On Strategy and Manufacturing Flexibility

The era when customers bought what companies produced is long gone. The situation is now reversed and companies must produce what customers want; while the customers' preferences are, furthermore, becoming increasingly diverse. This has forced companies to adopt a new mode of thinking in order to survive. The strategy, by necessity, has become to manufacture flexibly. This thesis focuses on strategy and manufacturing flexibility. It includes a frame of reference and eight papers appended in full, reporting findings in four broad areas: • Manufacturing flexibility, • Manufacturing strategy, • Strategic flexibility, • Strategic manufacturing flexibility. The overall purpose of this study is to conceptualise the strategic role of manufacturing flexibility in the continuous realignment between the organisation and its environment. The guiding principle of the methodology applied in this thesis is to use the most appropriate paradigm and methodology given the individual problem at hand. The results of the studies in manufacturing flexibility are used firstly to provide elucidation of the understanding of managers' perceptions of manufacturing flexibility. Secondly, a framework for manufacturing flexibility is deduced which illustrates how to obtain consistency from manufacturing strategy to the resource characteristics in the production system. Thirdly, a method for the evaluation of flexibility in manufacturing, the capital-back method, is developed and analysed. The results of the study in manufacturing strategy are presented as a case, indicating how flexibility of the manufacturing function can be utilised in order to gain competitive advantage in an uncertain and dynamic market. A combination methodology, using both a top-down, grand strategy approach and a bottom-up, grounded methodology is developed and used in the study, and is shown to provide a sound basis for understanding external as well as internal factors impinging upon the company. Furthermore, Porter's (1980) taxonomy of generic strategies is scrutinised and the difficulties of classifying the strategy of a real company into one, and only one, of the deduced taxa are illustrated. Strategic flexibility is a broad area of research. Consequently, the study of this area embraces only a minor part of the field, namely a meta-analysis of the literature on strategic alliances. The analysis confirms, among other things, that the literature is overoptimistic towards strategic alliances. Finally, regarding strategic manufacturing flexibility, a suggestion for research is presented which involves the synchronisation of three continuous processes within the company, concerning manufacturing flexibility, manufacturing strategy and strategic flexibility. Three major suggestions concerning research in the field of strategic manufacturing flexibility are presented. Firstly, an integrative perspective on the competitive priorities - cost, quality, flexibility and dependability - is advocated due to synergistic effects. Secondly, since the concept appears to transcend disciplinary boundaries, a multi-disciplinary perspective is also advocated. Thirdly, due to the multi-dimensionality of the concept of strategy as well as flexibility, a multi-methodological approach appears to be advantageous in the pursuit of research within this field

Evaluation and Management of Manufacturing Flexibility

5 articles on Flexibility especially in manufacturin

Changed Supply Chain Disruption Risks through Installation of a Pasteurizer – the case of Brämhults Juice AB

Brämhults Juice AB is a Swedish company producing fresh juice for the Scandinavian market. Fresh juice is rich in taste but has limited durability and must be treated with special care throughout the whole supply chain. Not only will the quality of the product be affected if mistreated, but there are also contamination risks meaning that people actually could get sick, although the risk is very small. There are also other kinds of flow-related risks like single-sourced packages. To reduce the risk of spoiled juice, Brämhults installed a pasteurizer in their production process during spring 2005. An interesting question is how this affected the risks in the supply chain flow. One of the authors (Paulsson 2007) has in another study developed a model, called the DRISC (Disruption Risks In Supply Chains) model, for the structuring, evaluation and handling of risks related to disruptions in the product flow in the supply chain. The DRISC model, seen from the angle of an individual (focal) company in the supply chain, covers all product flow-related disruption risks in the total supply chain from natural resources to the delivered final product, and makes it possible to classify them into 15 different risk exposure boxes, of which 3 boxes have “known result impact” and 12 have “expected result impact”, and also to summarize them in a figure for the total negative result impact. The risk analysis phase of the model is applied in the project to Brämhults juice before and after the installation of the pasteurizer in order to see the effects on the risk "picture". The analysis showed that there was an increase in two of the three “known result impact boxes” and a decrease in the third one. There was also a decrease in eight of the “expected result impact boxes”, and the remaining four were unchanged. Especially interesting is that the three risks linked to market confidence, which before were high or very high, were now all medium. There has also been a change towards comparatively more known result impacts and fewer expected result impacts. The investment in the pasteurizer was about 2 million SEK, and there was a minor increase in the operating costs by 800.000 SEK annually. Since the costs for returns and withdrawals caused by spoiled juice, which before the pasteurizer were about 6 million SEK annually, dropped by about 90 %, the investment has had a payback time of about 5 months. But the pasteurizer also prolonged durability from 10 to 18 days, thereby making it possible for Brämhults to change from distribution by the company’s own drivers and lorries to all the different shops over to transporting to a limited number of DCs (distribution centres) belonging to different food chains. If we split the pasteurizer investment 50/50 on risk and on distribution, we will get a payback time concerning the risk part of the investment of only 2 to 3 months, indicating that it was a very profitable investment. In the costs for returns and withdrawals, only the direct, immediate costs are included. If the negative effects of disruptions on future sales are also considered, the payback time will be even shorter

Mixing Engineering, Business and Design Students in an International Cross-Disciplinary Course on Innovation

International Market Driven engineering (iMDE) is an international course on innovation where Swedish and Chinese engineering students are mixed with business and design students. The course is run on a yearly basis, it is six weeks long and takes place in China. Both the development and the execution of the course is made as a joint project between the Swedish and Chinese instructors. The course contains lectures, coaching sessions, company visits and an innovation-project performed in teams. The course aim is to expose students to the innovation process and international collaborations, and to open their eyes for entrepreneurship. Pertex analysis reveals that the students highly valuate the international collaboration amongst the students in the innovation-project. The number of stat-up companies formed by the students has also increased with the introduction of the iMDE-course

Teaching Manufacturing Operations and Strategies in Higher Education

Students at higher technical educations e.g., bachelors and masters, are traditionally taught in software programming and factory automation. Students at higher economical and management schools are exposed to different strategies and their economical impacts. However, in many education programs, the larger perspective, of how to combine the technical and the economical aspects is not highlighted. Technology Management is a unique program at Lund University Sweden, where a selected number of students from the school of economics and management and from the engineering faculty are taught together during their last year of study. Their views on problems and challenges in todays industry often complement each other. The course Technology, Strategies and Structures includes e.g. projects done in collaboration with industries. This paper includes a discussion about how knowledge about Manufacturing Operations and Strategies, can be incorporated in higher technical and economical studies, and it describes some industry projects done by students

Managers' Perception of Flexibility in Manufacturing - A Study in the Swedish Engineering Industry

Managers’ perceptions of flexibility in manufacturing were investigated in a research case study conducted at six Swedish companies within the engineering industry. The goal of the study was to establish which factors managers considered to be important for manufacturing flexibility and how companies and managers perceived flexibility. The size of the company, the complexity of the products and the level of technology used in production were factors found to be important for issues concerning manufacturing flexibility. The findings have implications for both managers and researchers. Managers should be aware of the lack of conformity in the perception of flexibility within companies and its possible consequences. Gives researchers suggestions based on this study, for further research in manufacturing flexibility