Exploring flexibility and execution competencies of manufacturing firms

Abstract

Manufacturing flexibilities improve a firm’s ability to react to customer demands without incurring excessive time and cost penalties. While development of manufacturing flexibilities is desirable and indeed critical for some firms, exploiting the flexibility capabilities to achieve tangible firm-level performance outcomes through effective execution is becoming increasingly important. This paper presents a conceptual model that introduces two new constructs: flexibility competence and execution competence as distinct from manufacturing flexibility. Based on the proposed conceptual model and a multistage data envelopment analysis (MDEA) of empirical data, the roles of flexibility and execution competencies in determining performance are examined. The results indicate that some firms are more effective than others in exploiting investments in advanced manufacturing technologies and strategic sourcing initiatives to develop manufacturing flexibilities. Thus, lending credibility to the new construct referred to as flexibility competence. We also conclude that some firms are more effective than others in converting manufacturing flexibilities into tangible firm-level performance, suggesting that execution competence is an important construct that needs attention. We suggest future research in this area for comprehensively investigating these two new constructs proposed in this paper and identifying the factors that influence them.