ABSTRACT
This chapter is concerned with the impacts of flexible automation and associated organizational techniques on scale and scope, and the technical and economic reasons for such an impact. According to the discussion in Chapter 1, the predictions of the existing literature for product scale and scope are of a reduction in product scales due to lower setting-up times and a wider variety of goods and economies of scope arising from those lower setting-up times and from the flexibility of the new technologies. With regard to plant scale, there are widely divergent views, some pointing to lower optimal plant scales and economies of scale, or ‘de-scaling’, because of the divisibility and lower fixed costs of flexible automation, while others pointing to higher optimal scales and economies of scale, or ‘scaling-up’, due to higher efficiency and capital fixed costs. Finally, regarding firm scale, the main expectation is for higher scales arising from larger R & D and marketing fixed costs.
