Design-manufacturing integration and manufacturing complexity

Abstract

Purpose The purpose of this paper is to propose that the effectiveness of organizational design-manufacturing integration (ODMI) practices is contingent upon the degree of complexity of the manufacturing environment. The paper submits that the level of use of ODMI ought to match the level of complexity of the manufacturing environment. The paper puts forward the hypothesis that when a misfit occurs between ODMI and complexity (high use of ODMI practices in low complexity environments or low use of ODMI practices in high complexity environments) manufacturing operational performance declines. Design/methodology/approach The paper tests the hypothesis based on a survey database of 725 manufacturers from 21 countries. The measurement model was assessed with confirmatory factor analysis and the hypothesis was tested with linear regression. Findings A misfit between the level of ODMI use (job rotation and co-location) and manufacturing complexity (product and process complexity) has a negative effect on manufacturing operational performance dimensions of quality, delivery and flexibility. Post hoc analyses also suggest that firms that operate in different environments in what concerns the rate of change in process technologies suffer differentiated negative impacts of ODMI-complexity misfit. Research limitations/implications Future studies could extend this research to other dimensions of design-manufacturing integration, such as technological practices. Practical implications Manufacturers with high levels of complexity should invest strongly in ODMI practices. However, manufacturers with low levels of complexity should invest in these practices with caution since the expected payoffs may not outweigh the effort. Originality/value The study assesses fit as a simultaneous set of contingency factors, applying profile-deviation analysis to ODMI and operational performance relationships. By focusing on plant-level manufacturing complexity, this study complements existing studies of product development complexity which tend to focus on project-level complexity.