The strategic role of the plant: testing Ferdows’s model

Abstract

The literature on global manufacturing strategy contains few models that help managers to design and manage their global plant network. An interesting model is the one developed by Ferdows, describing the strategic role of plants. This paper discusses and tests this model. The data provide strong empirical support for the model and add some new insights. It is shown that the role of the “center of excellence” in a manufacturing network is not restricted to plants with know‐how as the primary location advantage, but is also a common role for plants with market proximity as the primary advantage. Also, the model proves to be useful for the description and assessment of today’s network of plants, but it is too limited to serve as a typology for new plants that might be added to the network. Finally, the research shows that the perception of headquarters and of plant management concerning the plants’ strategic role may be very different.