Interaction between Manufacturing Operations Strategy and Supply Chain Strategy - A conceptual framework and interaction models building

Abstract: Problem – Research in Operations strategies (OSs) has achieved a fundamental consensus on what constitutes it concerning process and content. However, it is still underdeveloped and without a consensus on what a Supply chain strategy (SCS) is and what constitute it; it is also unclear regarding how the OSs and SCSs can be tailored and how are they related to each other in an organization. Therefore, both the theory and the industry call for a relevant research in filling this gap. Purpose – The purpose is to review the literature on manufacturing OSs as well as on SCSs, with a strong focus on conceptualizing SCSs mainly in aspects of its decision framework; also the thesis work includes developing models that can describe how these two types of strategies are related in the strategic fit process. Accordingly, two research questions are formulated to achieve this research purpose: Research question 1: What is a supply chain strategy and what detailed strategic decisions and elements constitute it? Research question 2: How can supply chain strategy and manufacturing operations strategy interact and be related to each other to realize the company’s strategic objectives? Method – The work is mostly theoretical, it conducts literature studies and upon which builds a conceptual framework and interaction models, but a case study is conducted to compare and verify the built conceptual framework and interaction models. Results – The definition of SCSs is extended and a detailed decision framework for SCSs is constructed and tested at the case company Alfa Laval, which gives empirical support for the reliability and validity of its contents. ‘Inside-out’ and ‘Outside-in’ models are built to describe the interactions between OSs and SCSs, the ‘Inside-out’ model is verified according to the Case study while the ‘Outside-in’ model hasn’t received empirical evidence and calls for further research on it. The paper also figures out two contingency factors that influence the adaptation and choices of the conceptual framework and models: The degree and complexity of operations; and the organizational structure.