5.6 Resource Flexibility
Resource flexibility refers to the ability of an organization’s resources (workforce, facilities, and equipment) to adapt to changing operational requirements. The degree of flexibility required is determined by the firm’s competitive priorities, such as product customization, responsiveness, and cost efficiency.
For instance, when a firm competes on product customization or operates in markets with short product life cycles, it must rely on a flexible workforce capable of performing a wide range of tasks and on general-purpose equipment that can be quickly reconfigured. Conversely, when the focus is on cost efficiency and high-volume production, specialization and dedicated equipment may be more appropriate.
Primary Dimensions of Resource Flexibility
Two primary dimensions of resource flexibility are:
Workforce Flexibility
Operations managers must decide whether to employ a flexible workforce —employees who are cross-trained to perform multiple tasks across different workstations or not. This flexibility enhances responsiveness and adaptability, but comes at a cost:
- Advantages: Greater adaptability to product variety and volume fluctuations
- Challenges: Requires significant investment in training and development; may lead to higher labour costs
The choice of workforce structure also depends on volume variability:
- Stable demand: A permanent, full-time workforce is typically preferred
- Fluctuating demand: A mix of part-time, temporary, or contract workers may be more cost-effective
Equipment Flexibility
The selection of equipment depends on the product mix, volume, and customization level:
- Low volume, high customization: Requires general-purpose equipment that is flexible and relatively inexpensive, with low fixed costs and high variable costs.
- High volume, low customization: Justifies investment in specialized equipment with high fixed costs but low variable costs, leading to economies of scale.
Types of Flexibility
- Product Flexibility: The ability to produce a wide range of products or services
- Volume Flexibility: The ability to operate efficiently across a wide range of output levels
For example, a 24-hour fast-food restaurant demonstrates volume flexibility by adjusting staffing and operations to match demand fluctuations throughout the day.
“4. Process Management: Types of Process and its Implication in Operation Strategy” from Operations Management by Sudhanshu Joshi is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.—Modifications: Used section 5; reworded; added further content.
