Flexible Manufacturing System - FMS

Categories: Company Management

You run a factory that makes buttons. The machines are calibrated to make buttons exactly 10.16 mm in diameter. Then, one day, one of the Kardashians starts wearing shirts with really big buttons. Big buttons are suddenly de rigueur...your clients insist you start making buttons at least 35 mm in diameter.

Good thing you have a flexible manufacturing system. This form of factory set up allows managers to adapt the production process. The buttons can change because the factory configuration is flexible.

Find other enlightening terms in Shmoop Finance Genius Bar(f)