MIT Sloan Management Review

Understanding the degree of process complexity in a manufacturing operation aids managers in deciding how to organize their factories.

Increased global competition means that industry and government must work together to ensure that manufacturers have support networks of transportation, telecommunications, services, and knowledge centers.

In a global supply chain, managers must plan for longer lead times, expensive air freight, higher inventory levels, poor sales-forecasting accuracy, and significant delays in resolving technical problems. However, the reduction of defects and engineering change orders associated with lean production can stabilize the supply chain.

The persistent U.S. trade imbalance may have two causes: a declining manufacturing base and the shift of the U.S. economy toward services. Correcting the imbalance will require a substantial commitment to expand America’s manufacturing base.

Every action has an equal and opposite reaction. We can apply this Newtonian principle to the vertical supply chain: for every part outsourced by an original equipment manufacturer (OEM), there is an equal and opposite opportunity for a parts supplier to furnish that part.

Much has been written in recent years about flexible factories and flexible manufacturing systems (FMS), but the literature has been largely theoretical; managers who are interested in making their factories more flexible have little empirical research on which to base their decisions.

The competitiveness of U.S. corporations, particularly manufacturing firms, declined during the 1980s. The decade witnessed serious inroads by foreign firms into traditional domestic markets. In capital goods, for example, the import penetration ratio rose from less than 15 percent to nearly 40 percent. Some indicators of U.S.

ALTHOUGH RETURNS POLICIES HAVE BEEN WIDELY USED FOR MANY YEARS, THEY CONTINUE TO BE A SOURCE OF CONTROVERSY. THE AUTHORS present a framework that explains when and how to adopt returns policies. They analyze the benefits and costs of accepting returns from distributors, and also compare returns policies to alternative ways of coordinating the distribution channel.

JAPAN’S DISTRIBUTION SYSTEMS, LONG THE TARGET OF CRITICISM, ARE CHANGING. DEREGULATION, NEW MANUFACTURING IMPERATIVES, consumer behavior, and the economy have interacted to reshape Japanese distribution. The trends have important implications for global business, since the system now offers areas of opportunity for Western manufacturers and retailers.

In recent years, changes in the business environment have made it harder for firms to maintain long-term sales growth and profitability levels. Global competition has increased dramatically. A larger selection of products and services is available to the same set of buyers, with little growth in overall markets.