Process flexibility: design, evaluation, and applications

One of the most effective ways of minimizing supply/demand mismatch costs, with little increase in operational costs, is to deploy valuable resources in a flexible and timely manner to meet the realized demand. This notion of flexible processes has significantly changed operations in many manufacturing and service companies. For example, a flexible production system is now commonly used by automobile manufacturers, and a workforce cross-training system is now a common practice in many service industries. However, there is a trade-off between the level of flexibility available in the system and the associated complexity and operating costs. The challenge is to have the “right” level of flexibility to capture the bulk of the benefits from a fully flexible system, while controlling the increase in implementation costs. This paper reviews developments in process flexibility over the past decade. In particular, we focus on the phenomenon, often observed in practice, that a slight increase in process flexibility can lead to a significant improvement in system performance. This review explores the issues from three perspectives: design, evaluation, and applications. We also discuss how the concept of process flexibility has been deployed in several manufacturing and service systems.