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The success of any manufacturing concern greatly depends on the effective functioning of the management at the strategic level. The importance of Advanced Manufacturing Systems (AMS) such as Flexible Manufacturing Systems (FMS) has been increasing because of their competitive advantages. With fast changing markets manufacturing firms are facing challenges to satisfy pluralistic customers. Thus the concept of “flexibility” in manufacturing systems has attained significant importance in meeting the challenges for a variety of products at shorter lead‐times, together with higher productivity and quality. FMSs are, therefore, expected to be of great significance over the years to come. FMS focuses attention on the manufacturing firm at its strategic level. Describes the state‐of‐the‐art of the Indian machine tool industry and the scope for FMS. Continues with a review of the strategic issues which influence the implementation process of FMS and suggests a four‐stage strategic framework.

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