Determinants of the Optimal Network Configuration and the Implications for Coordination
AbstractThis paper develops a simulation model to compare the performance of two stylized manufacturing networks: the lead factory network (LFN) and the archetype network (AN). The model identifies the optimal network configuration and its implications for coordination mechanisms. Using an NK simulation model to differentiate between exogenous factors (configuration) and endogenous factors (coordination), we find low complexity of the production process, low transfer costs and high search costs, as well as a larger number of manufacturing plants benefit LFN compared to AN. Optimally coordinating the chosen network configuration of LFN might require to fully transfer knowledge in the short run but to transfer nothing in the long run. Moreover, a late knowledge transfer from the lead factory to the plants increases the pre-transfer performance of LFN but results in a larger performance drop, yielding a lower short-run but a higher long-run performance of LFN.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0152.
Length: 39 pages
Date of creation: Dec 2011
Date of revision:
Manufacturing network; manufacturing plant; global operations management; lead factory; knowledge transfer;
Other versions of this item:
- Patricia Deflorin & Helmut M. Dietl & Markus Lang & Eric Lucas, 2011. "Determinants of the Optimal Network Configuration and the Implications for Coordination," Working Papers 314, University of Zurich, Department of Business Administration (IBW).
- NEP-ALL-2012-01-03 (All new papers)
- NEP-CMP-2012-01-03 (Computational Economics)
- NEP-CSE-2012-01-03 (Economics of Strategic Management)
- NEP-NET-2012-01-03 (Network Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ernst, Dieter & Kim, Linsu, 2002. "Global production networks, knowledge diffusion, and local capability formation," Research Policy, Elsevier, vol. 31(8-9), pages 1417-1429, December.
- Patricia Deflorin & Helmut Dietl & Markus Lang & Maike Scherrer-Rathje, 2010. "The Lead Factory Concept: Benefiting from an Efficient Knowledge Transfer," Working Papers 0127, University of Zurich, Institute for Strategy and Business Economics (ISU).
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