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Development of Production Management: From Site to Network Optimisation

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Strategic Management of Global Manufacturing Networks

Part of the book series: Management for Professionals ((MANAGPROF))

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Abstract

In this chapter we shed some light on the relation between operations management and manufacturing networks. After that we focus on the development of network management evolving from site management. The third section is dedicated to three classic optimisation approaches at site level. They are intended to argue in favour of the dire necessity to address the network level as well. Some ideas for the further development of production systems towards production network systems will close this chapter.

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Notes

  1. 1.

    Cf. Friedli (2006), for example, for an understanding of this term and manufacturing management more specifically.

  2. 2.

    Rudberg and Olhager (2003), p. 29f.

  3. 3.

    For example Aikens (1985), Canel and Khumawala (1996) or Kinkel (2004).

  4. 4.

    For example Ferdows (1997a), Vokurka and Davis (2004) or Vereecke et al. (2006).

  5. 5.

    Shi and Gregory (1998), p. 198 and Khurana and Talbot (1999), p. 2.

  6. 6.

    Miltenburg (2009).

  7. 7.

    For example Shi and Gregory (2005).

  8. 8.

    Cf. Ferdows (1997b) and De Meyer and Vereecke (1994).

  9. 9.

    The term production network system was made popular by Shi and Gregory (1998) and Shi (2003).

  10. 10.

    Thomas (2013), p. 44.

  11. 11.

    Cf. Porter (1986); Rudberg and Olhager (2003), p. 30 and Friedli et al. (2011), p. 611f.

  12. 12.

    Porter (1986), p. 23 “Configuration/coordination determines the ongoing competitive advantages of a global strategy which are additive to competitive advantages a firm derives/possesses from its domestic market positions.”

  13. 13.

    Shi and Gregory (1998), p. 201 and Colotla et al. (2003), p. 1187ff.

  14. 14.

    Cf. Porter (1986) and Rudberg and Olhager (2003), p. 30.

  15. 15.

    Wheelwright (1984).

  16. 16.

    Shi and Gregory (1998) and Miltenburg (2009).

  17. 17.

    Cf. De Toni and Parussini (2010).

  18. 18.

    Meijboom and Vos (1997) and Cheng et al. (2011).

  19. 19.

    Porter (1986), p. 15ff.

  20. 20.

    Porter (1986), p. 17.

  21. 21.

    Ibid.

  22. 22.

    See Owen and Daskin (1998) for an overview of the mathematical models, Kinkel (2004), Meyer (2006), p. 36ff and Kinkel and Zanker (2007) on the subject of key factors, methods and approaches for site selection. Kinkel and Zanker (2007) also examine various methods for assessing site locations.

  23. 23.

    See Paterson and Brock (2002) for an overview of the literature regarding the strategic roles of subsidiaries.

  24. 24.

    See Bartlett and Ghoshal (1990).

  25. 25.

    See Prahald and Doz (1987).

  26. 26.

    See Gupta and Govindarajan (1991).

  27. 27.

    See Ferdows (1997a, 1989).

  28. 28.

    See Vereecke and Van Dierdonck (2002).

  29. 29.

    See Maritan et al. (2004) and Feldmann and Olhager (2009b, 2011).

  30. 30.

    Shi and Gregory (1998), p. 197.

  31. 31.

    Shi and Gregory (1998), p. 197f.

  32. 32.

    See Skinner (1974).

  33. 33.

    Hayes and Schmenner (1978), p. 110ff.

  34. 34.

    See Schmenner (1982) and Hayes et al. (2005).

  35. 35.

    Jacob (2006), p. 29ff.

  36. 36.

    Cf. Meyer (2005) as an example of the strategic-static optimisation approach.

  37. 37.

    See Jacob (2006).

  38. 38.

    DuBois et al. (1993), p. 309ff; Miltenburg (2009), p. 6185f, and Shi and Gregory (1998), p. 211.

  39. 39.

    Stremme (2000), p. 214ff.

  40. 40.

    Meyer and Jacob (2008), p. 164ff.

  41. 41.

    Ghoshal et al. (1994); Tsai and Ghoshal (1998) and Luo (2005).

  42. 42.

    Flaherty (1989), p. 95ff.

  43. 43.

    See Ferdows (2006).

  44. 44.

    See Ferdows (2006).

  45. 45.

    Jacob et al. (2006), p. 274ff.

  46. 46.

    See Rudberg and West (2008).

  47. 47.

    Rudberg and West (2008), p. 95ff.

  48. 48.

    See Meijboom and Vos (1997), De Meyer and Vereecke (1994).

  49. 49.

    See McGrath and Bequillard (1989).

  50. 50.

    See Shi et al. (1997); Shi and Gregory (1998) and Shi (2003).

  51. 51.

    See Colotla et al. (2003).

  52. 52.

    See Aikens (1985); Love et al. (1988); Canel and Khumawala (1996) and Canel and Khumawala (2001).

  53. 53.

    See Schill (1990); Kinkel (2004) and Meyer and Jacob (2008).

  54. 54.

    Bartmess and Cerny (1993), p. 84.

  55. 55.

    Eversheim (1996), pp. 9–44.

  56. 56.

    Schmenner (1979), p. 132.

  57. 57.

    This point should not be underestimated. Since a system needs to be set up for the interchange of information, to enable an adjust level of manufacturing. Cf. also Galbraith (1990), p. 59.

  58. 58.

    Ferdows (1997b), p. 74.

  59. 59.

    Galbraith (1990), p. 56.

  60. 60.

