Operation and performance of international manufacturing networks

Abstract

This paper seeks to explore the interplay and interdependencies of factory and network capabilities. This issue has become progressively more important as companies seek to manage dispersed networks of plants capable of responding to increasingly competitive and volatile environments. The paper draws on field studies of two international manufacturing networks comprising eight factories in six countries. The research used a case‐based methodology that combined multiple interviews and ethnographic research at each location. Factory and network level capabilities were shown to simultaneously affect a suggested set of dimensions of operational performance and a matrix was proposed to visualise this interdependency. The case studies show that decisions regarding factory and network issues are often taken independently of each other despite the fact that they may be heavily interdependent. The cases also highlight the critical dimension of time in factory and network level capability building as well as the need for developing strategy processes that take into account the interdependency of factory and network capabilities.

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