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Firms' integrating efforts to mitigate the tradeoff between controllability and flexibility

Authors
Kim, BowonPark, Chulsoon
Issue Date
Feb-2013
Publisher
TAYLOR & FRANCIS LTD
Keywords
manufacturing capability; controllability; flexibility; integrating capability; tradeoffs between capabilities; firm performance
Citation
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH, v.51, no.4, pp 1258 - 1278
Pages
21
Journal Title
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
Volume
51
Number
4
Start Page
1258
End Page
1278
URI
https://scholarworks.sookmyung.ac.kr/handle/2020.sw.sookmyung/11340
DOI
10.1080/00207543.2012.698319
ISSN
0020-7543
1366-588X
Abstract
We consider three manufacturing capabilities: controllability, flexibility, and integrating capability. Controllability is a firm's ability to control its process to enhance efficiency and accuracy and to better meet specifications. Flexibility is a firm's ability to cope with uncertainty and variation, both internal and external. Integrating capability is a firm's ability to integrate and coordinate diverse functions and parts of its supply chain, embodied in overall operations effectiveness and new product innovation. We put forth two hypotheses. First, there is an inherent tradeoff between controllability and flexibility. Second, a firm's integrating effort across its supply chain enables it to overcome such a tradeoff, making it possible to improve both controllability and flexibility simultaneously. Using data from 193 manufacturing companies, we test our hypotheses. It turns out that the relationship between controllability and flexibility is convex-shaped, indicating there are two distinct regions: one in which the relationship is negative and the other, positive. Further, the firms in the positive relationship region make significantly more effort to integrate, that is to say coordinate and communicate, across their supply chains, implying that as the firm strives to integrate its supply chain functions, it can mitigate the tradeoff between controllability and flexibility to a considerable extent.
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