From mass production to flexible specialization: A case study of microeconomic change in a semi-industrialized economy

Abstract

A new paradigm of plant organization is diffusing in many industrialized countries, reflecting the transition from mass production to flexible production. It involves the move to flexible and small-batch production and is achieved by a new pattern of factory layout (cellular production), just-in- time inventory control and many other organizational techniques originating in Japan. These organizational changes are particularly attractive to less-developed countries (LDCs), since they are neither capital- nor foreign exchange-intensive. There is a question, however, of whether they can be implemented in LDC environments. This paper describes in detail the process and consequence of adopting these organizational techniques in a semi-industrialized economy, calculating the net financial benefits of adoption and documenting the obstacles faced in successful diffusion.