We investigated the relationship between flexibility and performance of manufacturing systems. In particular, the effect of varying flexibility in either part production requirements or the machines capabilities is examined. Conditions under which a positive correlation between flexibility and performance exists are identified and the characteristics of this correlation are described. System management and control mechanisms necessary for realizing the benefits of flexibility are outlined. The results are first illustrated through a series of models of specific manufacturing situations. A unifying and generic framework for flexibility modelling and analysis is then introduced. The framework is used to re-interpret and generalize the result of the previous models. It is also used to argue for the existence of a number of fundamental relationships between flexibility and manufacturing performance.