The Knowledge Dimension of Manufacturing Strategy:: Mother Plant - Satellite Manufacturing

Abstract

A manufacturing strategy can be seen as set of decisions relating to a company’s structure and infrastructure. In this respect, structure concerns the vertical integration of operations, facilities and locations, capacity, and process technology, while infrastructure represents organizational and human aspects. Manufacturing strategies can be market and resource oriented, and are important for developing capabilities aiming to cope with a business environment characterized by change and increased complexity. Knowledge is important to develop capabilities and to exploit the opportunities companies face in their business environment.

In a strategic context, manufacturing is influenced by internal and external factors. The way manufacturing deals with these factors will often be reflected in paradigms. Paradigms represent principles and approaches which are not only related to practical issues but also to a more fundamental way of approaching strategic challenges. Craft manufacturing, mass manufacturing, sustainable manufacturing, and particularly lean manufacturing, are all emphasized in this thesis.

The aim of this thesis is to contribute to the manufacturing research field by focusing on strategy and the way decisions on structure and infrastructure have a knowledge dimension. The original contribution from this research is to show how decisions on structure and infrastructure are prerequisites for what kind of knowledge that should be focused and in particular challenges related to knowledge transfer

This dimension is described and hypothesized through elements of a framework focusing on knowledge transfer:

- Structure is a premise provider for what kind of knowledge should be focused on within manufacturing, especially as a consequence of process technology.

- Decisions on facilities, especially location, and vertical integration are structure decisions that define who will be key actors in knowledge creation and consequently the challenges related to knowledge transfer.

- Infrastructure decisions are to a large extent about organizing and coordinating activities in a way that enables knowledge transfer.

The knowledge dimension in manufacturing is largely a question of how to deal with the transfer challenges of tacit and explicit knowledge. Manufacturing paradigms have different challenges related to these issues. For example, craft manufacturing and to some extent lean manufacturing will base more of their improvement and development on tacit knowledge than we see in strategies based on mass manufacturing.

The empirical basis for the research is a case study in the automotive industry. Kongsberg Automotive, which has its headquarters in Kongsberg, Norway, is a leading global supplier. The business unit emphasized is Raufoss Couplings, a firsttier supplier of air brake couplings and has a strategy implying a mother plant – satellite manufacturing structure. This case exemplifies the challenges related to knowledge transfer and ways to meet these challenges, which are particularly in focus in the papers in Part II of the thesis.