This paper explains how investments in flexible, advanced manufacturing tech nologies (AMT) have special properties that can transform organization design and the economic bases of strategic flexibility. Investments in AMT that pro vide significant economies of scope (i.e. low-volume/low-cost manufacturing) produce strategic options that allow the firm to place a 'call' on related markets that it may potentially enter. The value of AMT investments grow with the increasing changes in the environment. In addition, CAD/CAM networks, a vital component of most AMT systems, enable the firm to work selectively with external designers, suppliers, customers and other firms to rapidly com press the product development and commercialization process. Firms seeking to maximize economies of scope and the option value of AMT need to recon figure their organizations into loosely coupled systems with a modular, open systems perspective. Flexible AMT systems facilitate the pursuit of emergent, product-based strategies based on the selective exercise of the process techno logy's option value. Furthemiore, AMT helps firms develop more complex competitive strategies (e.g. integrated low cost and differentiation) necessary for strategic competitiveness in global markets. Finally, AMT can facilitate the development of a learning laboratory in organizations.
Computers and communications technology in manufacturing fundamentally change the nature of the factory. Because capabilities and constraints are changed, organization and management must also change. Assumptions underlying manufacturing's shift from economies of scale to economies of scope. The central organizing concept changes from materials flow to information flow. With this new perspective, business strategy and the mission of the firm must also change. Above all, the focus on information forces us to conceptualize anew what characteristics are desirable for advanced factories, for organizations to operate them, and for management thinking.
Purpose -There is significant anecdotal evidence of increasing global supply chain fragility; and, for this reason, robustness and operational sustainability are of notable concern to senior executives. Though the issues are myriad, four factors dominate these concerns: increasing complexity of products, processes, and technologies, increasing structural complexity of supply chains, increasing diversity and global nature of business systems, and the environmental costs and impacts of extended supply chains. This paper aims to focus on these factors. Design/methodology/approach -This conceptual, theoretical paper differentiates corporate sustainability and operational robustness in terms of profitability and costs, then defines and develops internal, external, and uncontrollable fragility factors. A process that measures and integrates these factors is proposed for brainstorming and decision making. Additionally, methods to represent and compare alternatives, progress against internal or external targets, and industry goals or known competitor values are offered. Findings -This study describes and demonstrates an easy-to-implement process to address the potentially disastrous consequences of supply chain fragility.Practical implications -This study offers both academicians and practitioners a model to research, assess, and identify the risks and costs of current levels of supply chain fragility and to weigh various solutions. Originality/value -Unfortunately, few research efforts define these issues or identify the associated risks. Further, little has been put forward to posit, model, and facilitate the practical decision process to address these factor relationships. To these ends, the paper proposes a "fragility index" to help supply chain managers assess sources and potential costs of fragility, sustainability, and the associated environmental stress in their supply chains.
The transformation of US manufacturing, led by computer‐integrated manufacturing (CIM) systems, has already begun to take root. This article examines the potential benefits to firms which understand and can exploit CIM technology to its fullest extent. Because CIM simultaneously provides high product variety with low costs, conventional assumptions about competitive strategy and organisation design need reevaluation. As companies must work with increasingly scarce capital, human resources and time, CIM becomes an attractive option not only for highly capital‐intensive industries such as automobiles, but also for fast‐changing areas such as textiles, fashion design, and consumer appliances. CIM combines the benefits of economies of scope with the scale economies traditionally garnered only with large, rigid and dedicated factories. Success with CIM and other new manufacturing technologies depends on new organisational designs and incentives that foster fast innovation and cross‐functional integration. CIM′s promising role in transforming the manufacturing firm into a service business across many different industries will spur many US firms′ efforts to enter a global marketplace.
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