A system dynamics approach to studying manufacturing strategy

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Musaphir, Hamza
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Many firms take actions which affect their competitive position without fully understanding the complexities of relationships and linkages among decision areas of manufacturing strategy. A lack of knowledge or explanation of relationships among widely disparate and dispersed elements of production in a firm has been cited as one of the key reasons why manufacturing has slipped to being a millstone rather than a source of competitive advantage. The standard techniques utilized in Operations Research today are almost incomprehensible to the typical manufacturing manager. Manufacturing managers need a process to help them effectively integrate their actions in manufacturing meaning that they must be able to understand the relationships among the decision areas of manufacturing strategy from a holistic approach rather than a piecemeal or micro-functional point of view. The research in this dissertation uses Systems Dynamics to conceptualize a systems dynamic model which can be simulated for the purposes of better understanding what constitutes manufacturing strategy, and why certain decision choices mesh more successfully and lead to a superior competitive position. In addition, this work identifies maintenance as a key decision area that has not been previously linked to manufacturing strategy. The simulations conducted for this dissertation indicated that manufacturing as a system can behave in unexpected ways. In addition to confirming that maintenance indeed does influence manufac uring strategy. This shows that it is not enough to assume one knows how the system will respond; it is necessary to think carefully about how the strategies one sets influence other parts of the system. The author hopes that the concept of a systematic holistic approach to studying manufacturing strategy will help managers in industry to understand the complex nature of operations management and that operations management can become a competitive weapon if decision areas are effectively linked. In addition, the results of adopting a systematic holistic approach validates the fact that if one does not believe that a system can behave in unexpected ways, one will not be on guard and think carefully about the ramifications of one's strategic and policy decisions. This was one of the main reasons for this dissertation.