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The Lead Factory Concept: Benefiting from an Efficient Knowledge Transfer

Author

Listed:
  • Patricia Deflorin

    () (Institute for Strategy and Business Economics, University of Zurich)

  • Helmut Dietl

    () (Institute for Strategy and Business Economics, University of Zurich)

  • Markus Lang

    () (Institute for Strategy and Business Economics, University of Zurich)

  • Maike Scherrer-Rathje

    () (Institute for Technology Management, University of St. Gallen)

Abstract

This paper analyses the effectiveness of knowledge transfer between research and development (R&D) and intra-firm production units. Specifically, two distinct network structures are compared: the lead factory concept and traditional networks of R&D and production. Based on an analytical two-stage decision model for prototype and serial production, we highlight relevant factors that determine the relative advantages and disadvantages of the lead factory concept in comparison to a traditional network structure. In particular, the lead factory concept is more cost-efficient than the traditional network if there are a high number of production plants, the adaptation costs for implementing the transferred prototype from the lead factory to the plant are low, the manufacturing costs for the prototype are high, and the manufacturing processes are not highly specific or knowledge intensive.

Suggested Citation

  • 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).
  • Handle: RePEc:iso:wpaper:0127
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    File URL: http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/127_ISU_full.pdf
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    Cited by:

    1. 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).

    More about this item

    Keywords

    Operations Management; Manufacturing; Lead Factory; Knowledge Transfer; Cost Benefit Analysis;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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