Download Kim, Y. and Lee, J. 1993. Manufacturing strategy and

Kim, Y. and Lee, J. 1993. Manufacturing strategy and production systems: An integrated
framework. Journal of Operations Management. 11(1): 3-15.
----------------------------------------------------------------------------------------------------------------------------------------------The dominant typology for production systems, based on Woodward's 1965 work, names small batch, mass
production, and continuous-process production systems. Two other prominent variations are offered by Abernathy
& Townsend (uncoordinated, segmental and systemic) and Hayes & Wheelwright (jumbled flow/job shop,
disconnected line flow/batch, connected line flow/assembly line and continuous flow). The Woodward scheme no
longer suffices in light of revolutionary manufacturing technologies such as CAD/CAM FMS, and robotics that
increase flexibility, integration, speed and information of production systems. The most important dimension,
flexibility, (eg, economies of scope, ease of process change, small lot sizes, multipurpose facility product varieties,
etc.) needs incorporation in the typology of production systems. "Today, many batch operations are moving to
technologies that are complex in terms of knowledge, automation and integration, yet retain the capacity to product
small runs of different products .. but the evolutionary model no long suffices to describe present technological
developments." Yet an examination of production system typologies in the literature reveals that the dimension of
flexibility is unidentified. For the purposes of this paper, flexibility is operationalized as the frequency of
introducing new products, new production processes, product variety, product features, and R&D effort. The authors
propose a 2x2 matrix for typing production systems, based on the degree of technical flexibility and technical
complexity as figured below:
High
Intermittent
Concurrent
Production
System
Production
System
Degenerate
Continuous
Production
System
Production
System
Technical
Flexibility
Low
Low
High
Technical Complexity
Intermittent Production System -- Flexible in terms of volume, product, process, and routing, but not capable of
continuous flow. The category includes traditional job shop and batch environments.
Continuous Production System -- Inflexible manufacturing with complex knowledge, automation, and integration
technologies. Material flow may be continuous. Automation achieves standardization and low cost. The category
includes traditional assembly line and continuous flow environments.
Concurrent Production System -- Complex knowledge, automation, and integration technologies capable of small
batch sizes. High flexibility is achieved in a quasi-continuous process. This system relies on computers to shorten
manufacturing processes and displaces old strategies with economies of scope. The category includes flexible
manufacturing systems, computer aided manufacturing and the "factory of the future."
Degenerate Production System -- This system lacks new process technology, capital investment, and flexibility
towards low cost. Generally, a technologically deficient, anachronistic factory.
This typology can be linked to appropriate manufacturing strategies. Generally, a manufacturing strategy supports
corporate objectives, generates manufacturing objectives, and focuses manufacturing resource allocation
decision-making. Previous research recommends that the competitive dimensions of manufacturing include cost,
quality, dependability and flexibility; this manufacturing typology primarily employs cost efficiency and
differentiation as dimensions. Here, a typology of manufacturing strategies will be developed based on Porter's
model, which indicates that the three basic strategies are cost leadership, differentiation, and focus, the latter being
the application of cost leadership and differentiation to a specific industrial segment. Therefore, the following 2x2
matrix of manufacturing strategies is derived:
High
Pure
Cost and
Differentiation
Differentiation
No Intended
Pure Cost
Strategy
Leadership
Differentiation
Low
Low
High
Cost Efficiency
A pure cost leadership strategy is viable only if industry costs variances are unexplained by typical economic effects
(eg, learning curves) and requires sustained capital investment and low cost distribution. Pure differentiation
strategy strives for characteristics such as high levels of variety, quality and delivery. A cost and differentiation
strategy can now be pursued simultaneously through new technologies such as FMS and CAM that allow for
economies of scope (ie, efficiency via variety versus volume), rapid change in response to markets, higher
throughputs, etc. While there have been few research attempts to propose a typology for manufacturing strategy
(three are noted), this typology satisfies most of the attributes for good typology (eg, mutually exclusive,
homogenous, collectively exhaustive, etc.) The authors conclude by proposing that:

Intermittent production systems (eg, job shop and batch environments) fit with pure differentiation strategy.

Continuous production systems (eg, continuous flow and assembly line environments) fit with pure cost
leadership strategy.

Concurrent production systems (eg, flexible manufacturing systems and the "factory of the future"
environments) fit with cost and differentiation strategy.
The major calls for future research are to:



identify industry structures that favor concurrent production systems
identify firm characteristics that facilitate the cost and differentiation strategy
identify paths to the concurrent production system
---------------------------------------------------Summarized by Tony Polito, March, 1997.