The effect of facility size on manufacturing structure and performance

Purpose – There has been considerable discussion over the last several years concerning the size of manufacturing facilities and their productivity. Anecdotal evidence suggests that smaller facilities are more productive than larger facilities since they tend to be more focused on a smaller set of products. The assumption is that as facilities become larger, they lose their focus by expanding their product mix and as a result, productivity suffers. Very little empirical evidence exists to support this idea.Design/methodology/approach – In an attempt to bring some empirical clarity to this question, a study was conducted involving over 300 US manufacturing facilities of various sizes, as measured by number of employees. The performance level of each facility was estimated through the use of 29 performance indicators. A statistical analysis was conducted addressing the relationship between facility size and performance.Findings – While some differences in operating characteristics between the two groups wer...