Evolution of a worldwide production network

Abstract

Purpose

The aim of this paper is the design of a strategic‐operational decision support to justify a specific network configuration. Based on cost/earnings equations regarding quality, time and cost restrictions, the equations on the operational level get linked to the business strategy of globalisation.

Design/methodology/approach

The methodology is based on literature and empirical analysis reflecting internal and external benchmarking with other European‐based car manufacturers. Thus, it combines theoretical aspects with practical evidence.

Findings

The findings include a comparison of the traditional production strategy with an agile production. As shown for this industry sector, the future concentration of production will be with third party manufacturers (3PM) or in certain cases still with the OEM.

Research limitations/implications

Further, research is embedded in comparing the agility approach with the different cultural elements like power distance or uncertainty avoidance, particularly for the automotive industry as one of the few globally favoured industry sectors. Another research field is addressed with the degree of customization: how much is really appreciated by the customer and therefore needs a flexible manufacturing approach?

Practical implications

The practical implication lies in the decision support to design a global network of manufacturing locations. Moreover, the practitioner gets an insight for the limits of agility in the automotive sector.

Originality/value

The value of this paper is given by bridging the scientific approach and practical constraints resulting in a state‐of‐the‐art decision‐making for network design in the automotive industry.

Citation

Kuhn, J. (2006), "Evolution of a worldwide production network", Journal of Manufacturing Technology Management, Vol. 17 No. 8, pp. 1099-1116. https://doi.org/10.1108/17410380610707401