Summary
What determines which manufacturing flexibility strategies are feasible and which are not? In this paper, I build both theoretical and empirical understanding of task-environmental contingencies that may either enable or constrain the selection of various flexibility strategies. The special emphasis is on the various plant-level actions that are used to seek manufacturing flexibility. Demand uncertainty and variability, technology, and competitive strategy emerge as the most important contingencies, although not in ways that are immediately apparent. Finally, managerial implications at both the corporate as well as manufacturing unit levels are discussed.
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Extract
Elaborating the Contingency Theory of Organizations: The Case of Manufacturing Flexibility Strategies
1. Introduction
Two central questions in developing strategies in complex and unpredictable task environments (Dill 1958) are: What kinds of organizational responses and strategies can be used in a given task environment? Which aspects of the task environment shape and constrain the availability of these strategic responses? The relevance of these questions to examinations of manufacturing strategy are also well established (e.g., Anand and Ward 2004; Swamidass and Newell 1987), and recent global economic trends have highlighted the importance of being able to adapt to complex and rapidly changing environments (Hayes 2002; Hayes and Pisano 1996). This paper addresses these two central questions both theoretically and empirically by examining the flexibility strategies that manufacturers have at their disposal when they try to respond to the demands of their task environments. I start with Gerwin's (1993) typology of flexibility strategies and examine through a case study their application in various task environments. In doing this, this paper not only offers theoretical insight by elaborating the general propositions offered in contingency theory, but also answers Gerwin's (1993, p. 404) call for applied flexibility research aimed at managerial application and problem-solving. This makes academic operations management research more relevant and accessible to practitioners. The challenges associated with making academic research relevant to practice are also well documented (e.g., Skinner 1996).Before tackling the theoretical aspect of the endeavor and the data, let us take a look at the kinds of challenges manufacturers may face today. Figure 1 depicts the monthly production volumes over a three-year period for one of the typical manufacturing plants of the case study company, Consolidated Metals Corporation, CMC (a pseudonym), a multinational manufacturer of metal parts and components for the machinery, electronics, construction, and automotive industries. Depicted in the figure are the production volumes for three product groups produced at the plant. Because the vast majority of CMC's production is make-to-order, even for the standard products, variability in production volumes is also a valid, although not perfect, proxy for demand variability. Further, the example focuses on production volumes, because volume uncertainty in particular has been identified as one of the major sources of environmental dynamism and complexity in manufacturing (Jack and Raturi 2003; Walker and Weber 1984).We can draw at least three obvious conclusions from Figure 1. Firstly, there is a lot of variability in the monthly production volumes in all three product groups: if the average monthly production volume is 100 units, individual monthly production volum...See the full content of this document
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