LEAN,GREEN, AND THE QUEST FOR SUPERIOR ENVIRONMENTAL PERFORMANCE

We examine the relationship between lean manufacturing practices and environmental performance as measured in terms of air emissions and resource use. We draw on two unique surveys of 31 automobile assembly plants in North America and Japan, which contain information on manufacturing practice and environmental performance, as well as in‐depth interviews with 156 plant level employees at 17 assembly plants. Our survey results and interviews suggest that lean management and reduction of air emissions of volatile organic compounds (vocs) are associated negatively. Lean manufacturing practices contribute to more efficient use of paints and cleaning solvents, but these in‐process changes are not sufficient to meet the most stringent air regulations. We found some evidence to support the link between lean practices and resource efficiency. While our survey results were in hypothesized direction, they were not statistically significant. In‐depth semi‐structured interviews, however, suggest a more robust relationship, and we use them to describe some mechanisms by which all three aspects of lean management (buffer minimization, work systems, and human resource management) may be related to environmental management practices and performance.     

How Sourcing of Interdependent Components Affects Quality in Automotive Supply Chains

In the automotive industry, many firms source key components from different suppliers, even though the components may function interdependently. In this study, we investigate how component level interdependence impacts quality performance and analyze how various operational factors moderate this relation. We synthesize information from several case studies to model the quality challenges faced by an automotive firm. For several sub‐assemblies that go into its products, the firm sourced key components from two different suppliers. The sub‐assemblies would fail whenever a component fails, but due to interdependent operations, failure of one component could cause the failure of the other. The firm found it challenging to improve the suppliers' quality performance as it was difficult to trace the failures to specific components. Our analysis reveals that – (i) the impact of interdependence is governed by the supply chain structure: reducing the interdependence between components improves quality when suppliers provide the components, but reducing interdependence worsens quality when the firm manufactures the entire sub‐assembly; and (ii) the relation between interdependence and quality performance is moderated by factors such as penalties, production costs, and interdependence costs. Additionally, we find that quality performance is lower when the firm outsources the components than when the firm manufactures the entire sub‐assembly. We identify coordinating mechanisms that leverage incentives and penalties to bridge the quality performance gap.     

Design for the Environment: Life‐Cycle Approach Using a Newsvendor Model

Introducing environmental innovations in product and process design can affect the product's cost and demand, as well as the environmental impact in different stages of its life cycle (such as manufacturing and use stages). In this article, we advance understanding on where such design changes can be most effective economically to the firm and examine their corresponding environmental consequences. We consider a profit maximizing firm (newsvendor) deciding on the production quantity as well as its environmentally focused design efforts. We focus our results along the two dimensions of demand characteristics and life‐cycle environmental impact levels, specifically functional vs. innovative products, and higher manufacturing stage environmental impact vs. higher use stage environmental impact. We also discuss the environmental impact of overproduction and how it relates to the different types of products and their salvage options. We find that although the environmental impact per unit always improves when firms use eco‐efficient or demand‐enhancing innovations, the total environmental impact can either increase or decrease due to increased production quantities. We identify the conditions for such cases by looking at the environmentally focused design efforts needed to compensate for the increase in production. We also show that the environmental impact of overproduction plays an important role in the overall environmental impact of the firm. We conclude by applying our model to different product categories.     

An Empirical Investigation in Sustaining High‐Quality Performance

Many organizations that were once quality leaders have had challenges sustaining high‐quality performance. Although research has examined frameworks and concepts that lead to high‐quality performance, few studies examine how to sustain high‐quality performance. Sustaining performance may require additional capabilities from what it takes to achieve it. Drawing on quality management literature, organizational resilience literature, and the theory of dynamic capabilities in the strategy literature, this study empirically investigates the effects of four capabilities that help sustain high‐quality performance. The analysis shows that capabilities in improvement, innovation, sensing weak signals, and responsiveness all help sustain high‐quality performance. This suggests that what it takes to achieve high‐quality performance is different, in part, from what it takes to sustain it. The data comes from a survey of 147 manufacturing business units. The analysis shows that the relative benefits of these capabilities may depend on the level of competitive intensity and environmental uncertainty. The findings provide empirical support for a theoretical model and practical guidance for sustaining quality performance.     

