SUMMARY
Evolving from cost, quality, and delivery (time), flexibility is becoming a key dimension of firms’ competitive priorities. The need to explicitly consider flexibility makes it necessary to develop measurements for various types of manufacturing flexibility and analyse their strategic and/or economic value in improving the performance of a manufacturing system. This paper takes a first step in investigating the relationship between flexibility measurements and system performance in the flexible manufacturing systems (FMS) environment. After a brief review of the flexibility concept, we suggest several alternative measures for the assessment of machine flexibility and routeing flexibility—two of the most important flexibility types discussed in the literature. Two examples are then given to illustrate the capability and applicability of the proposed measures. We further conduct an experiment to investigate FMS performance with various levels of flexibility. The results of this study indicate that: (1) flexibility improves system performance at a decreasing rate; and (2) routeing policy as well as operating conditions could have critical effects on the magnitude of performance improvement.