De Meyer, Arnoud

Vereecke, Ann

English

The structure and organization of international manufacturing has changed over the past 
twenty years. It seems as if manufacturing is moving towards emerging countries e.g. China 
or India, often to take advantage of lower labour costs. Whilst production cost is an important 
consideration in choosing a location for the factory, we argue that one should not become 
victim of a herd effect and that other parameters, such as quality, flexibility, transportation 
and energy costs need to be taken into consideration in the determination of the optimal 
manufacturing network. Relocating a factory is changing the strategic architecture of the 
company’s manufacturing network and requires a long term view and a good model to design 
the architecture of the manufacturing network. Based on a longitudinal empirical study of 
eight European multinational companies we have gained an understanding of the dynamics of 
a company’s manufacturing architecture. We observed that market entry drives the creation of 
new factories more than mere production cost, and that skills and knowledge can be a ticket 
for a safe future of the factory. Over ten years, we observed an increase in the knowledge 
sharing role of factories. And we also learnt that it is important to keep a significant variety of 
factories in order to provide flexibility in reshaping the strategic architecture of your 
manufacturing

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The dynamic management of manufacturing networks

https://repository.vlerick.com/bitstream/20.500.12127/3230/1/Vereecke_A_WP_DynamicManagementofManufacturingNetworks.pdf

The dynamic management of manufacturing networks

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