Manufacturing strategy in multi-plant networks – a multi-case study on decision-making authority, network capabilities and competitive advantages

Modern manufacturing firms are globalised organisations that regularly operate multi-plant networks. Network configuration elements, e.g. plant roles or the multi-plant strategy, were intensively examined by scholars. Another complex and less studied task is coordinating the manufacturing strategy of the plants in the network. Efficient distribution of competences and decision-making authorities is crucial for decision-makers. An appropriate level of autonomy has to be found that determines which decisions are centralised and which are delegated to the decentralised plants. The interaction of network coordination and configuration with network capabilities and competitive advantages is examined in this article using an empirical multi-case study. We focus on how manufacturing strategy decisions are made in the intra-firm network and how the distribution of decision-making authorities affects the network capabilities. Results indicate that both network coordination and configuration affect network capabilities, which in turn affect competitive advantages. Network thriftiness reduces costs, while mobility and flexibility promote delivery capabilities and learning effects improve quality and costs. A conceptual research model is developed as a starting point for future studies in this emerging research area. Besides, managers are provided with guidance on the efficient design of distributed manufacturing networks to achieve the desired competitive advantages.