Changes in Operations Management due to Internet based Production Concepts — An Institution Economical Perspective

Currently we have to realize a major change in the technological basis of manufacturing or even all production processes: The diffusion of new information and communication technologies, especially Internet Technologies, on the shop floor. Applications of Internet Technologies may be directly implemented on the shop floor, e.g. in networking dislocated assembly lines, as well as in assisting management processes, e.g. in production planning and control. Both, formal and empirical studies have verified a significant increase in productivity of manufacturing processes by intraorganizational applications of modern information and communication technologies (Barua/Lee 2001, pp. 37). Therefore, this change has a high influence on operations management. While traditional Production Concepts such as Lean Production, World Class Manufacturing and Agile Manufacturing inevitably disregard this development, new Production Concepts arise that fundamentally consider the application of Internet Technologies on the shop floor. However, from a business management perspective, industrial firms have to accomplish new operating requirements deriving from this technological change. This paper provides a discussion of the consequences of Internet Technologies on operations management, as well as of production concepts based on Internet Technologies from an institutional point of view.