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Researchers agree on the importance of manufacturing flexibility but are somewhat divided on the dimensions of this important construct. This paper seeks to find a middle-ground by working toward a generally acceptable taxonomy of manufacturing flexibility dimensions. The authors build on extant literature and propose a theoretically grounded operationalization of the manufacturing flexibility construct. Operational measures of manufacturing flexibility dimensions are identified and tested on a sample of 240 manufacturing firms. Results indicate good support for the theorized taxonomy.

Academicians and practitioners agree that the pressures of global competition will continue to grow in the twenty-first century. Barring some differences in terminology, the consensus is that the major competitive arenas will be cost, quality, and responsiveness, where responsiveness refers to flexibility and speed (Olhager, 1993). Most managers agree that cost and quality will continue to be competitive arenas for a firm. However, they also note that these are not enough to compete effectively in the marketplace. Flexibility to respond appropriately to changes in the competitive environment will be essential if a firm is to succeed in this increasingly global marketplace. It is therefore incumbent on managers and researchers to strive for a better understanding of the flexibility construct. The manufacturing flexibility construct is not as well understood as are the cost or quality constructs. We know that the cost of a product is a function of direct labor, direct materials, and allocated overhead. Consequently, most firms have a reasonably accurate understanding of the cost of producing their products. The quality of a product is specifically defined when the firm identifies the characteristics that define product quality in the mind of the customer. Firms measure those characteristics and compare the data with predetermined standards to assess the degree of conformance between the quality characteristics and the design specifications. Thus, one can conceivably determine whether a product has met a predetermined standard of quality. Flexibility, on the other hand, is not determined quite so easily. Most researchers in the area of manufacturing flexibility agree on a workable definition of manufacturing flexibility. However, we notice significant variation in perspectives when we try to break down manufacturing flexibility into its dimensions, elements, and measures. 1.1. Objectives of the study Gerwin notes that, “operationalizing flexibility is … the single most important research priority” (1993, p. 405) for researchers in the area of manufacturing flexibility. However, only a few studies have operationalized this constructs, and even fewer studies have attempted to validate/refine such operationalizations based on empirical evidence. The objective of this paper is to develop a theoretically-grounded and empirically-tested operationalization of the manufacturing flexibility construct. The development builds on extant literature and results in a set of dimensions and elements of the manufacturing flexibility construct. We use data collected from 264 manufacturing firms to assess the validity of our operationalization.

Gerwin (1993) identified the task of operationalizing the manufacturing flexibility construct as the single most important priority for researchers in this area. We have endeavored to answer Gerwin's call and to extend it a step further by empirically testing the operationalized dimensions of the manufacturing flexibility construct. The literature on manufacturing flexibility was reviewed and key theoretical developments were isolated. We then developed a parsimonious conceptualization and operationalization of manufacturing flexibility dimensions that is grounded in the manufacturing flexibility literature. To assess the appropriateness of our taxonomy, we operationalized and tested the taxonomy using empirical data from a sample set of 240 manufacturing firms. The value in our development lies in its ability to provide direction toward a generalizable taxonomy of manufacturing flexibility dimensions. The results of the empirical analysis of the data set suggest that the operationalization is fairly robust, with dimensions and elements falling out as theoretically predicted in the entire sample as well as in two sub-samples of firms. These results are especially encouraging when one notes that the sub-samples represent firms that are known to be configurationally different. The make-to-stock firms use manufacturing processes that tend to be configured as “line” or “continuous flow” while the make-to-order firms have manufacturing processes that tend to be “project-,” “job-shop-,” or “batch”-oriented. Despite their configurational differences, both groups of firms were successfully characterized using our operationalization of the manufacturing flexibility construct. This lends support to the generalizability of our operationalization across these types of manufacturing firms. We believe that our taxonomy is useful in several respects. The parsimonious nature of the instrument makes it easy to implement. In addition, several researchers have noted that manufacturing flexibility may well be a critical competitive arena in the twenty-first century. Hayes and Upton (1998) argue that companies that use the operations function as an element in their competitive battles with other