Guest editorial

Citation

Dekkers, R. (2006), "Guest editorial", Journal of Manufacturing Technology Management, Vol. 17 No. 8. https://doi.org/10.1108/jmtm.2006.06817haa.001

Guest editorial

About the Guest EditorRob Dekkers joined the University of Paisley in 2006, after being a Senior Lecturer in Industrial Organisation and Management at Delft University of Technology since 1992; before that, he worked in industry as internal consultant, production manager and senior project manager. The research interests include: innovation and technology management, changes and transitions in companies, manufacturing strategy, outsourcing models, manufacturing networks, systems theories, complex systems and evolutionary models. On these topics, he has published about 60 publications; he acts as reviewer for journals like the International Journal of Operations & Production Management, Production Planning & Control. He serves on several review panels and committees, e.g. the Review Panel for EPSRC's Innovative Manufacturing Programme, the Steering Committee of the International Forum on Technology Management and the Board of Stichting Post-Academisch Technisch Onderwijs. E-mail: rob.dekkers@paisley.ac.uk

Introduction

Customers in geographically dispersed, emerging, and established global markets nowadays demand higher quality products in a greater variety and at lower cost in a shorter time. As a result, firms have been forced to reorganize their activities and realign their global strategies in order to provide the speed and flexibility necessary to respond to windows of market opportunity (Dekkers and van Luttervelt, 2006, pp. 4-6). Consequently, organizations have moved from centralized, vertically integrated, single-site manufacturing facilities to geographically dispersed networks of resources, a trend already noted by Miles and Snow (1984). Additionally, in order to acquire technological know-how and assets quickly, or to acquire a local presence in new and distant markets, strategic partners are increasingly part of the network structure (Hemphill and Vonortas, 2003). The changes require adaptations by companies to fit the characteristics of industrial networks in dynamic environments.

The contemporary industrial networked structures do not only root in the monolithic company; they also come about through the intense cooperation and collaboration between, often smaller, firms. Bennett and Dekkers (2005) have identified this as one of the main drivers for the rise of industrial networks. The so-called “Third Italy” can be seen as an exponent of this type of collaboration between these firms at a regional level (Biggiero, 1999; Robertson and Langlois, 1995, p. 549). Other trends, identified by Bennett and Dekkers, include:

1. 1.

   that network configurations require a control structure and organizational structure that fits the actual demand and that companies have started to move away from the control paradigm of the monolithic company towards managing the emergent properties of networks;

2. 2.

   with the move towards OEMs as network players there has been a greater tendency for manufacturing to become a commodity, which has accelerated under the regime of brand owners; and

3. 3.

   the added value of industrial networks includes more product and process innovations and the extension of capabilities with manufacturing services.

Dispersed manufacturing networks

This brings us to the topic of the special issue: dispersed manufacturing networks as organizational manifestation for collaboration and coordination across loosely connected agents. Industrial networks provide an answer to the current challenges of innovative potential, responsiveness and flexibility through their capability for absorbing change and capturing market opportunities. The emerging possibilities of information technology and data-communication, the globalization of markets, and the ongoing specialization of firms have paved the way. All these simultaneous developments foster the specific characteristics of (international) networks of companies: collaboration, decentralization, and inter-organizational integration (O'Neill and Sackett, 1994, p. 42).

In this perspective, dispersed manufacturing networks – Lee and Lau (1999) have attributed this label to agile manufacturing networks of loosely connected entities – comprise the total primary process, product development and supply chain, in an international setting, relying on applications of information technology and data-communication to exchange information and to coordinate actions. The quest for agility in dispersed manufacturing networks indicates the capability to operate virtually at the borderline between outsourcing (as make-or-buy) and alliances (as a continuous form of cooperation between partners). This has profound implications for the resource allocation processes. First, every opportunity requires tuning of available resources to match the specific demands. Secondly, optimization of the allocation of resources becomes an issue that exceeds a singular opportunity. Thirdly, agents act independently, and therefore, the tuning of resources becomes a two-way communication issue for the network. This means without doubt that decision-making for resource allocation becomes anything but a one-time decision or that allocation decisions get fixed through establishing alliances. The continuous motion within industrial networks makes that decisions hold only for temporary states and situations, accounting for contingencies, and the assessment of each opportunity.

However, the bulk of available works is devoted to the contractual aspects and the social dynamics of inter-organizational relationships (Nassimbeni, 1998, p. 539); the dynamic forms of communication and coordination have been neglected, and therefore, these do require more attention from researchers in the domain of industrial networks. Additionally, research can yield these approaches in two ways to deal with the specific characteristics of industrial networks:

1. 1.

   converting existing theories for individual firms to the domain of networks; and

2. 2.

   developing new theories from new perspectives.

