What Really Makes Factories Flexible?

Manufacturing managers in a broad array of industries agree that achieving low cost and high quality is no longer enough to guarantee success. In the face of fierce, low-cost competition and an army of high-quality suppliers, companies are increasingly concentrating on flexibility as a way to achieve new forms of competitive advantage. Having acknowledged the importance of flexibility, however, managers in industry after industry are finding it frustratingly difficult to improve. In a quest to help manufacturing managers begin to understand why the improvement of flexibility has been so elusive, author David Upton embarked on a study of more than 60 factories in North America that manufacture fine paper. Upton found that, contrary to conventional wisdom, the flexibility of the plants depended much more on the people in the operation than any technical factor. At many plants, managers have embraced computer integration as the solution to the growing need to forge new capabilities. In reality, computer systems are often a quick fix that helps managers to avoid the tremendously difficult task of defining precisely what kind of flexibility they require from a plant and then setting goals, revamping measurements and compensation systems, building training programs, and overhauling work practices in order to achieve that flexibility. If a plant manager is to set about improving a plant's flexibility, where should he or she start? The type of flexibility a given company should emphasize depends strongly on its competitive environment