Title: Economies of integration: a new manufacturing focus

Authors: Hamid Noori

Addresses: Center for Operations Management Education and Research (COMER), Graduate School of Business Administration, University of Southern California, Los Angela, CA 90089-1421, USA; Research Centre for Management of New Technology (REMAT), School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario N2L 3C5, Canada

Abstract: The need to respond to competition is becoming a dominant theme in the argument advocating new technology acquisition. Clearly, the choice of technology should be based on the complete manufacturing strategy of each company rather than being simply a defensive response. This paper discusses the technological characteristics of economies of scale and economies of scope, and maintains that there is potential with the new technology to realise both scope and scale economies simultaneously, making their relationship interdependent. Furthermore, while the paper does not purport to develop a fully theoretical basis, it contends that to focus on only one of the economies limits he potential strategic manufacturing options of the firm. Achieving both economies concurrently will prove to be a key competitive axiom in many industries in the future. This axiom is referred to as |economies of integration|.

Keywords: economics of scale; economies of scope; economies of integration; manufacturing strategy; integrated manufacturing; new technology; technology management.

DOI: 10.1504/IJTM.1990.025862

International Journal of Technology Management, 1990 Vol.5 No.5, pp.577 - 587

Published online: 25 May 2009 *

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