The Impact of Complexity on Knowledge Transfer in Manufacturing Networks

Abstract

C oordinating knowledge transfer within multi-plant manufacturing networks is a challenging task. Using a computational model, we examine when it is beneficial to create production knowledge within a central unit, the "lead factory," and transfer it to geographically dispersed plants. We demonstrate that the knowledge transfer generates a trade-off between a positive cost-saving effect due to fewer adaptations in each plant, and a negative transfer cost effect due to the costly knowledge transfer itself. The complexity of the production process moderates the performance implications of the knowledge transfer because it determines the relative strength of these two effects. For production processes with low complexity, knowledge transfer can engender superior network performance. Here, an optimal extent of knowledge transfer exists, and thus, a complete knowledge transfer is not performance maximizing. For production processes with medium and high levels of complexity, performance is reduced rather than enhanced through knowledge transfer so that it is optimal not to transfer any knowledge from the lead factory to the plants. While we analyze knowledge transfer within a manufacturing network, our results are transferable to other settings that consist of a knowledge sending and receiving unit.

Towards Building Multidisciplinary Knowledge on Management of Technology: An Introduction to the Special Issue

“…Another set of papers have examined how technological innovations both impact and are impacted by the internal organization and the external marketplace. Many of these papers have addressed behavioral issues in the implementation of and in the consumer response to innovations in technology (Ba and Johansson 2008, Bendoly et al 2008, Bendoly et al 2012, Chandrasekaran and Mishra 2012, Gray and Massimino 2014, Lang et al 2014, Lee et al 2011, Li and Rajagopalan 2008, Venkatesh et al 2010. Additionally, the MOT Department has published papers reflecting the key managerial challenges of developing and deploying innovations through technology outsourcing (Perdikaki et al 2015) and the distributed development of product/process design (Bala et al 2014).…”

The Impact of Control and Complexity on Supply Network Performance: An Empirically Informed Investigation Using NK Simulation Analysis

“…These studies have not considered the complex adaptive nature of SNs. Self‐organization and adaptation are key properties in these networks that compose of several firms that are interconnected with each other (Nooteboom, ; Choi, Dooley, & Rungtusanatham, ; Lang, Deflorin, Dietl, & Lucas, ). No singular authority or mechanism deliberately orchestrates the overall system behavior.…”

“…We adopt Kauffman's NK model () for this study because it has been recognized as a powerful research methodology for theory building and theory testing in operations management, organizational behavior, and strategy (Rivkin, ; Lenox, Rockart, & Lewin, ; Davis, Eisenhardt, & Bingham, ; Ganco & Hoetker, ; Kavadias & Sommer, ; Mihm, Loch, Wilkinson, & Huberman, ; Aggarwal, Siggelkow, & Singh, ; Siggelkow, ; Lang et al., ). This methodology fits very well with our research aims and it enables us to overcome the limitations of previous studies on control in SNs, which mainly focus on buyer–supplier relationships using analytic and qualitative approaches.…”

“…This methodology fits very well with our research aims and it enables us to overcome the limitations of previous studies on control in SNs, which mainly focus on buyer-supplier relationships using analytic and qualitative approaches. First, the NK model helps in capturing the complex adaptive nature of SNs (Choi et al, 2001;Choi & Krause, 2006;Pathak, Day, Nair, Sawaya, & Kristal, 2007;Lang et al, 2014;Capaldo & Giannoccaro, 2015a, 2015b, which, as previously discussed, is required to properly study the relationship between control and SN performance. Second, this method is suitable to capture emergence and adaptation in SNs (Giannoccaro, 2011;Capaldo & Giannoccaro, 2015a, 2015b.…”

Benefits of internal manufacturing network integration

“…These subsidiaries are connected through flows of goods, resources, knowledge and information (Bartlett and Ghoshal, 1989;Vereecke et al, 2006). Recent studies show that these manufacturing networks are a valuable source of competitive advantage (Feldmann et al, 2013;Lang et al, 2014). To achieve competitive advantage decisions have to be made regarding how to integrate a subsidiary into the network to advance the overall manufacturing network outcome.…”