Scenario-based flexible manufacturing facility designs: Understanding lifecycle value

Across the U.S., there is an increasing supply of dormant or obsolete buildings, which have surpassed their useful life. In the manufacturing sector, the rate of facility obsolescence is especially high. Because the facilities in this sector are typically customized for a specific product or process, they struggle to accommodate rapid evolution in product families over their lifetime. While including flexibility into the design of a manufacturing facility can increase its ability to respond to change, the additional capital investment can be difficult for many owners to conceptualize and justify. For this reason, we present three potential front-end facility design strategies—dedicated, scalable and general purpose—as scenarios to explore a capital investment model. Two case studies, representing the highest and lowest investment scenarios, are used to investigate both the expected and unexpected realization of uncertainties, along with the facility’s ability to accommodate the actual changes. This research shows that, when uncertainty is realized, general purpose facilities offer the owner the lowest, long-term capital investment. Ultimately, however, this paper is limited by its consideration of uncertainty deterministically and thus proposes a path forward for future research.