexity SSC can be mod-
eled as the following Equations (8) and (9) in different
facets.
SSC = f (PSD, SD) (8)
SSC = f (NPP, NOP, PT, PS, MHS, PSS&PPF, PLS)
(9)
3.1.3. Complexity Related to Industrial System
Operating
In this analysis, it can be noticed that resource status of
operating (RSO) represents the industrial enterprise oper-
ating complexity. Resources mean equipment (e.g., ma-
chining equipment, forming equipment, material han-
dling equ ipment, etc.) and h uman. In this analysis, it will
be concentrated on resource reliability (RR), resource
capability or flexibility (RC), resource utilization (RU),
resource scheduling/rescheduling (RS/R), and human
scheduling scheduling/rescheduling (HS/R). Then, indus-
trial enterprise operating complexity (SOC) can be mod-
eled to measure or evaluate the complexity as a general
issues and sub-issues as the following Equations (10) and
(11). SOC = f (RSO) (10)
SOC=f (RR, RC, RU, RS/R, HS/R) (11)
3.1.4. Complexity Relate d t o Industrial Enterprise
Evaluation
As industrial/manufacturing enterprise has a great impact
on the performance measurements, they still have a
problem in measuring these complexities especially reg-
arding selection of the objectives. In this paper, there are
five different objectives that can be used to evaluate the
complexity in the system evaluation (SEC). They are:
product cost (PC), response (R), system productivity (SP),
product quality (PQ), and appraising and rewarding per-
formance (ARP). They also can be modeled mathemati-
cally as the following Equation (12).
SEC = f (PC, R, SP, PQ, ARP) (12)
3.2. Designing a Hybrid (Innovation)
Manufacturing System
Due to the limitations of job shop and flow shop systems
to accommodate fluctuations in product demand and
production volume, industrial enterprises are often re-
quired to be reconfigured to respond to changes in prod-
uct design and/or development, introduction of a new
product, and change in product demand and volume. As a
result, hybrid manufacturing systems (HMS) using group
technology (GT) and functional (process) layout, have
emerged as promising alternative manufacturing systems
to deal with these issues especially in this period [10]. It
should be analyzed carefully the existing Job shop man-
ufacturing systems into different perspectives such as
existing products information analysis and existing ma-
chines information an alysis. For the prod ucts info rmation
analysis, it should includ e the number of jobs or products,
number of machines required for each product, process-
ing or manufacturing time from each operation, and de-
mand of each one. For the machine information analysis,
it also should include the number of machines in the
plant, how many manufacturing departments, and how
many different types of machines in each department and
specification of each one. Moreover, it should exactly
know the machine capacity and capability. A lot of
works have considered in cell formation and cellular
systems [11]. Estimating the hybrid manufacturing sys-
tems HMS for next period will depend on how many
manufacturing cells are formed and how many functional
(process) cells will be created. The HMS is modeled as
the Equation (13) as a function of number of cellular
cells and functional cells.


NCMS NFRC

H
MS wNCMSwNFRC (13)
where:
HMS = level of hybrid manufacturing systems measure
at existing time.
NCMS = number of cellular manufacturing cells at ex-
isting time.
NFRC= number of functional (reminder) cells at ex-
isting time.
The symbols
N
CMSNFRC are the relative
weights of number of cellular cells and functional cells,
respectively. These relative weights of criteria are also
estimated using the AHP [7].
wandw

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC) 424
3.3. Manufacturing Strategies and Philosophies
Analysis of manufacturing strategies and philosophies is
related to the present and future, but it is developed by
examining the past. Reviewing manufacturing strategies
in any industrial enterprises requires dealing with rapidly
changing and dynamically shrinking world market. This
will be happened due to increasing complexity of prod-
ucts and processes as they are mentioned in the previous
sections. Implementing these manufacturing/manage-
ment strategies or philosophies will lead to eliminating
unnecessary activities, procedures, flow line, man-mach-
ine relationships, machine loading and sequencing, etc.
With respect to manufacturing strategies (MS), there are
three different types of modern manufacturing strategies:
strategic plan (SP), operational and tactical plans (OP),
and contingency plans (CP). Strategic plan (SP) is used
to develop and maintain a continual focus on the
long-term success of the firm. Operational and tactical
plan (OP) is a practice that can be used to create suc-
cessful strategies in a way that accommodates these un-
certainties to continually assess strategies and adjust
them as needed to remain successful in a dynamic envi-
ronment. The OP concentrates on the formulation of
functional plans. Contingency plan (CP) is used to get
the habit of being prepared and knowing what to do if
something does wrong. The purpose of this part of the
analysis is to isolate the areas for improvement. Another
purpose is to find the best strategic option for the com-
pany and to analyze how the company competes and
where the potential for improvements exists. Regarding
manufacturing philosophies (MP) emblematic features of
agile manufacturing (AM) or lean manufacturing (LM)
systems must be implemented. The analysis should be
directed towards the different dimensions of the company
[12,13]. Based on these concepts, the manufacturing
strategies and philosophies MSP is measured and mod-
eled mathematically according to the following Equa-
tions (14), (15) and (16).
 