Flexible manufacturing systems performance in U.S. automotive manufacturing plants: a case study

Flexible manufacturing systems (FMS) philosophy is a key weapon in achieving global manufacturing competitiveness. It encompasses a wide range of dimensions to improve all aspects of operational performance metrics. The aim of the study is to examine the current state of flexibility adoption in U.S. automotive manufacturing facilities and its impact on operational performance metrics. It utilizes survey questionnaire developed based on previous work in U.S. manufacturing industry. The survey was originally distributed to 420 facility managers in the U.S. domestic automotive industry. It was revealed that 70% of the respondents had implemented all 15 flexibility dimensions listed in the questionnaire. The data analysis conducted shows that implementation of certain flexibility dimensions will lead to significant improvement in specific operational performance metrics. This considerable finding can be used as a guide for manufacturing managers to achieve certain objectives in operational performance improvement in a rapidly changing environment.     

Lean Production Practices: International Comparisons in the Auto Components Industry1

In recent years the application of lean production principles has been forcefully expounded as the route to high-performance manufacturing. This paper examines the relationship between lean production and performance empirically, using data from a benchmarking study of 71 plants in the international automotive components industry. The top performing plants (and their suppliers and customers) showed consistently better process control than did the lower performing plants. UK plants did not perform very well in terms of either quality or productivity, and links between economic context and manufacturing performance are discussed in relation to the UK.     

Impact of Absenteeism on Assembly Line Quality and Throughput

Assembly lines function best when every worker is present. When a worker is absent, management must scramble to quickly find a replacement. Usually, the replacement will not be as proficient as the absent worker. This can reduce quality and throughput. We present two assembly line work‐systems models (one for lines with Andon and one for lines without Andon) that show one mechanism whereby absenteeism could impact quality and throughput. We exercise these models to provide insights into absenteeism's impact on quality and throughput. While the paper is written in the concrete terms of automotive assembly, the concepts and results apply to manual assembly lines in general.     

The adoption of multiple certification standards: perceived performance implications of quality,environmental and health & safety certifications

This study assesses the combined impact of multiple certifications (i.e. ISO 9001, ISO 14001, OHSAS 18001) on perceived performance dimensions related to quality, environmental and occupational health and safety. Using survey data collected from 59 Irish manufacturing plants in 2014, we employed MANCOVA and regression analysis to test our proposed hypothesis. The results suggest that companies that are simultaneously ISO 9001, ISO 14001 and OHSAS 18001 certified are significantly better performers with regard to environmental and occupational health and safety compared to companies without multiple certifications. However, from a perceived quality performance perspective, having these multiple certifications doesn’t seem to be an effective performance improvement tool.     

Longitudinal Analysis of Inhibitors of Manufacturer Delivery Performance

This article examines demand, manufacturing, and supply factors proposed to inhibit manufacturer delivery execution. Extant research proposes many factors expected to harm delivery performance. Prior cross‐sectional empirical research examines such factors at the plant level, generally finding factors arising from dynamic complexity to be significant, but factors arising from detail complexity to be insignificant. Little empirical research examines the factors using product‐level operating data, which arguably makes more sense for analyzing how supply chain complexity factors inhibit delivery. For purposes of research triangulation, we use longitudinal product‐level data from MRP systems to examine whether the factors inhibit internal manufacturing on time job rates and three customer‐oriented measures of delivery performance: product line item fill rates, average delivery lead times, and average tardiness. Our econometric models pool product line item data across division plants and within distinct product families, using a proprietary monthly dataset on over 100 product line items from the environmental controls manufacturing division of a Fortune 100 conglomerate. The data summarize customer ordering events of over 900 customers and supply chain activities of over 80 suppliers. The study contributes academically by finding significant detail complexity inhibitors of delivery that prior studies found insignificant. The findings demonstrate the need for empirical research using data disaggregated below the plant‐level unit of analysis, as they illustrate how some factors previously found insignificant indeed are significant when considered at the product‐level unit of analysis. Managers can use the findings to understand better which drivers and inhibitors of delivery performance are important.     

EFFECTS OF OPERATIONAL EMPLOYEE SKILLS ON ADVANCED MANUFACTURING TECHNOLOGY PERFORMANCE

This study employs structured interviews in a field setting to develop an in‐depth understanding of how a specific human resource decision affected manufacturing performance at 30 plants using advanced manufacturing technologies. Initial results suggested that there is no relationship between the skill level of operational employees and the level of performance of the installations. When a measure of “fit” between environmental characteristics and skills was employed, however, there was a significant relationship between the fit measure and performance.     

Computer support for continuous improvements

Abstract. The view of manufacturing has changed in recent years. This is evident from how the focus of management's attention is shifting more and more towards the basics of operating the business. The challenge to manufacturers in the West today is how to introduce leaner practices in their operations. The objective of this paper is to demonstrate how computer technology and information systems can be applied to support the transition to leaner practices in a complex operation. The problem with the large information systems developed to manage the complex operations of many Western companies is that they were designed to help maintain performance and not to support finding opportunities for new improved practices. Results from the ESPRIT II project, CIM for Multi-supplier Operations (CMSO), show that an existing data infrastructure can be effectively utilized to develop inexpensive, customized tools to support a process of continuous improvements. In this project a set of tools for planning the material flow from supplier to the assembly line was developed for the Saab-Valmet automobile assembly plant in Uusikaupunki, Finland. Hypertext tools were used to quickly develop decision support applications that supported problem solving and finding improvement potentials.     

