Manufacturing Networks: Critical Factors to Successful Collaboration

Journal article, 2004

The competitive situation for Small and Medium Sized Enterprises, SME’s, has become intensified during the last few years. Large customers, such as within the automotive industry, have increased the outsourcing of their manufacturing capacity and reduced the number of suppliers. At the same time the large systems integrators place demands on their suppliers to actively participate in the product development and to take full responsibility for manufacturing as well as to deliver complete systems or subsystems. Due to the limited capacity of the suppliers, in terms of the scarcity of resources and limited knowledge base, suppliers need to collaborate in networks. The purpose of this study is to identify critical factors to successful network collaborative settings. In this paper we also introduce a four dimensional tentative framework, in terms of surface of integration, the scope of integration, the time horizon of integration, and the intensity of integration. This framework can be used to analyze how well collaborative networks are developed from three aspects of corporate integration, in terms of structural design of the network, the design of the work flow in collaborative settings, and aspect of handling the psychological and social boundaries among people, that management has to handle in order to increase the degrees of network collaboration. This tentative framework is suggested as an analytical tool that can be used in order to understand how different collaborative networks are developed in terms of the network constellation, output of the collaborative process, as well as duration and robustness of the network.