MS MP

M
SP wMSwMP (14)
 
SP OPCP
M
SwSP wOP w CP  (15)
 
LM AM

M
PwLM wAM (16)
Where:
MSP = level of manufacturing strategies and philoso-
phies at existing time.
MS = level of manufacturing strategies measure at ex-
isting time.
MP =level of manufacturing philosophies measure at
existing time.
SP = strategic plan at existing time.
OP= operational and tactical plan at existing time.
CP= contingency plan at existing time.
LM = leanness level of the industrial enterprise at ex-
isting time t.
AM = agility level of the industrial enterprise at exist-
ing time t.
The symbols are the relative
weights of strategic plan, operational and tactical plans,
and contingency plan, respectively. Also, the symbols
,,
SP OPCP
ww andw
L
M
wandw
AM
are the relative weights of lean ness lev-
el and agility level, respectively. These relative weights
of criteria are also estimated using the AHP [7].
3.4. Management for Change
One of the driving pressures for change is the desire to
compete globally. America’s global trading partners (no-
tably Japan, China, and Europe) have adopted change as
an essential ingredient of their long-term strategies. In-
dustrial enterprises today are beset by change. Many
managers find themselves unable to cope with an envi-
ronment or an enterprise that has become substantially
different. A growing organization, a new assignment
changing customer needs, changing employee expecta-
tions, and changing competition may all be encountered
by today’s managers. There are three different types of
changes must be taken in the next period due to the ex-
isting depression. First, technological changes (TC) in-
clude such things as new equipment and new processes.
Second, environmental changes (EC) also include all the
non-technological changes that occur outside the organi-
zation such as economic changes, new social trends, and
new government regulations. The last one is the internal
changes (IC) which include policy changes, budget
changes, structure changes, decision changes, leadership
roles changes, diversity adjustments, and personnel and
culture changes [14]. To be able to change effectively,
you need a high degree of trust and outstanding commu-
nications capability. This means when you got into the
ground business, you did not want your employees at the
industrial enterprises to feel threatened.
Hence, management for change MFC at any time t is
evaluated according to which types of changes will be
needed and it can be modeled mathematically according
to the following Equations (17), (18) and (19).
MFC = f (TC, EC, IC) (17)

1
%
1100
inMFC
iMFC iMFC
i
P
MFC tWX






 (18)

%%
11
100 100
%
1100
TC EC
IC
Pp
M
FC twTCwEC
P
wIC
 
 
 
 




(19)

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC)425
where:
MFC= level of management for change for next pe-
riod due to existing recession.
TC= percentage needed for technological change for
next period due to existing recession.
EC= percentage needed for environmental change for
next period due to existing recession.
IC= percentage needed for internal change for next
period due to existing recession.
P%= percentage of changes regarding to each change
associated.
The symbols are the relative
weights of technological change, environmental change,
and internal change, respectively. These relative weights
of criteria are also estimated using the AHP [7].
,,
TC ECIC
wwandw
3.5. Product Development
The economic success of any industrial organizations
depends on their ability to identify the needs of custo-
mers to quickly create products that meet these needs and
can be produced at low cost with high quality [15]. Cre-
ate new products, invent new technologies and identify
new market opportunities or develop an existing product
design and modification are necessary for existing and
next period. Product development (PD) is one of the
most important issues regarding this existing depression.
Then, the role of designers and/or manufactures is to
imagine how the world will be tomorrow in order to de-
velop their products which faithfully reflect the future.
Achieving these goals is not solely marketing problem
nor is it solely a design problem or manufacturing prob-
lem, it is a product development problem involving all of
these functions. Thus, design plays an essential role in a
product’s commercial success by ensuring its attractive-
ness and contributing to its notoriety. Product design also
must assert a distinctive style and the role of design is to
bring a unique personality to the product making it im-
mediately recognizable. Measuring the reconfigurable
level of existing industrial enterprises regarding global
economic crisis depends on needs (N), product cost (PC),
product quality (PQ), product development time (PDT),
product development cost (PDC), and development ca-
pability (DC). The PD is exp ressed mathematically as the
following Equations (20), (21), and (22).
PD = f (N , PC, PQ, PDT,, PDC, DC) (20)
1
%
1100
inPD
iPD iPD
i
P
PDW X






