Supplier involvement and manufacturing flexibility

Supplier involvement is touted as enhancing a firm's competitive edge, but its linkage with specific dimensions of manufacturing flexibility (e.g., volume flexibility) has not been established. This study investigates the relationship between supplier involvement, manufacturing flexibility, and business performance in the motherboard industry. Using data collected from 105 manufacturing firms, we first verified the effect of manufacturing flexibility on business performance. A field study was then conducted to benchmark various supplier involvement practices in the motherboard industry and to decipher the impact of supplier involvement on different dimensions of manufacturing flexibility. Our findings indicate that supplier involvement plays a major role in the development and performance of a firm's manufacturing flexibility. More importantly, we found specific associations between various supplier involvement activities and different dimensions of manufacturing flexibility. Not all supplier activities contribute equally to the development of different types of manufacturing flexibility, and manufacturing flexibility should be integrated with supply chain management. Finally, research propositions are presented and several managerial implications are discussed.