Prioritization of Environmental Uncertainty and Manufacturing Flexibility for Labor-Intensive Industry: A Case Study on Ready-Made Garment Industries in Bangladesh

Abstract

Manufacturing flexibility is a widely accepted manufacturing strategy for mitigating the negative impacts of environmental uncertainty on firm performance and is also a required strategic attribute to acclimatize mass customization and agile manufacturing. Manufacturing flexibility has been adequately studied for technology-intensive industries but remains inadequately addressed for labor-intensive industries. In this study, a framework is proposed for sorting the relevant manufacturing flexibility types for the relevant environmental uncertainty types as an initial step towards implementing manufacturing flexibility in labor-intensive industries. This study considered the RMG (ready-made garment) industries in Bangladesh, which are mostly labor-intensive, as a case. Different types of manufacturing flexibility and environmental uncertainty were identified through a deductive approach from the existing literature and theory. Then, final sorting was conducted through a focus group discussion using the analytical hierarchy process (AHP) and decision making trial and evaluation laboratory (DEMATEL) techniques. This study revealed that demand, competitor, supplier, and technology uncertainty were ranked sequentially from first to fourth. This study also revealed that demand and competitor uncertainty would be the first-line focus, and supplier uncertainty the second-line focus, of decision makers. Similarly, new product, volume, workforce, and modification flexibility were ranked sequentially from first to fourth, and these would be considered first-line focuses by decision makers. This study also showed that all types of environmental uncertainties had an internal effect (one type affects another type within the types of environmental uncertainty). Internal effects among the different types of manufacturing flexibility were also identified. This study contributes to the theory of manufacturing flexibility for labor-intensive industries and will help decision makers gradually implement manufacturing flexibility based on their capacity and goal.

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