Trade-offs among the elements of flexibility: a comparison from the automotive industry

Flexibility has long been recognized as a manufacturing capability that has the potential to impact the competitive position and the business performance of an organization (1]: Cox Jr, T. Toward the measurement of manufacturing flexibility. Production and Inventory Management Journal 1989; First Quarter:68–72, 2]: De Meyer A, Nakane J, Miller JG, Ferdows K. Flexibility: the next competitive battle. Strategic Management Journal 1989;10:135–144). This recognition, however, has not led to a unanimous approach to flexibility. For example, Japanese manufacturers emphasize flexibility more than North American or European manufacturers ( 2]: De Meyer A, Nakane J, Miller JG, Ferdows K. Flexibility: the next competitive battle. Strategic Management Journal 1989;10:135–144). While this finding provides insight into the strategic choices made by these organizations in these countries, it does not provide an in-depth comparison of specific aspects of flexibility that are leveraged and emphasized differently. Such a comparison is necessary, however, if flexibility is to be more fully understood.This paper takes a step in that direction by first breaking down the concept of flexibility into its constituent elements and dimensions. Then we introduce the notion of looking at flexibility as a capability that must be planned for and built by a firm over a period of time along these constituent elements and dimensions. Questions are subsequently raised regarding whether trade-offs occur among different elements for a given flexibility dimension. We use industry wide as well as firm-specific qualitative data from the automotive industry to answer these questions, and show that several key aspects of manufacturing flexibility have been acquired and leveraged differently by American and Japanese producers. While linkages to business performance are not directly explored, our analysis reveals that even within the same industry, firms from different countries do indeed follow different strategies to developing their flexibility capability. Implications of these results for managerial practice, along with avenues for further research in this area, are also presented.