IDEAS home Printed from
   My bibliography  Save this article

Principles on the Benefits of Manufacturing Process Flexibility


  • William C. Jordan

    (Operating Sciences Department, General Motors Research and Development Center, Warren, Michigan 48090)

  • Stephen C. Graves

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)


Increasing manufacturing flexibility is a key strategy for efficiently improving market responsiveness in the face of uncertain future product demand. Process flexibility results from being able to build different types of products in the same plant or production facility at the same time. In Part I of this paper, we develop several principles on the benefits of process flexibility. These principles are that 1) limited flexibility (i.e., each plant builds only a few products), configured in the right way, yields most of the benefits of total flexibility (i.e., each plant builds all products) and 2) limited flexibility has the greatest benefits when configured to chain products and plants together to the greatest extent possible. In Part II, we provide analytic support and justification for these principles. Based on a planning model for assigning production to plants, we demonstrate that, for realistic assumptions on demand uncertainty, limited flexibility configurations (i.e., how products are assigned to plants) have sales benefits that are approximately equivalent to those for total flexibility. Furthermore, from this analysis we develop a simple measure for the flexibility in a given product-plant configuration. Such a measure is desirable because of the complexity of computing expected sales for a given configuration. The measure is \prod (M*), the maximal probability over all groupings or sets of products (M) that there will be unfilled demand for a set of products while simultaneously there is excess capacity at plants building other products. This measure is easily computed and can be used to guide the search for good limited flexibility configurations.

Suggested Citation

  • William C. Jordan & Stephen C. Graves, 1995. "Principles on the Benefits of Manufacturing Process Flexibility," Management Science, INFORMS, vol. 41(4), pages 577-594, April.
  • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:4:p:577-594

    Download full text from publisher

    File URL:
    Download Restriction: no


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:41:y:1995:i:4:p:577-594. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.