Interest in smart factories and smart supply chains has been increasing, and researchers have emphasized the importance and the effects of advanced technologies such as 3D printers, the Internet of Things, and cloud services. This paper considers an innovation in dynamic supply-chain design and operations: connected smart factories that share interchangeable processes through a cloud-based system for personalized production. In the system, customers are able to upload a product design file, an optimal supply chain design and operations plan are then determined based on the available resources in the network of smart factories. The concept of smart supply chains is discussed and six types of flexibilities are identified, namely: design flexibility, product flexibility, process flexibility, supply chain flexibility, collaboration flexibility, and strategic flexibility. Focusing on supply chain flexibility, a general planning framework and various optimization models for dynamic supply chain design and operations plan are proposed. Further, numerical experiments are conducted to analyze fixed, production, and transportation costs for various scenarios. The results demonstrate the extent of the dynamic supply chain design and operations problem, and the large variation in transportation cost.
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