Workforce Skill Choices and Manufacturing Environments

It has long been recognized that changes in production technology have effects outside the manufacturing unit of the firm. Although researchers have examined the effects of new technologies (e.g. increased automation) on the workforce, these studies have generally examined only technology effects, and have not examined ways of integrating workforce and manufacturing process technology decisions. This paper is a first step toward building a model that integrates workforce and operations decisions by identifying what factors drive managerial choices of skill levels in various manufacturing environments. The model is based upon the literature and empirical data from three case studies. Major findings are that skilllevel choices are driven by the complexity of a firm’s shop floor and external environments as well as specific labor force issues such as the existence of a union.