An Empirical Study of Flexibility in Manufacturing

  • Fernando F. Suarez, Michael A. Cusumano and Charles H. Fine
  • October 15, 1995

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. In particular, a number of questions have yet to be answered: What are the types of flexibility that affect a company’s competitive position? How can different types of flexibility be achieved? What kinds of tradeoffs must managers make between flexibility and productivity, quality, or other performance dimensions?

To address some of these questions, we studied thirty-one printed circuit board (PCB) plants belonging to fourteen electronics firms in the United States, Japan, and Europe.1 Although our data originates from only one industry, we believe they have important implications for manufacturers elsewhere. Specifically, our research has implications for plant automation, worker participation, relationships with suppliers, wage schemes, and component reusability. We found significant relationships among different types of flexibility and discovered that increased flexibility in certain areas had no adverse quality and cost effects. In this paper, we propose a framework for incorporating flexibility into mainstream strategy analysis, describe our research, and explain our findings.

Flexibility and Strategy

The literature on manufacturing flexibility that we used as background is divided into two areas: analytical models and empirical studies. The analytical models have come almost exclusively from the fields of operations research and operations management. According to Fine’s classification scheme, there have been four main concerns in the modeling literature: (1) flexibility and life cycle theory, (2) flexibility as a hedge against uncertainty, (3) interactions between flexibility and inventory, and (4) flexibility as a strategic variable that influences competitors’ actions.2

We divide the empirical literature into four groups. The first is concerned with developing taxonomies of flexibility and is represented by the work of Gerwin; Buzacott; Mandelbaum; Browne; Slack; Kumar and Kumar; and Zelanovic.3 The second group deals with the relationship between flexibility and performance and includes work by Jaikumar; Tombak; Tombak and de Meyer; and Fiegenbaum and Karnani.4 The third group covers historical and economic analyses of flexibility and tends to view flexibility as an important attribute for the competitiveness of a firm, industry, or country. This group includes research by Piore and Sabel; Harrigan; Storper and Christopherson; Adler; Womack, Jones, and Roos; and Cusumano.