Virtual Factory - Definition & Meaning

Published in Operations and Supply Chain Terms by MBA Skool Team

What is Virtual Factory?

It refers to an integrated model that includes variety of software, tools, and methodologies in order to solve any real time problem of manufacturing system. This model sees a real factory as a combination of various sub-systems and includes them. In manufacturing, it creates a virtual simulation exercise that helps in replicating the real life scenario and helps in designing and implementation.

The advantage of virtual factory involves:

• It helps in creating capabilities to support the rapid development in manufacturing sector by pooling the experts.

• It helps in providing solutions in a speedy and cost effective manner.

• It eliminates the need for pilot plants or production runs and replaces it with virtual simulation on software.

• It helps in the decision making process.

The functions can be grouped into 3 major subsystems in a virtual factory are:

• Primary subsystems of manufacturing

• Business process subsystem

• Communication network subsystem

These subsystems are properly integrated to mimic the real life scenario.

Apart from manufacturing, companies also use virtual factory in providing service to their customers. Companies use the power of internet and ever increasing bandwidth to create a chain of experts/ freelancers with necessary skill sets and motivation. When customer seeks service, he is mapped to an expert who helps in solving the problem of customer.


Hence, this concludes the definition of Virtual Factory along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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