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Distribution of manufacturing strategy decision-making in multi-plant networks

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  • Jan Olhager
  • Andreas Feldmann

Abstract

This paper is concerned with the manufacturing strategy decision-making structure in multi-plant networks, i.e. how strategic manufacturing decision-making authority is distributed between the network level (i.e. headquarters) and the plant level. We use survey data from 107 manufacturing plants. This research identifies three different structures: centralised at the network headquarter, decentralised to the plant and integrated between central headquarters and the plant. All decision areas follow the same pattern, i.e. full centralisation, full decentralisation or full integration. We do not find any support for that some decisions are centralised while others are decentralised. Product volume and process type are significantly associated with the choice of decision-making structure. In particular, high product volumes are associated with a centralised approach, and a low degree of process flow orientation (such as project manufacturing, job shop and flow shop) is associated with a decentralised approach. The integrated approach is associated with a combination of lower product volumes and higher degrees of flow orientation. Choosing the right decision-making structure for the product and process mix seems to lead to high levels of operational performance.

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  • Jan Olhager & Andreas Feldmann, 2018. "Distribution of manufacturing strategy decision-making in multi-plant networks," International Journal of Production Research, Taylor & Francis Journals, vol. 56(1-2), pages 692-708, January.
    • Handle: RePEc:taf:tprsxx:v:56:y:2018:i:1-2:p:692-708
    DOI: 10.1080/00207543.2017.1401749
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    Cited by:

    1. Hamann-Lohmer, Jacob & Bendig, Miriam & Lasch, Rainer, 2023. "Investigating the impact of digital transformation on relationship and collaboration dynamics in supply chains and manufacturing networks – A multi-case study," International Journal of Production Economics, Elsevier, vol. 262(C).
    2. Dohale, Vishwas & Gunasekaran, Angappa & Akarte, Milind & Verma, Priyanka, 2021. "An integrated Delphi-MCDM-Bayesian Network framework for production system selection," International Journal of Production Economics, Elsevier, vol. 242(C).
    3. Flora Bellone & Cilem Selin Hazir & Toshiyuki Matsuura, 2022. "Adjusting to China competition: Evidence from Japanese plant‐product‐level data," Review of International Economics, Wiley Blackwell, vol. 30(3), pages 732-763, August.
    4. Chiara Freichel & Nicolas Neis & Axel Winkelmann, 2021. "A Taxonomy For Interorganizational Production Networks," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 21, pages 167-187.

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