My poster from the 2005 International System Dynamics Conference, Boston.

1. 1
An Exploratory System Dynamics Model
of Strategic Manufacturing Capabilities
by
Andreas Größler
Mannheim University, Germany

2. 2
What are strategic
manufacturing capabilities?
• Behavior modes that a plant is able to
perform …
• … in order to support and shape corporate
strategy (and the competitive position of
the firm);
• their development, nurture and abandonment
are major tasks of manufacturing strategy.
• 4 basic capabilities: (1) to produce with
high quality, (2) to deliver reliably, (3)
to produce with low cost, and (4) to remain
flexible concerning volume and product mix.

3. 3
Assumptions about the relation-
ships between capabilities
Accumulation Trade-offs

4. 4
An empirical model of
strategic capabilities
Quality
0.54**
Delivery
-0.08Cost Flexibility
Structural Equation Model based on a questionnaire
survey of 465 manufacturing plants
(International Manufacturing Strategy Survey, IMSS-3)
** significant with p<0.01

5. 5
Strategic capabilities as levels
Strategic
Capabilityincrease decrease
INITIAL VALUE
attrition/
neglect
employment
of resources
support/
inhibition
dependent on other
strategic capabilities!

6. 6
80
60
40
20
0
4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
3
3
3
3
3
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
0 10 20 30 40 50 60 70 80 90 100
Equal efforts
80
60
40
20
0 4 4 4 4 4 4 4 4 4 4 4
3 3 3 3 3 3 3 3 3 3 32 2 2 2 2 2 2 2 2 2 2
1
1
1
1
1
1
1
1
1 1 1 1
0 10 20 30 40 50 60 70 80 90 100
Emphasis on flexibility
Time (Month)
Quality 1 1 1 1 1 1 1 1
Delivery 2 2 2 2 2 2
Cost 3 3 3 3 3 3 3 3
Flexibility 4 4 4 4 4 4 4
2
Testing different effort policies
(i)

7. 7
Testing different effort policies
(ii)
Time (Month)
Quality 1 1 1 1 1 1 1 1
Delivery 2 2 2 2 2 2
Cost 3 3 3 3 3 3 3 3
Flexibility 4 4 4 4 4 4 4
2
200
150
100
50
0
4 4 4 4 4 4 4 4 4 4 4
3 3 3 3 3 3 3 3 3 3 3
2
2
2
2
2
2
2
2 2 2 2
1
1
1
1
1
1
1
1
1
1
1
1
0 10 20 30 40 50 60 70 80 90 100
Hierarchical effort
80
60
40
20
0 4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3 3 3 3 3 3
2
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1 1 1 1 1 1 1
0 10 20 30 40 50 60 70 80 90 100
Shift to
flexibility

8. 8
The methodological issue!?
• Other than in “conventional” system
dynamics, (so far) I do not study
causal linkages between structural
elements or between structure and
behavior.
• Rather, I take empirically established
quantitative relationships and analyze
their dynamic consequences, without
assumptions about causality.

9. 9
Research implications
• Theorizing about what constitutes
strategic capabilities
• Longitudinal studies about capability
development
• Qualitative studies about what constitutes
relationships between capabilities
• Simulation studies of causal structure and
effects on behavior
• Conceptualizing the capability-performance
link