Production Phase-out During Plant Shutdown

Abstract

Today's industry environment is characterized through a very unpredictable market. Therefore, companies establish robust production and logistics systems [1]. However, sometimes the established robustness does not prevent companies from location dynamics, including plant shutdowns or plant relocation [2]. Then, particularly, when big companies are involved and plenty of jobs are at risk, the public pressure is immense [3], which requires an effective management. Even though the market forces are obvious, the research intensity related to plant shutdowns is comparably low [4]. Appropriate expertise can be gained especially for the production phase-out (a repeated procedure), which is the operative implementation of every plant shutdown, but also takes place during standard product elimination. The paper's aim is primarily to conceptualize the different plant shut-down options. Second, it targets on analyzing how the production phaseout and the plant shutdown are organized in industry and to investigate if and how these processes can be standardized to avoid inefficiencies. In-depth expert interviews have been conducted. A purposive sampling strategy was followed including companies ex-post to their plant shutdown caused by insolvency, consolidation, offshoring, divestment/product elimination and outsourcing. Based on the empirical results, the relation between production phase-out and plant shutdown is emphasized. The evidence results in a framework of plant shut down reasons and concluding processes. The further developed process for production phase-out during a shutdown displays a form of guideline for companies.