The Interplay Between Flexibility and Innovation within High-Variety, Low-Volume Manufacturing

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Conference Proceeding
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Innovation and flexibility have long been understood as key elements in the competitive repertoire of todays’ manufacturing SME (Small to Medium Sized Enterprise). For SME’s that produce a high variety of customised products at low volumes (HVLV), the necessity to innovate and simultaneously maintain flexibility poses a significant organisational challenge. HVLV manufacturers are typically designed in such a manner to enable the manufacture of a wide range of highly customised products. The organisational success of the HVLV manufacturer, then, largely depends on its’ ability to reconfigure resources and adapt to new circumstances (in other words, the ability to be flexible). In fact, it is in the pursuit of flexibility that HVLV manufacturers choose to adopt the job-shop style of production and “project-based” organisational structure. There is evidence which suggests flexibility and innovation are complementary in the realm of mass-customisation. Yet, authors investigating the adoption of “project-based” organisational forms (as observed in HVLV manufacturing) warn the quest for “fast, flat and flexible” organisational designs often result in environments which hinder innovation. Indeed, the applicability of organisational practices designed to foster flexibility and its effects on the ability of a HVLV manufacturer to innovate requires further investigation – thus, a core objective of this paper. In order to achieve this objective, this paper provides two outcomes. Firstly, a comparative analysis based on a literature review is undertaken between HVLV manufacturers and those adopting lesser, more standardised, forms of customisation. This will determine key differences in both flexibility dimensions and the organisational practices designed to facilitate this flexibility. Secondly, a conceptual model is developed (based on the comparative analysis) to demonstrate the relationship between key flexibility dimensions and the likelihood of developing successful innovations in the context of HVLV manufacturing. Practical and theoretical implications of this research are provided as well as potential areas for further research.
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