Abstract Today’s business environment involves a globalised market, greater than before competition and more challenging customers, all factors which contribute to higher uncertainty and variability. Manufacturing flexibility is becoming more important in order to cope with the complexity of products through frequency volume changes and evaluations of the technological requirements of products. The research for this thesis was performed within a subcontractor company, Laserkraft AB, who focus on laser cutting, turning and welding processes in their production. The company utilises a variety of volume and product mixes, which is in correlation with the objective of this study. The purpose of this research was to investigate the common source drivers in order to achieve volume and product mix flexibility on batch production systems. First, a literature review was conducted in order to build the framework of common source factors between volume and product mix flexibility. Then, a single case study was conducted to examine the outcomes of framework on batch production. In this case, qualitative techniques included interviews and an observation of the shop floor. The analysis of this study was conducted with empirical research on a case study and theoretical framework from literature. From the literature stand point; it was found that flexible manufacturing competencies (FMC) and strategic flexibility approaches are two main elements to determine internal source drivers between volume and product mix flexibility. The groups of common source factors were then analysed with respect to characteristics of batch production systems at the chosen company. A comparison between the framework and the empirical findings identified source drivers in order to achieve volume and product mix flexibility. Due to the limited nature of the study, all source factors that have an impact on achieving volume and product mix flexibility might not be presented in this thesis. Besides, it is difficult to generalise the result on a single case study. As a result, each organisation and industry refers to their product, process and type of layout, and requires a group of practices to achieve volume and product mix flexibility. This thesis concludes with the top three common source factors between volume and product mix flexibility such as: set-up time reduction, multi-trained employees and advanced manufacturing technology.

Laws and regulations are controlling and have generated great impact on the pharmaceutical industry and putting high requirements on production to follow good manufacturing procedures. There is a high pressure on production to decrease the time-to-volume for new products implementations due to the long product development phases where the medicine product patent life only have 35-40% left when production can start. This have generated that production have applied a way of thinking when developing production lines that have a tendency of becoming a scale up over time where a new production line is added to the production plant to be able to produce the volume needed for customers. Astra Zeneca, one of the largest pharmaceutical companies in the world, predicts a future where they will need to handle more products launches parallel where the new product will be produced both in small and large volumes to new customers. In this thesis a single case study have been performed at where a new product is being implemented, the project Genuair at Astra Zeneca Sweden operations in Södertälje. This thesis have be executing with the overall aim of supporting the development of a new layout, a functional layout. The project Genuair is a project where a new product is introduced in a new way, by buying a patent. The project is in the beginning of building the first production line that have a continuous flow layout and there is already a plan to build a second production line to be able to produce the needed volume. The predicted future for the Genuair products is in line with the general predicted future within Astra Zeneca generating a need for higher volume flexibility and higher product-mix flexibility. This change will have an impact on the current Genuair production layout generating a decreasing of 45 % in volume output after analyzing the production line by building a simulation model. The current production layout is facing different limitations where long complex changeovers is the main reason for the decreasing in volume output. The current layout is also generating limitations where production is limited by equipment, vulnerable for shutdowns, laws and regulations and the need for fulfilling the capabilities of safety, health and environment, quality, deliverability and cost. A functional layout is presented that builds on achieving volume flexibility, product-mix flexibility and expansion flexibility. The introduction of a functional layout will generate challenges within the areas of laws and regulations, compliance, location of machines in different hygiene zones, traceability, material handling, the product-process matrix and the mind set within Astra Zeneca. The functional layout is analyzed by the development of a simulation model and compared to the current production layout and proven to handle the predicted future by primarily handling the changeovers in a different way that is the main limitation that follows by having a need for high volume flexibility and product-mix flexibility within the pharmaceutical industry. The functional layout will generate a higher degree of flexibility that will come to the expense of cost.