Manufacturing strategy and e‐business: an exploratory study

Abstract

Whilst much of the e‐business evolution has been referred to as an additional and complementary marketing channel, there has been little concern about the impact on manufacturing. However, since a manufacturing strategy should be closely linked to the marketing strategy, developments in marketing are likely to impact manufacturing. In this paper, we explore the ways in which e‐business is impacting the manufacturing strategy in manufacturing firms. We study seven Swedish manufacturing firms and investigate the relationship between e‐business and manufacturing strategy. The findings indicate that e‐business mainly affects two decision categories – vertical integration, and manufacturing planning and control systems – through new ways to communicate and exchange information between buyers and sellers at both business ends. Improvements in these decision categories lead to potential gains in delivery speed and reliability, but only for make‐to‐order companies, whereas the impact on quality, price and flexibility is more or less negligible. Make‐to‐stock firms report only limited impact on manufacturing.