Capability mapping to improve manufacturing network performance: how a factory can target growth
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Date
2021-09-21
Publication Type
Journal Article
ETH Bibliography
yes
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Abstract
Purpose
This paper explores growth opportunities for a contract manufacturer (CM), which operates a global virtual manufacturing network (GVMN). The Swiss factory should play a profitable role in the holding's competitive strategy, in spite of lower-cost alternatives within its network.
Design/methodology/approach
The study applied a design science method over a period of two years of collaboration with the partner firm to complete three iterations of solution incubation and refinement.
Findings
The design artefact is a growth strategy for a CM with independently-managed, heterogeneous sites. A novel capability mapping tool reveals competitive advantage by deploying the GVMN as an order fulfilment system. Engineering and sales are integrated with production to project higher revenue streams in multiple locations including Switzerland.
Research limitations/implications
The research expands the operations management (OM) focus on optimization and continuous improvement. Results indicate that local and global manufacturing capabilities can be configured to target network performance, implying that the smile curve flattens in certain GVMN configurations. The exploratory case study is limited by a lack of statistical generalizability and is specific to the contract electronics manufacturing industry.
Practical implications
Managing manufacturing as a network can restore feed-forward and feedback loops, which are disrupted by de-verticalization and externalization. The visualization positions a Swiss plant in an inimitable role, serving growth accounts, which require co-development. The order fulfilment strategy and capability maps can be adapted to other GVMNs.
Social implications
The study presents an alternative to shuttering high-cost locations using performance improvements instead of protectionist interventions. This could have a material impact on de-industrialization in developed nations like Switzerland.
Originality/value
The strategy innovation originates in practice. Its synthesis drew on multiple disciplines to position OM as a strategic lever for competing in global value chains (GVCs). The author finds alternatives to the internationalization logic of cost arbitrage and adds to developed country studies. This is an OM contribution to the broader debate on globalization dominated by the social sciences.
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Publication status
published
External links
Editor
Book title
Journal / series
Volume
32 (6)
Pages / Article No.
1335 - 1356
Publisher
Emerald
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
Action research; Dynamic capabilities; Value chain; Strategy formulation; Global manufacturing networks; Competitive manufacturing