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The Lead Factory Concept: Benefiting from an Efficient Knowledge Transfer

Patricia Deflorin (), Helmut Dietl, Markus Lang () and Maike Scherrer-Rathje ()
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Maike Scherrer-Rathje: Institute for Technology Management, University of St. Gallen

No 127, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: This paper analyses the effectiveness of knowledge transfer between research and development (R&D) and intra-firm production units. Specifically, two distinct network structures are compared: the lead factory concept and traditional networks of R&D and production. Based on an analytical two-stage decision model for prototype and serial production, we highlight relevant factors that determine the relative advantages and disadvantages of the lead factory concept in comparison to a traditional network structure. In particular, the lead factory concept is more cost-efficient than the traditional network if there are a high number of production plants, the adaptation costs for implementing the transferred prototype from the lead factory to the plant are low, the manufacturing costs for the prototype are high, and the manufacturing processes are not highly specific or knowledge intensive.

Keywords: Operations Management; Manufacturing; Lead Factory; Knowledge Transfer; Cost Benefit Analysis (search for similar items in EconPapers)
JEL-codes: D21 D83 M11 L60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ipr, nep-pr~ and nep-knm
Date: 2010-05
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http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/127_ISU_full.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:iso:wpaper:0127

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