Converting existing theories makes especially sense for guided networks (the domain of supply chain management, mostly). The true advantages of networked firms, the decentralization within the network and the specialization of individual agents, will only be partially addressed in guided networks. The more deterministic methodologies that might fit the domain of individual organizations in guided networks need to be expanded to the nonlinear characteristics of networks, in which interaction amongst agents dominates. Yet, there is a strong need for adequate, integrative approaches to manage the collaboration, decentralization, and the inter-organizational integration as a consequence of these loosely-connected entities, often operating in an international context. Therefore, this issue should yield methodologies, methods, and tools for industrial networks that are more appropriate (query raised in Dekkers and van Luttervelt, 2006, p. 4), based on the main questions:

• •

  Which forms of industrial networks do emerge and do meet the industrial challenges of this century? Which performance criteria do they meet?

• •

  Which models that will lead to methods and tools do apply for networks? How about the coordination and inter-organizational integration in networks of loosely connected agents?

• •

  How should companies manage industrial networks given their instability and the dynamics of the environment? Which routes does management science have to explore?

Contributions to the special issue

The first contribution to the special issue by Hamid Noori and W.B. Lee offers two perspectives. The first one approaching dispersed manufacturing networks as a archetype for how smaller firms may compete at a global scale. The second one comprises of viewing dispersed manufacturing systems as complex adaptive systems, similar to Biggiero (1999) does for regional networks in Italy; Dekkers (n.d.) offers an outlook how to combine this view with the game-theoretical approaches and network theories. During the years to come, we might expect that further elaboration of the complex systems view in its widest sense will add to our understanding of the behaviour of agents in industrial networks and to the improvement of coordination mechanisms between loosely connected entities.

The next three contributions elaborate on the coordination and control processes in industrial networks. Harsh Karandikar and Srinivas Nidamarthi offer an unique model for managing the transition of global engineering networks, moving away from engineering management based on the monolithic company. Developed from a practitioner's perspective, this model has supported ABB to make the transitions to deploying global resources and managing the engineering processes. Petri Helo et al. describe an open source solution for managing the logistics between firms in an industrial network with loosely connected entities. Their approach supports the sustainability of dispersed manufacturing networks, through the possibility to connect firms without (severe) interventions in internal systems and processes. The next step would be to connect that to engineering processes; driven by a study into sequential and simultaneous approaches to engineering Riedel and Pawar (1998) highlight that the concepts of design and manufacturing are not linked in literature and that the interaction of product design and manufacturing strategy is under-researched. Hossein Sharifi et al. present an integrated approach to facilitate dynamic and simultaneous design and development of products and supply chain contributing to the agility of supply chain. This should enhance existing practices and approaches to product development process as well as supply chain development and management. Altogether, these contributions offer solutions to improve and to facilitate improved coordination and control in industrial networks with interdependent agents.

The final contributions touch on the international aspects of industrial networks. Joachim Kuhn expands on the evolution of the automotive industry when creating dispersed manufacturing networks, to reach local markets and to battle competitive pressures by reducing cost. The proposal by Mahendrawathi Er and Bart MacCarthy in the last contribution to this issue shows these effects by the simulation model they have developed. They confirm that product variety has a detrimental impact on performance, as they conclude: in dispersing their manufacturing activities, companies should consider the availability of capable local suppliers, not merely basing the decision on cost or market drivers. These contributions align with the need for improvement decision-making at managerial level while proving that operational issues will determine success of managing dispersed manufacturing or for smaller firms the participation in loosely connected networks.

Concluding remark

Which contribution did this special issue make and what more has to be done? It has given new perspectives by looking at dispersed manufacturing systems from the point of view offered by complex systems theory. Furthermore, some contributions have elaborated on the issues for coordination and planning and offered new solutions, for logistics issues and for developing cooperation in engineering networks; these methods and tool will offer pathways to develop integrative approaches. In addition, the impact of globalization has been discussed for both managerial decision-making and operational performance of supply chains. All contributions show the need for continuous decision making and that networks of loosely connected agents require different approaches. Further research is necessary to develop the new perspectives of complex systems in methods and tools for industrial companies, to refine the methods and tools for coordination and control, e.g. by connecting engineering and manufacturing processes, and by providing more adequate tools for managerial decision making that also account for operational issues that undermine strategic decisions. May this special issue be a step in the research into industrial networks.

Rob DekkersUniversity of Paisley, Paisley, UK