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In this paper, we present a new perspective on flexibility in manufacturing and service operations by exploring a type of operational flexibility that we term "structural flexibility (SF)." We focus on strategic-level issues of how flexibility can be created by using multipurpose resources such as cross-trained labor, flexible machines, or flexible factories. The proposed structural flexibility method uses the structure of the capability pattern to generate indices that quantify the ability of a system to respond to variability in its environment. Simulations of serial and parallel queueing networks provide evidence that this index is useful in predicting the performance rank of alternative designs for implementing multifunctionality in the face of variability. The proposed methodology supports managerial insight into structural design of manufacturing and service systems at the strategic level.
Key words : flexibility; cross-training; max flow algorithm; serial and parallel production systems
History: Accepted by William S. Lovejoy, operations and supply chain management; received August 30, 2002. This paper was with the authors 14 months for 3 revisions.
1. Introduction
Flexibility is a very general concept that is often viewed as a firm's ability to match production to market demand in the face of uncertainty and variability. The notion of flexibility is also closely linked to the firm's ability to provide niche and customized products to the consumer. Work force management, supply chain management, and flexible manufacturing are undergoing dramatic development to achieve flexibility using a variety of mechanisms, such as crosstrained labor, enhanced use of information systems, improved logistics, small batch sizes, delayed product differentiation, and multipurpose machines/tools.
A growing literature has focused on developing a deeper understanding of how cross-training and/or flexible equipment can be appropriately used to improve productivity and provide greater performance in servicing a variety of types of demand (see Hopp and Van Oyen 2004 for strategic and tactical frameworks with a literature survey). Behind much of this literature is an intuitive notion of flexibility. It does not, however, appear to us that there currently exists a mathematical definition of flexibility that is broadly useful. Sethi and Sethi (1990) express the challenge as follows: "The literature makes one thing abundantly clear: flexibility is a complex, multidimensional, and hard-to-capture concept" (p. 289).
Variability in demand (and/or capacity) deteriorates system performance....