Manufacturing strategy in multi-plant networks – a multi-case study on decision-making authority, network capabilities and competitive advantages

ABSTRACT

Modern manufacturing firms are globalised organisations that regularly operate multi-plant networks. Network configuration elements, e.g. plant roles or the multi-plant strategy, were intensively examined by scholars. Another complex and less studied task is coordinating the manufacturing strategy of the plants in the network. Efficient distribution of competences and decision-making authorities is crucial for decision-makers. An appropriate level of autonomy has to be found that determines which decisions are centralised and which are delegated to the decentralised plants. The interaction of network coordination and configuration with network capabilities and competitive advantages is examined in this article using an empirical multi-case study. We focus on how manufacturing strategy decisions are made in the intra-firm network and how the distribution of decision-making authorities affects the network capabilities. Results indicate that both network coordination and configuration affect network capabilities, which in turn affect competitive advantages. Network thriftiness reduces costs, while mobility and flexibility promote delivery capabilities and learning effects improve quality and costs. A conceptual research model is developed as a starting point for future studies in this emerging research area. Besides, managers are provided with guidance on the efficient design of distributed manufacturing networks to achieve the desired competitive advantages.

KEYWORDS:

• Manufacturing strategy
• distributed manufacturing
• case study research
• international manufacturing network
• multi-plant network
• network capabilities

Acknowledgement

The authors would like to express their sincere thanks to the five anonymous reviewers who have contributed to the improvement of earlier versions of this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Jacob Lohmer

Jacob Lohmer is a Research Associate and Ph.D. candidate at the Chair of Business Management, esp. Logistics at the Technische Universität Dresden, Germany. He received a B.Sc. and M.Sc. in industrial engineering and management from Technische Universität Dresden. His research focuses on distributed manufacturing, manufacturing networks and digital technologies for OM and SCM. He has published his work in several international renowned journals, including International Journal of Production Research, International Journal of Production Economics and Computers & Industrial Engineering.

Franz Kossmann

Franz Kossmann is a Consultant at Comarch AG in Germany. He received his Diploma (equivalent to a M.Sc.) in Industrial Engineering and Management from Technische Universität Dresden in 2020. His current research interests include international manufacturing networks and operations strategy.

Rainer Lasch

Rainer Lasch is a Full Professor at the Chair of Business Management, esp. Logistics at the Technische Universität Dresden. He is also a visiting professor at the Universitá degli studi di Trento, Italy. He is the author of numerous textbooks as well as internationally recognised publications for several international journals, including International Journal of Production Economics, International Journal of Production Research and European Journal of Operational Research. In addition, Rainer Lasch is a high-profile research partner of the BMBF and industry, particularly in benchmarking in logistics, supply chain management, risk management, spare parts logistics, humanitarian logistics, and quantitative planning procedures in logistics.