Assessment of the scale-scope dilemma in production systems: an integrative approach

Companies in high wage countries are increasingly confronted with the challenge of optimizing economies of scope and economies of scale simultaneously to succeed on a global market place. An integrated assessment of production systems facing this challenge is essential to evaluate the actual state of a company and to provide a basis for drawing the right conclusions to reconfigure production systems successfully. In this paper an integrated model for measuring economies of scope as well as economies of scale is introduced, defining the fundamental domains of a production system. The major objectives resulting from the overall scale-scope dilemma are broken down for each domain and the main dimensions for an assessment of each domain are defined. A new measure named Degree of Efficiency is defined, quantifying the fulfillment of the opposing objectives in each domain and hence, the contribution to an overall resolution of the scale-scope dilemma.