Publication Type

Journal Article

Version

submittedVersion

Publication Date

1-2023

Abstract

The path for elevating the role of manufacturing in the company strategy in the last few decades has been rather clear: Improve the basic production capabilities-typically quality, reliability, lead times, and cost efficiency of production processes. Leading Japanese companies, like Toyota, showed the way. But as many have heeded the advice and followed suit, this approach has become essentially a defensive strategy; you must do it not to fall behind. Has manufacturing lost its potential to create capabilities on which a company's strategy can rest? Our answer is absolutely not. In fact, unlike before, manufacturing has multiple paths for creating a competitive advantage and these paths require development of new and often nontraditional capabilities. We identify five sets of new capabilities, and since it is hard to excel in all of them, we provide a framework for choosing the right mix depending on the company's business strategy. The framework focuses on the implications of two recent trends: increasing information density embedded in products and increasing connectedness of manufacturing processes. We suggest specific mixes of the five groups of capabilities that can support and accelerate a company's strategy to exploit these trends. We use examples from three multinationals to illustrate the process. These new opportunities change the traditional role of manufacturing executives. Their focus will need to shift exceedingly to collaborating and interfacing with colleagues in other functions as well as managing relationships beyond the boundaries of the company.

Keywords

connectedness of manufacturing processes, information density of products, manufacturing strategy, supply chain capabilities

Discipline

Operations and Supply Chain Management | Strategic Management Policy

Research Areas

Operations Management

Publication

Production and Operations Management

Volume

32

Issue

1

First Page

227

Last Page

236

ISSN

1059-1478

Identifier

10.1111/poms.13832

Publisher

Wiley

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1111/poms.13832

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