Impact of the alignment between the strategic and operational levels of a manufacturing enterprise

Abstract

In today's economic environment, manufacturing organisations compete against each other as part of supply chains (SC). As both the SC strategic level and production floor operational level are interdependent, a misalignment between them has a deep impact on the performance of the manufacturing organisation. For this reason, in this paper we develop an analytical expression of the impact such misalignment has on the manufacturing organisation performance, specifically, its demand fulfillment ability. The usefulness of the analytical expression is illustrated via the development, for the case of a local furniture company, of a system dynamics (SD) simulation model. The SD simulation model is tested under different operational conditions, so the case study company can derive conclusions regarding actions to improve its demand fulfillment ability.