Linking enterprise flexibility to strategic options: A control problem approach

Autor: Franco F. Yanine

Estrategia y dirección estratégica | Producción, procesos y operaciones

28-05-2010

In order to operate effectively manufacturing enterprises must be able to coordinate and utilize their limited physical and managerial resources effectively in an effort to deal with uncertainty and complexity, following certain strategic enterprise guidelines. Manufacturing enterprises must be able to acknowledge the tensions between flexibility and stability forces operating within them, and then manage them in a way that best reflects their strategic options.

This paper looks at manufacturing enterprises as complex, dynamic systems which ought to operate under certain strategic guidelines and constraints in order to be both effective and efficient, and at the same time, ought to be flexible enough to be able to deal effectively with perturbations, generated both within and outside the system, which affect the enterprise system differently, in order to guarantee, on the one hand, effectiveness and stability of operations, and the achievement of enterprise strategic objectives on the other.

In this control problem approach to enterprise flexibility we go to a higher level and examine how both properties, flexibility and stability, depend on what we call the metacontrollability of the enterprise system, that is the control of the very enterprise control system, the role of management in the metacontrollability of the enterprise, and how these control actions, which determine when, where and how much flexibility is applied, are linked to specific strategic needs and objectives that reflect the strategic options of the enterprise, which in turn must be part of the enterprise strategic framework at the operational, business, and corporate level respectively.

1. INTRODUCTION

In order to operate effectively, manufacturing enterprises must be able to coordinate and utilize their limited physical and managerial resources to deal with uncertainty and complexity, following certain strategic enterprise guidelines. Manufacturing enterprises must be able to acknowledge the tensions between flexibility and stability forces operating within them, and then manage them in a way that best reflects their strategic options.

This paper looks at manufacturing enterprises as complex; dynamic systems which need to operate under certain strategic guidelines and constraints and, at the same time, ought to be flexible enough to deal effectively with perturbations, generated both within and outside the system, which affect the system differently. In order to guarantee on the one hand effectiveness and stability of operations and, on the other hand, the achievement of the enterprise strategic objectives, we can think of the manufacturing enterprise as a dynamic system in constant need of control, coping with both the need to be flexible and malleable in order to change and adjust itself in different orders of magnitude and frequency upon requirements being impressed upon it, and at the same time, the need to be robust and steadfast in order to maintain order and regularity of operations, in order for the system to hold itself together even when it is called upon to act in such a way as to push itself to the limits.

This control system and its hierarchy, which we will explain later, are in turn responsible for controlling the behavior and performance of the enterprise system at every level, accounting for and managing the stability and flexibility requirements that arouse within the system continuously as operations go on in the every day life of the enterprise. In our control system approach to enterprise flexibility, we view flexibility and stability as desired properties of the manufacturing enterprise and both are equally important and necessary for the enterprise system to be viable.

We will define now what we mean by Flexibility and Stability, as desired properties or qualities of the enterprise system.

Flexibility: it is first of all the capacity of an enterprise to respond to change. It is also the property of an enterprise system to be malleable and capable of adjustment in order to change and accommodate its operations to scenarios or environments other than those for which it was specifically designed. The need for flexibility arises when the enterprise system is faced with requirements which are exerted upon it which demand actions that go beyond the scope of its regular operations environment. The flexibility of a system may also be viewed as the capacity of an enterprise system to be managed or controlled successfully in order to meet its objectives, being capable of withstanding stress and strain without causing significant cost or any other type of impair or prejudice to the enterprise.

Stability: it is, on the other hand, the quality or attribute of an enterprise system of being firm and steadfast in maintaining regularity of operations even upon extreme conditions. It may also be viewed as the quality or property of an enterprise to preserve its equilibrium when undisturbed (or only slightly disturbed) but able to pass to a more stable equilibrium when sufficiently disturbed. In sum we may say that stability is the quality or property of an enterprise system to maintain its course in spite of forces acting upon it. This of course means that the enterprise is capable of maintaining its course and regularity even after incurring in major adjustments to withstand change.

In this control problem approach to enterprise flexibility we go to a higher level and examine how both properties, flexibility and stability, depend on what we call the metacontrollability of the enterprise system, the role of management in the metacontrollability of the enterprise, and how these control actions, which determine when, where and how much flexibility is needed at any one time, are linked to specific strategic needs and objectives, which are part of the enterprise strategic framework at the operational, business, and corporate levels respectively.

It is management the one which is called upon to establish the right balance between stability and flexibility in the enterprise, understanding that both are desired properties or qualities of the system, which must be engineered in the enterprise system itself, not added onto and which do not oppose one another. Likewise, stability is just as important as flexibility, and stability may not be taken for granted as it is false pretense to assume that enterprise system’s stability is the normal state of affairs, which occurs in the absence of flexibility, just as it is also false to assume that in the absence of change there will automatically be stability in the system.

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Franco F. Yanine - francoyaninearrobayahoo.com

PhD student of Engineering Sciences-Mention in Automation, University of Santiago, USACH.

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