The Role of Production Topology in Information Based Structuring of Organizations : The design of craft-based and industrialized construction firms
- Publisher: Stockholm
Organization structure | organization development | production system | production topology | engineer-to-order | manufacture-to-order | assembly-to-order | make-to-stock | customer-order-the-coupling-point | information processing | information storage | industrial construction | housing | cybernetic | management
Industrialization of construction is a business strategy to significantly improve competitiveness. However, the organization structure of the construction firms needs to support the new production system. The knowledge on why and how this business development can be accomplished is scarce, both within academia and in business practice. This research seeks to fill this knowledge gap. The purpose of organization structure and the production system have is to coordinate the firm’s processes and control the work performing resources. Information is one of the most fundamental dimensions for steering and controlling the work. The different information types are determined by the firm’s product customization strategy and the production system flexibility. Further, diverse information types are managed in different extent by the organizational steering mechanisms. Consequently, firms with dissimilar customization strategy or production flexibility should organizationally be designed differently in order to be efficient. The developed model identifies four generic production topologies: “engineer-to-order” (ETO), “manufacture-to-order” (MTO), “assembly-to-order” (ATO), and “make-standard-products” (MSP). The differences between the topologies can be related to the location of the “customer-order-decoupling-point” (CODP) in the product realization process; and to what extent the upstream and downstream processes continuously use stored information or process information to accomplish the work of each product order. The model predicts which organization structure mechanisms that should be used for which processes for each production topology. It is the specific configuration of the mechanisms that gives each production topology their organizational capability. The model has been validated by case studies in four organizations, each representing one of the four generic production topologies. Three cases considered housing and one studied truck manufacturing. It has been shown that the conventional housing firms have an ETO-production topology, while industrialized housing firms belonging to one of the others, i.e. MTO, ATO or MSP. The reason is that ETO-firms rely on crafts-based production to manage the work, while the other topologies base their steering mechanisms on industrial principles. These two types of production are fundamentally different, which also explain the need for different organization structures. The research complements previous knowledge and significantly increases the ability to predict, analyze and explain an organization’s design and behavior. The model can be used in practice to guide business development work and performance improvement programs.
<p>Research funder: SBUF (The development fund of the Swedish construction industry). QC 20131113</p>