companies in their industry have discovered that such capabilities cannot be developed quickly. The exact organizational configuration that creates such flexibility has yet to be exactly determined. Greis and Kasarda (1997) suggest that a “collective enterprise” configuration might provide the broader range of resources, skills and technologies to adapt to market opportunities and provide the flexibility needed to compete effectively. Our conceptualization of manufacturing flexibility may be useful to researchers and practitioners as they strive to take advantage of a better understanding of manufacturing flexibility. Configurational research on manufacturing flexibility has not been profuse. We believe that the existence of our integrative taxonomy could stimulate the search for robust manufacturing flexibility archetypes. Several important research questions exist in this areas. For example, is it possible to isolate a set of manufacturing flexibility archetypes that are generalizable across most manufacturing firms? If not, are there sub-sets of firms within from which such typologies can be developed. We have noted that our taxonomy of manufacturing flexibility dimensions is appropriate for both make-to-order and make-to-stock firms. But, will the flexibility archetypes also follow the same pattern? This is one of several “content” related questions that can be more readily addressed with an existing taxonomy of manufacturing flexibility dimensions. The availability of a tested taxonomy of manufacturing dimensions should be good news for researchers who investigate manufacturing flexibility “process” issues. For example, we do not fully understand the process of configuring manufacturing flexibility. While researchers have implicitly postulated a direct linkage between environmental uncertainty and manufacturing flexibility, new evidence from the field of organizational theory suggests that such a portrayal may be an oversimplification. Our taxonomy allows researchers to evaluate these and other process relationships at the dimensional level. 6.1. Study limitations We would like to conclude by noting that this study is exploratory in nature. We do not present this research as the definitive work on manufacturing flexibility dimensions. Rather, we hope it moves us a few steps closer to a comprehensive, yet parsimonious model. When this is done, the resulting model might or might not have elements common to those that we have identified in this paper. For example, our review of the literature uncovered a variety of frameworks, each of which included a different set of manufacturing flexibility dimensions. Which one is the best? All of them can be defended on a theoretical basis. We have tried to simplify our model by identifying four and only four dimensions: volume, variety, materials handling, and process. We acknowledge that this could be seen by some as a limitation of our research. We believe, however, that it provides an effective springboard for further research in the area. We recognize that further research is needed. Subsequent efforts might result in a more comprehensive set of dimensions that are generalizable across a variety of industries. It is every researcher's prerogative to question the appropriateness of any model specification. We hope that our integration will stimulate such efforts. For example, our data supports the appropriateness of isolating materials handling flexibility as a unique dimension. However, other researchers may want to investigate the alternate hypothesis that materials handling flexibility may be subsumed under the broad umbrella of process flexibility. If such is indeed the case, it would lead to an increased level of parsimony in the operationalization of the flexibility construct. Conversely, researchers may want to explore the alternate hypothesis that the operationalization may be under-specified, and that there are, indeed, other significant dimensions that need to be included in the operationalization. We have used an instrument that was constructed recently and could benefit from refinements. Two area may warrant further research. First, one might want to consider improvements on the single-item operationalizations of the range element of volume flexibility and the mobility item of materials flexibility. Second, the range and mobility elements of the process construct did not show exceptionally good separation. This is probably due to the quality of the items used. We suggest that researchers attempt to develop items that provided better separation between these two elements of process flexibility. Although the sample set is rather large, all the firms are from one state. We do not believe that geographical location is a significant factor in this study. However, the reader may want to consider this aspect into account when interpreting our findings. Finally, although several studies have found that information provided by the manager of the “unit-of-analysis” in the firm is acceptable for this type of research, such information does reflects the subjective judgement of the manager and should be treated with appropriate caution. The operationalization that is developed and tested in this paper is an attempt to move toward a generally acceptable taxonomy of manufacturing flexibility dimensions. Although the results of our study are encouraging, we invite other researchers to further refine our operationalization and to delve deeper into its applicability in other organizational settings.