The impact of new manufacturing requirements on production line productivity and quality at a focused factory

Abstract

This research studies how changes in manufacturing requirements affect production line performance in a focused factory. Specifically, we examine whether production line labor productivity and conformance quality decline as the range of models produced and the heterogeneity of production volume increase in a factory designed for high volume production of a narrow range of models. We use the organizational nature of production lines to argue that the performance of focused production lines will decline when the lines adopt new manufacturing tasks that are outside the scope of the absorptive capacity developed through the execution of their prior focused manufacturing task, but not otherwise. The study examines four years of data from 16 production lines of a compressor manufacturing factory of the Copeland Corporation. Our statistical analysis identifies limits to change, suggests paths to successfully changing the manufacturing requirements of a focused factory, and places the operations strategy discussion of focused factories in a dynamic environment.