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  • 2019
  • Working Paper
  • HBS Working Paper Series

Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 8 Rationalizing Flow Processes

By: Carliss Y. Baldwin
  • Format:Print
  • | Language:English
  • | Pages:27
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Abstract

The purpose of this chapter is to examine the value structure of flow production processes and to explain why it is necessary to rationalize flow processes using the tools of systematic management. I first explain the problems facing managers of multi-step flow production processes at the end of the 19th Century. I introduce a model of the value structure of a production process made up of interdependent steps and define the production bottleneck of the process. I use the mathematical definition of a bottleneck to derive two general properties of stochastic multi-step flow processes with bottlenecks. These properties imply a need for ongoing managerial oversight and intervention using a set of tools that went by the label systematic management. Without active systematic management to address production bottlenecks, large-scale flow processes can easily collapse into chaos. I then argue that that the use of automated machinery, larger (or growing) markets, and systematic management are supermodular complements: each attribute makes the other two more valuable. The next chapter will explore how the technological requirements of multi-step flow production processes affect the optimal design of organizations implementing these technologies.

Keywords

Flow Processes; Bottlenecks; Systematic Management; Production; Management; Problems and Challenges

Citation

Baldwin, Carliss Y. "Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 8 Rationalizing Flow Processes." Harvard Business School Working Paper, No. 20-032, September 2019.
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About The Author

Carliss Y. Baldwin

→More Publications

More from the Author

    • 2021
    • Faculty Research

    Computer-Implemented Methods and Systems for Measuring, Estimating, and Managing Economic Outcomes and Technical Debt in Software Systems and Projects: US Patent 11,126,427 B2

    By: Daniel J. Sturtevant, Carliss Baldwin, Alan MacCormack, Sunny Ahn and Sean Gilliland
    • 2020
    • Faculty Research

    Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 7 The Value Structure of Technologies, Part 2: Strategy without Numbers

    By: Carliss Y. Baldwin
    • 2020
    • Faculty Research

    Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 6 The Value Structure of Technologies, Part 1: Mapping Functional Relationships

    By: Carliss Y. Baldwin
More from the Author
  • Computer-Implemented Methods and Systems for Measuring, Estimating, and Managing Economic Outcomes and Technical Debt in Software Systems and Projects: US Patent 11,126,427 B2 By: Daniel J. Sturtevant, Carliss Baldwin, Alan MacCormack, Sunny Ahn and Sean Gilliland
  • Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 7 The Value Structure of Technologies, Part 2: Strategy without Numbers By: Carliss Y. Baldwin
  • Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 6 The Value Structure of Technologies, Part 1: Mapping Functional Relationships By: Carliss Y. Baldwin
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