 (21)
NPC PQ
PDT PDC DC
PDw NwPCwPQ
wPDTwPDCwDC


(22)
where:
PD) = product development regarding the global re-
cession for next period.
N = percentage for product needs for next period.
PC = percentage fo r p r o duct co st fo r next p e ri o d.
PQ = percentage for product quality for next period.
PDT = percentage for product development time for
next period.
PDC = percentage for product development cost for
next period.
DC = percentage for development capability for next
period.
The symbols ,,, , ,
N
PC PQ PDTPDCDC
wwwwwandw are
the relative weights of product needs, product cost,
product quality, product development time, product de-
velopment cost, and development capability, respecti-
vely.
3.6. Selection of Cost Estimating Systems
During this period and regarding global recession crisis,
the key to an industrial organization’s survival is the
continuous improvement of its performance. This perfor-
mance index is represented in product cost (PC). The
management accounting systems include traditional
costing, activity-based costing (ABC), and throughput
accounting. All studies show that the ABC was found
providing more accurate product cost information [16]
and resulted in a better system performance than other
management accounting systems. Product cost (PC) can
be estimated by material cost (MC), labour cost (LC), and
overhead cost (OHC). The new mathematical formula of
product cost is introduced as the following Equations
(23), (24) and ( 25 ).
PC = f (LC, MC, OHC) (23)
1
%
1100
inPC
iPC iPC
i
p
pcW X






 (24)
%%
11
100 100
%
1100
LC MC
OHC
PP
PCwLC wMC
P
wOHC
 
 
 
 




(25)
where:
PC= level of product cost for next period.
LC= percentage needed for labor cost for next period.
MC= percentage needed for material cost for next pe-
riod.
OHC = percentage needed for overhead cost for next
period.
The symbols ,,
L
CMC OHC
wwand w are the relative
weights of labor cost, material cost, and overhead cost,
respectively. These relative weights of criteria are also
estimated using the AHP [7].

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC) 426



15
A 
4. A Hypothetical Numerical Example 10
.5
21
MSP
A







11
11
MP
A 
 This numerical example is used to illustrate the proposed
roadmap to evaluate the lev el of reconfigurable indu strial
enterprises due to the existing global financial crisis. This
can be done through two ways. The first way is used to
calculate the relative weights of main and sub-main is-
sues. The following matrices are used to estimate the
relative weights between the main and sub-main issues.
The relative weights of th ese issues are shown in Table 1
and these values are represented in Equation (26). Equa-
tion (26) represents the level of reconfigurable level of
industrial enterprises regarding the global recession
(RGR). The second way is used to determine values of
the I CL, HMS, MSP, MF C, PD, and PC. Ta ble 2 is used
to illustrate the values of these issues based on the cur-
rent status and the recommended for future works re-
garding the global recession.
10.5 0.25
21 0.2
45 1
MS
A






















15.12
67.012
5.05.01
MFC
A
121.50 231
0.5011221
0.67 11111
0.500.50110.50 1
0.33 0.501211
111111
PD
A



















111.50 1.2510.75
11211.50.80
0.67 0.501110.90
0.801111 0.75
10.670.50110.75
1.331.251.111.33 1.331
RGR
A









120.33
0.50 1 0.25
3141
PC
A















 
0.170.190.16
0.150.13 0.20
RGR ICLHMSMPS
MFC PD PC
 


(26)
Values of the ICL, HMS, MSP, MFC, PD, and PC are
estimated through the second way as 70 .5%, 85%, 128%,
93.6%, 107%, and 45%, respectively. With respect to the
ICL, it can be noticed that the complexity level is high
(given by Garbie and Shikdar, 2010) and this value needs
to be eliminated or at least reduced in the next time.
Moreover, the level of the HMS is high due to the num-
ber of functional departments and it must be converted.
110.75 1
1111
1.33 111
1111
ICL
A






