Evolution in the strategic manufacturing planning process of organizations

Abstract

Abstract This study examines how strategic manufacturing planning processes vary systematically with respect to planning characteristics, and how the planning process appears to evolve over time. Through an empirical evaluation of over 200 U.S. manufacturers, we document the existence of four strategic manufacturing planning groups. These groups vary with respect to the degrees of “rationality” and “adaptability” of planning. In addition, the strategic manufacturing planning history and level of planning maturity differs between these groups, providing evidence that the planning process changes and evolves over time from “non‐rational adaptive” mode towards a more “rational adaptive” approach. Firms between these polar extremes appear to take different paths in their movement toward a “rational adaptive” mode, with some “focusing on rationality” first and others “focusing on adaptability” first. We also show that irrespective of the firm's environment, a greater degree of “rational adaptivity” is correlated with better planning outcomes and business performance. As such, it represents a “best practice” approach to strategic manufacturing planning. Insights created by this work not only make an important contribution to the manufacturing strategy literature, but can also be used by senior manufacturing managers to facilitate their progress towards more effective planning.