    Rifkin (2000), p. 41 cites Harvard professors Stan Davis and Christopher Meyer with the following statements: “Capital as inventory of capacity must give way to ‘just-in-time’ capital as access to the use of capacity” and “use it, don’t own it.”

  61. 61.

    Reich (1991), p. 78.

  62. 62.

    Feldmann et al. (2009), p. 105f and Vereecke and Van Dierdonck (2002), p. 513.

  63. 63.

    Feldmann and Olhager (2009b), p. 1ff.

  64. 64.

    Vereecke and Van Dierdonck (2002), p. 509.

  65. 65.

    Vereecke et al. (2006), Johansen and Riis (2005). A number of role models for multinational companies have also been researched (see for example Gupta and Govindarajan (1991) and Prahalad and Doz (1987)). They are not presented here as they are not explicitly related to manufacturing sites.

  66. 66.

    Vereecke et al. (2006), p. 1741f.

  67. 67.

    Johansen and Riis (2005), p. 210ff.

  68. 68.

    Ferdows (1997a), p. 78f.

  69. 69.

    Cheng et al. (2011), p. 1315.

  70. 70.

    Vereecke and De Meyer (2009), p. 9f.

  71. 71.

    Cf. also Friedli (2006), p. 145ff and Friedli and Schuh (2012), p. 47ff.

  72. 72.

    Womack et al. (1990, 1991).

  73. 73.

    It is, for example, today being considered whether or not this approach lends itself to being applied to the rather shabbily treated manufacturing of pharmaceutical companies. Discussions are underway with the industry for conducting a large-scale study in collaboration with ITEM-HSG.

  74. 74.

    A whole series of studies attested to this advantage, see for example Abernathy et al. (1983) and Altshuler et al. (1984).

  75. 75.

    Jones (1994), p. 141.

  76. 76.

    Womack et al. (1991): “It is wrong to equate ‘Japanese’ with ‘lean’ production and ‘Western’ with ‘mass’ production.” Krafcik (1988), p. 41 talks of the need to dispell this myth: “I mention this example as means of overturning a common myth about the auto industry - the myth says productivity or quality performance is more or less predetermined by an assembly plant’s location.” Pilkington (1998), p. 33 determines that the study was heavily dependent on Toyota.

  77. 77.

    By which the reference is to company and not national culture.

  78. 78.

    Krafcik (1988), p. 42: “We have found overwhelming evidence that high technology is often not the solution to poor manufacturing performance if the technology is employed without a suitable production management policy.”

  79. 79.

    Womack et al. (1991); Krafcik (1988) and Jones (1994).

  80. 80.

    Krafcik (1988), p. 43.

  81. 81.

    For example, the comparison of GM’s new, highly-automated plants with the joint venture between GM and Toyota (NUMMI) proved very interesting. Although of a lower level of automation, NUMMI’s performance in terms of productivity and quality were markedly better (Krafcik 1988, p. 45). Pilkington also held that an understanding of lean manufacturing as merely JIT and TQM falls short (Pilkington 1998, p. 32): “By the 1990s, analysts were questioning the rise of single techniques for manufacturing supremacy, as faltering firms discovered that individual techniques required an overlapping complex of supporting systems.”

  82. 82.

    See for example Hammer and Champy (1993).

  83. 83.

    Jones (1994), p. 143.

  84. 84.

    Jones (1994), p. 144.

  85. 85.

    Central element being the Kanban system, see Pilkington (1998), p. 35: “Apart from designing a system with low levels of labor costs, the heart of making the Toyota system work is the kanban - a system that links one production operation to the next, matching the production of parts closely to the demand established in the final assembly area.”

  86. 86.

    Womack et al. (1991), p. 158f.

  87. 87.

    Jones (1994), p. 145.

  88. 88.

    See Womack and Jones (1994).

  89. 89.

    Cf. Womack and Jones (1994), although even in the original study by Japanese manufacturers, great attention was paid to the integration of suppliers (Womack et al. 1991, p. 145ff).

  90. 90.

    Burgess (1994), p. 24.

  91. 91.

    McCurry and McIvor (2002), p. 81.

  92. 92.

    Friedli and Schuh (2012), p. 142.

  93. 93.

    This benchmark is today considered the largest independent benchmark of Operational Excellence in the pharmaceutical industry, see also Friedli et al. (2006, 2010, 2013).

  94. 94.

    For a detailed classification of each strategy see Shi and Gregory (1998).

  95. 95.

    Jacob (2006); Justus (2009) and Ude (2010).

  96. 96.

    Colotla (2002, 2003).

  97. 97.

    Platts and Gregory (1990); Shi and Gregory (1998) and Shi (2003).

  98. 98.

    Christodoulou et al. (2007) and Grallert et al. (2010).

  99. 99.

    Christodoulou et al. (2007).

  100. 100.

    The success story of Toyota’s production system and lean manufacturing can be found in Liker (2007) and elsewhere.

  101. 101.

    Ude (2010), p. 54 provides an up-to-date overview of such approaches.

  102. 102.

    Network optimisation approaches are covered in Shi and Gregory (1998); Shi (2003) and Christodoulou et al. (2007).

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Authors and Affiliations

  1. ITEM-HSG, University of St. Gallen, St. Gallen, Switzerland

    Thomas Friedli

  2. REHAU GmbH, Muri b. Bern, Switzerland

    Andreas Mundt & Stefan Thomas

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  1. Thomas Friedli
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Friedli, T., Mundt, A., Thomas, S. (2014). Development of Production Management: From Site to Network Optimisation. In: Strategic Management of Global Manufacturing Networks. Management for Professionals. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-34185-4_2

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