The Dynamics of Industrial Location
Factories, firms and production systems
Factory, Firm and Production System
1. Factories AKA as plants, establishments. Designed to house manufacturing operations. Special purpose buildings. Discrete and tangible. Occupy specific site. May be big, small, tall or flat. Often dangerous places.
Factory system associated with onset of Industrial Revolution. Workshops Factories can be highly specialized or vertically integrated. Limited autonomy or multi-functional. An important type of factory is the 'focal factory' which according to Fruin has been especially important in Japan since mid-1950s.
2. Firms AKA as enterprises, corporations. Legal entity. Public corporations and private corporations. Decision making entity. Plot strategies. Create organizational structures. Firms can take on many different forms. Entrepreneurial; divisionalized. M -form and U-form. Professionally managed or family run. Chinese prefer to keep control in family even in very large organizations. Bamboo network. Guanxi. In west and Japan, strong commitment to professional managers. Single plant firms. Multi-plant firms. MNCs; TNCs. Specialized, intergrated, conglomerate. Kieretsu. 3. Production systems AKA as networks; industrial districts are a special case. Inter-firm relationships - firms tied together to produce a particular product. Thousands of firms are involved in manufacturing cars, planes, stereos etc. Core firm dominated, SME dominated. Hierarchical or lateral. Putting out systems are traditional form of production system. Permeability It is important to recognize that FFPS has permeable boundaries. Not a nested hierarchies. To some extent factories, firms and production systems represent alternative ways to organize production and related services. Cf. focal factories with specialized branch plants Cf Toyota's production system (factory without walls) to Ford's Rouge River plant. See Firm F in Table 13.5 Nike in chapter 12 MB's dilemmma - wants to contract out to some extent to gain 'flexibility' (create production systems) but it also wants to internalize some functions to maintain qulaity control and security. Contract out kraft pulp, some logging while internalizing door components. Thinking about dry kilns etc. The rise of Japan has really made us think about these issues. Favour production systems. Thesis: Production system s are becoming more important because world is mor edyna,ic and differentiated and can't develop specialist skills and flexibilities yourself. Just got to rely on specialist firms. (Also spreads administration). But this thesis is constantly questioned. Not clear, for example, how to create production systems where they do not exist. Also not clear what geog implications are. Concentration is conventional wisdom. But what about 'virtual real factory' in which production systems are all organized around electronic communications allowing firms to locate where they want? Term paper. Chapter 2