Dynamic Roles and Locations of Manufacturing: Imperatives of Alignment and Coordination with Innovation

Purpose – The principal objective of this paper is to relate functional nodes of production and innovation in global operations networks. The authors aim to capture the implications of changing strategic roles and locations of manufacturing for innovation capabilities.
Design/methodology/approach – The authors draw on the operations networks literature and use mixed methods of enquiry, including case studies, workshops and survey techniques. Part of the empirical base of the study is a series of workshops and an examination of 14 Danish companies that have experienced radical changes in their operations configurations. To provide a more complete view of these developments, the authors complement the qualitative methodology with a survey of an overall sample of 675 Danish and 410 Swedish companies.
Findings – On the basis of the findings from the survey, the series of workshops and case studies of Danish companies presented in this paper, the authors find that although the potential benefits of global dispersion of manufacturing are vast, the realisation of these potentials depends on how successful companies are with linking the new strategic roles and locations of manufacturing with innovation at their home base. The paper identifies and discusses groups of capabilities important to this link.
Practical implications – Three propositions are developed to advance the understanding of the role of cross-functional coordination and alignment, as well as their significance in the strategic initiatives of global dispersion of operations. The findings assist global companies in organising cross-functional coordination and interrelated functional nodes of production and innovation in global operations networks.
Originality/value – Not only routine transactional tasks but also more knowledge-intensive proprietary tasks cross both national and organisational borders. The challenge of coordination in these emerging configurations is imperative which has not been adequately addressed so far. By using mixed methods of inquiry, this paper provides a more complete view of the phenomenon and presents the main dilemmas underlying it.