Speed-to-market, agile manufacturing, and the virtual corporation — terms firmly rooted in the lexicon of U.S. business —reflect an increasing awareness that competing successfully in the global economy will require extensive changes in the way U.S. corporations operate. In most industries, rapid worldwide political and economic shifts are increasing the number and power of new international competitors. Former socialist countries are entering the capitalist marketplace with vigor. What were previously Third World countries in Southeast Asia and Latin America are producing sophisticated goods and services. These new competitors are now smarter and more productive because their managers are better educated and have technical expertise and because the rapid cross-border diffusion of information and technology gives them nearly instant access to the latest know-how and equipment.
International customers are also more sophisticated and demanding. With access to an unparalleled variety of products from all over the world, they can more easily identify value. As a result, they have become more selective purchasers. They expect quality, reliability, and competitive pricing but also want customized products that are delivered quickly.1 Much of their power lies in shifting product allegiances, which typically focus on goods that provide greater immediate value.
Although these trends have already been explored extensively, most discussions of manufacturing agility and business process reengineering focus on how firms’ internal characteristics must change.2 Far less attention has focused on the external infrastructure that firms need to respond rapidly to changing global market conditions. To optimize agility and more effectively sustain virtual enterprises, manufacturers require a symbiotic business environment at the national, regional, and local levels to provide advanced infrastructure, logistical, and institutional support. Although many states, metropolitan areas, and cities in the United States are providing elements of that infrastructure, few are integrating or coordinating them.
In this article, we identify the components of the logistical support system that are needed to stimulate agile manufacturing, describe the reactive approaches of U.S. industry groups, cities, and government agencies, and examine the strategic integration of the components into a unified business support system, such as the Global TransPark (GTP) experiment in North Carolina.
Emergence of Agile Business
Agile manufacturing is “the ability of a company to thrive in a competitive environment of continuous and unanticipated change.”3 In nearly all industries, firms are adapting to growing international demands for flexibility and speed.
1. J.D. Lewis, The Connected Corporation: How Leading Companies Win through Customer-Supplier Alliances (New York: Free Press, 1995); and
J.A. Cooke, “Beyond Quality — Speed,” Traffic Management, volume 33, June 1994, pp. 32–35.
2. S.L. Goldman, R.N. Nagel, and K. Preiss, Agile Companies and Virtual Organizations (New York: Van Nostrand Reinhold, 1994); and
P. McHugh, G. Merli, and W.A. Wheeler III, Beyond Business Process Reengineering: Towards the Holonic Enterprise (New York: Wiley, 1995).
3. G.E. Herrin, “Agile Manufacturing,” Modern Machine Shop, volume 67, May 1994, pp. 144–146; quote at p. 144.
4. W. Brown and F. Swaboda, “Ford’s Vision: A Company without Borders,” Washington Post National Weekly Edition, 24–30 October 1994, p. 18; and
J.B. Quinn and F.G. Hilmer, “Strategic Outsourcing,” Sloan Management Review, volume 35, Summer 1994, pp. 43–55.
5. J. Bonney, “Toyota’s Global Conveyor Belts,” American Shipper, volume 36, number 9, 1994, pp. 50–53.
6. D. Winter, “Agile Manufacturing,” Ward’s Auto World, volume 30, April 1994, pp. 40–42.
7. A.D. Baker, “Agility with Performance in an Autonomous Agent Architecture: A GE Case Report,” in Proceedings of the Agility Manufacturing Enterprise Forum: Creating the Agile Organization (Atlanta, Georgia: Agility Manufacturing Enterprise Forum, 1995), pp. 354–367.
8. J.S. Sheridan, “Agile Manufacturing: Stepping beyond Lean Production,” Industry Week, volume 242, 19 April 1993, pp. 30–40.
9. T. Agmon and R.L. Drobnik, eds., Small Firms in Global Competition (New York: Oxford University Press, 1994); and
R.H. Hayes and G.P. Pisano, “Beyond World Class: The New Manufacturing Strategy,” Harvard Business Review, volume 72, January–February 1994, pp. 77–86.
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12. W.H. Davidow and M.S. Malone, The Virtual Corporation (New York: HarperCollins, 1992); and
S.E. Bleeker, “The Virtual Organization,” The Futurist, volume 28, March–April 1994, pp. 9–14.
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14. For some notable exceptions, see: S.A. Rosenfeld, Industrial Strength Strategies: Regional Business Clusters and Public Policy (Aspen, Colorado: The Aspen Institute, 1995).
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16. Organization for Economic Cooperation and Development, Revitalizing Urban Economies (Paris: OECD, 1987).
17. D.A. Rondinelli and J.N. Behrman, “Where Will High-Tech Industries Invest in the 1990s?,” Business & the Contemporary World, volume 3, Summer 1991, pp. 29–39.
18. R. Moss Kanter, “Thriving Locally in the Global Economy,” Harvard Business Review, volume 73, September–October 1995, pp. 151–160.
19. North Carolina Global TransPark Authority, The North Carolina Global TransPark: A Partnership for Progress (Raleigh, North Carolina: NCGTP, 1995).
20. North Carolina Global TransPark Authority, The North Carolina Global TransPark: Executive Summary, Master Planning, and Environmental Study (Raleigh, North Carolina: NCGTP, 1994).
21. The GTP is the result of joint investment by federal and state governments, private companies, tenant firms, and thirteen county governments in the eastern region of North Carolina. To date, more than $285 million from public and private sources has been committed to the development of the GTP. Over the life of the project, it is expected that private companies will cumulatively invest billions of dollars in tenant-owned facilities and will operate most of the common-use systems and facilities.
22. D. Harper, “New Techniques Force Changes in Shipping on Atlantic,” Journal of Commerce and Commercial, 24 October 1994, p. 10-A.
23. “Foreign-Trade Zones in a JIT Environment,” Global Trade & Transportation, volume 113, October 1993, pp. 46–49.
24. R. Hekoff, “Delivering the Goods,” Fortune, 24 November 1994, pp. 64–78.
25. Cited from an SRI International study of traffic congestion in California. See:
J. Candler, “Smart Cars, Smart Roads,” Nation’s Business, volume 84, February 1996, pp. 31–34.
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R. Ropelewski and J.R. Wilson, “Boeing Rolls Out 777,” Interavia, volume 49, April 1994, pp. 13–20.
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29. V. Pandiarajan and R. Patun, “Agile Manufacturing Initiatives at Concurrent Technologies Corporation,” Industrial Engineering, volume 26, February 1994, pp. 46–49.
30. Joel Garreau coined the term. See:
J. Garreau, Edge City: Life on the New Frontier (New York: Doubleday, 1991).
31. “Foreign Trade Zones in a JIT Environment” (1993).
32. R. Moss Kanter, World Class: Thriving Locally in the Global Economy (New York: Simon & Schuster, 1995).
33. E. Malizia, “The Location Attractiveness of the Southeast to High-Technology Manufacturers,” in D. Whittington, ed., High Hopes for High-Technology (Chapel Hill, North Carolina: University of North Carolina Press, 1985), pp. 173–190.
34. K. Labich, “The Geography of an Emerging America,” Fortune, 27 June 1994, pp. 88–94.