PRODUCTION NETWORK FLEXIBILITY

Paper in proceeding, 2011

Purpose of this paper The purpose of this paper is to understand how manufacturing flexibility impacts an insourcing process. Design/methodology/approach The paper is based on a case study of an insourcing process, covering a factory shutdown in Holland and the transfer of production of pumps to Sweden. Analysis of manufacturing flexibility was based on Koste and Malhotra’s (1999) ten dimensions. Findings The findings show that there is a linkage between the efficiency of the insourcing process and manufacturing flexibility. Through studying the insourcing process, the importance of the flexibility of other parts of the production network became evident. As focusing on the manufacturing flexibility of a production network it was seen that the new product and modification flexibility dimensions should not be on the plant level in the manufacturing flexibility hierarchy. Instead a new level in the manufacturing flexibility hierarchy should be introduced, the production network level, where new product and modification flexibility belong. Further, in order to capture the flexibility in transferring knowledge and technology as well as the start-up of production, an additional manufacturing flexibility dimension should be added, transfer flexibility. Practical implications To identify and adjust areas with low manufacturing flexibility hampering the insourcing process, practitioners can use the model with the added dimension before initiating an insourcing process. What is original/value of paper The paper contributes to an increased understanding of problems relating to insourcing and how these relate to the flexibility of the flexibility of the whole production network.