Trade off between delivery and flexibility, Operation Management

Trade off Between Delivery and Flexibility

Pagell et al (2000) argue that the trade-off concept is based on Skinner's quandary that a manufacturing plant could not be configured to perform equally well on all dimensions such as cost, delivery and quality simultaneously (Skinner, 1969, 1974). Skinner coined the term 'focused factory' meaning that the market, the competitive criteria and the technology should be aligned, consistent and focused. Since Skinner's time, the pressure for mass customisation has meant that there is considerable pressure on companies to improve along multiple dimensions simultaneously. While this may make business sense, trade-offs may still exist. This is illustrated in the two figures below. In figure (a), the traditional approach of movement along the performance curve is seen as the only degree of freedom and a company moves its position up and down the performance curve between, for example, A1 and A2. In figure (b), showing the current approach, the performance curve itself is moved. (That is, for example, the points A1, B1, C1 may shift to the positions A2, B2, C2, representing the movement of the performance of a company.)

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