0.2 1
HMS 

Table 1. Relative weights between main and sub-main issues.
Main Issues Relative Weight Sub-main issues Relative Weights
of Sub-main issues Sub-Sub- main issues Relative Weights Of sub-sub main
SVC 23.25%
SSC 24.40%
SOC 26.80%
ICL 17%
SEC 24.90%
NCMS 83.33%
HMS 19% NFRC 16.67%
SP 13.04%
OP 19.24% MS 33% CP 67.67%
LM 50%
MSP 16%
MP 67% AM 50%
TC 19.90%
EC 34.71%
MFC 15% IC 45.30%
N 25.90%
PC 18.00%
PQ 16.90%
PDT 11.87%
PDC 13.99%
PD 13%
DC 16.32%
LC 23.93%
MC 13.73% PC 20% OHC 62.32%

A Roadmap for Reconfiguring Industrial Enterprises as a Consequence of Global Economic Crisis (GEC)427
Table 2. Values and percentages changes.
Main Issue Sub-main issues Percentage values Percentages value s of sub-main Values of main issue
ICL Given (Garbie and Shikdar, 2010) 70.50 % 70.5 %
NCMS 0 cells
HMS NFRC 5 functional 85 %
SP= 15 years
OP = 3 years MS
CP = 0.5 years
LM = 40%
MSP
MP AL = 60%
128 %
TC + 5%
EC + 5% MFC
IC –20%
93.6%
N +25%
PC –30%
PQ +10%
PDT –20%
PDC –20%
PD
DC +40
107%
LC –30%
MC –10% PC
OHC –75%
45%
to cellular or focused manufacturing systems to elimi-
nating clutter. Regarding the MSP, the values of MS and
MP are high too due to the current status of strategies and
philosophies which were used. The strategic plan, operat-
ional plan, and contin gency plan are 15, 3, and 0.5 years,
respectively. And, the levels of leanness and agility are
40% and 60% respectively. The values of the MFC will
be changed for the next period by 5% for TC and EC and
–20% for IC. The requirements of the product develop-
ment for next period will be also changed by 25%, –30%,
10%, –20%, –20%, 40% for N, PC, PQ, PDT , PDC, and
DC, respectively. With respect to product cost, the LC,
MC, and OHC will be changed for next period by –30%,
–10%, and –75%, respectively. Then, the value of RGR
after applying these values in Equation (26) equals
85.37%. This value (85.37%) means that this enterprise
urgently needs to reconfigure its issues regarding the
global crisis by 83.37% of its capability and improve-
ment.
The level to compete or resist the global recession
equals (1–0.8537 = 0.1463) 14.63 %. This value means
that this enterprise has a weak resist toward global eco-
nomic crisis.
5. Conclusion and Recommendation for
Future Work
It can be noticed from this analysis that understanding
the concepts and issues of reconfiguration issues is not
simple not only in normal situations but also in financial
crisis. It required emphasize on each of the main issues
and the sub-main issues. Hence, the reconfigurable in-
dustrial enterprises will involve the six major issues:
complexity of entire enterprise, designing a hybrid (in-
novative) manufacturing systems, applying manufa-
cturing strategies and philosophies, management for
change, product development, and selecting accurate
accounting systems. In this paper, the relative weights
between major and sub-major issues are estimated and
also the percentage of increasing or decreasing these is-
sues and their parameters is oriented to specific solutions.
Evaluating level of reconfigurable industrial enterprises
is proposed and estimated. In addition, the level of chal-
lenge regarding th e financial crisis is also estimated.
Until now, reconfiguring industrial enterprises regar-
ding global economic recession still remain a research
topic of immense international interest. The main con-
tribution in this paper is how to identify and model the
reconfigurable industrial firms in any industrial enter-
prises at any time cons idering the most important visions.
The author intends to extend this research to apply this
analysis and formulation to estimate the degree of reco n-
figurable in any industrial enterprises towards full vali-
dation of the reconfigurable theory which will be dis-
cussed and presented in the future research with identi-
fying the reconfigurable cost and time.
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