Linking manufacturing flexibility to innovation performance in manufacturing plants

In the past few decades, the concept of manufacturing flexibility has become a key competitive criterion for many manufacturing organizations. The importance of flexibility in supporting other competitive criteria such as cost, quality and delivery speed has also been recognized (Bolwijn and Kumpe, 1990). However, there is a dearth of studies linking flexibility with another competitive criterion - innovation. In this study, we investigate the influence of the interaction of mix flexibility and labor flexibility on product innovation based on a survey of UK manufacturing plants. Further, we investigate the role of climate for innovation both as an antecedent of product innovation and a moderator that moderates the influence of the interaction of mix flexibility and labor flexibility on product innovation. The analyses reveal that the interaction of mix flexibility and labor flexibility positively predicts product innovation in manufacturing plants. Climate for innovation positively predicts product innovation and also positively moderates the interaction of mix and labor flexibility on product innovation. The implications for theory and practice are discussed.