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In the business environment characterized by the severe global competition and the fast-paced changes, production functions of manufacturing companies must have a capacity of undertaking not only incremental improvement, Kaizen, but also large-scale improvement that is of a radial and innovative nature here called “Kaikaku” (Kaikaku is a Japanese word meaning change or reformation).

Moreover, production functions especially those located in high-wage countries must be proficient in radical innovation in production to maintain their competitive advantages. They must to be capable of creating new knowledge and constantly developing and implementing radically new production technologies, processes, and equipment which make their production systems more “unique”. Here, a unique production system means a production system that is valuable for the company’s competition, rare in the industry, difficult for competitors to imitate, and difficult for them to substitute.

Kaikaku is not a new phenomenon in the industry, and much research has been done on how to manage large-scale changes in Kaikaku. However, the previous research has rarely focused on the relation of Kaikaku and creating unique production systems. Kaikaku can be an effective means to create such systems. The objective of the research presented in the doctoral thesis is to propose how to plan and implement Kaikaku so that it contributes to creating unique production systems. To fulfil the objective, five empirical studies were conducted. In the empirical studies, data were collected through literature review, interviews, participant-observation, and action research. Japanese and Swedish manufacturing companies were studied.

General conclusions of the research are summarized as follows. In order to achieve Kaikaku so that it contributes to realizing unique production systems, the intent and commitment to realize such systems must be present at the strategic level of the organization. Organization structures and resources need to be prepared to support the mentioned kind of Kaikaku. A process of Kaikaku can be a less linear and systematic but more cyclic and emergent process which can be seen as a series of unfolding smaller improvement or development projects that are undertaken during Kaikaku to achieve overall objectives. In each projects exploration and organizational learning are facilitated. The research has also found a specific direction of how to develop a production system in order to make the system more unique. Finally, in the research, a design method that is helpful to create unique production lines, cells, and equipment has been found and studied