Examining the Impact of Speed of Quality Improvement on Quality-Related Costs

The Fine (1986) quality-based learning curve model is extended to include the consideration of speed of quality improvement. The model demonstrates that under different circumstances rapid quality improvement effects are either beneficial or detrimental to improvement in quality-related costs. Hypotheses are developed from the analysis of this speed of quality improvement model. The hypotheses are tested in an automotive parts manufacturing company with five similar plants. Results show that with an increase in the speed of quality improvement, the rate of growth in prevention and appraisal costs decrease and the rate of growth in failure costs are unaffected. Rapid speed of quality improvement does yield lesser decreases in failure costs than slower, steadier improvement. However, rapid speed of quality improvement does not yield the predicted lesser decrease in prevention and appraisal costs than slower, steadier improvement. Rapid speed of quality improvement might or might not benefit the organization, perhaps an explanation for some Total Quality Management (TQM) failures. A more deliberate, learning organization is suggested from this research.     

On Decisions for Integration Implementation: An Examination of Complementarities Between Product‐Process Technology Integration and Supply Chain Integration

Research has shown that both product‐process technology (PPT) integration and supply chain integration efforts produce operational benefits, yet synergies between these types of integration are not well understood. This article empirically examines strategic customer integration and supplier integration as complementary activities for PPT integration, with the aim of helping manufacturing plant managers to intelligently implement mutually supportive types of integration. We set two conditions for establishing complementarity: (i) one type of strategic integration must positively influence the adoption of another and (ii) the two types of strategic integration must exhibit a synergistic fit with respect to manufacturing plant capabilities. We test these conditions using survey results representing 224 manufacturing plants. The findings show positive complementarities between PPT integration and supplier integration with respect to quality, delivery, and process flexibility. Also, positive complementarities exist between PPT integration and customer integration with respect to quality and new product flexibility. The results extend the emerging theory of strategic value chain integration and provide guidance to manufacturing managers who wish to assemble strategic integration policies.     

QoS in the internal supply chain: the next lever of competitive advantage and organisational performance

This article presents a research that examines the relationship of quality of service (QoS) and organisational performance in a manufacturing setting. There are few empirical studies that measure QoS in the manufacturing supply chain. A model linking QoS with organisational performance through intermediate variables of satisfaction, loyalty and competitive advantage is introduced and tested in the internal supply chain of three automotive organisations. The research design for this article includes a combination of literature review, exploratory interviews with scholars and practitioners, and a survey of 156 practitioners in three automotive companies in North India. Structural equation modelling has been used for data analysis. This research comes out with four factor scale for internal service quality and six-factor scale for external service quality. The research revealed that employee-driven QoS is a source of value addition that is positively linked with the organisational performance. This study would be of interest to manufacturing industry practitioners interested in internal and external service quality improvements. Future researchers could validate this scale, and empirically test the proposed model.     

The Impact of Complexity on Knowledge Transfer in Manufacturing Networks

Coordinating knowledge transfer within multi‐plant manufacturing networks is a challenging task. Using a computational model, we examine when it is beneficial to create production knowledge within a central unit, the “lead factory,” and transfer it to geographically dispersed plants. We demonstrate that the knowledge transfer generates a trade‐off between a positive cost‐saving effect due to fewer adaptations in each plant, and a negative transfer cost effect due to the costly knowledge transfer itself. The complexity of the production process moderates the performance implications of the knowledge transfer because it determines the relative strength of these two effects. For production processes with low complexity, knowledge transfer can engender superior network performance. Here, an optimal extent of knowledge transfer exists, and thus, a complete knowledge transfer is not performance maximizing. For production processes with medium and high levels of complexity, performance is reduced rather than enhanced through knowledge transfer so that it is optimal not to transfer any knowledge from the lead factory to the plants. While we analyze knowledge transfer within a manufacturing network, our results are transferable to other settings that consist of a knowledge sending and receiving unit.     

Quality‐related Action Programs: Their Impact on Quality Performance and Firm Performance

From analyses of the direct effects of 10 quality action programs on six firm performance outcomes, as well as their indirect effects through eight quality performance dimensions, two routes from action programs through quality performance to firm performance in the automotive supply industry are identified. The first is the product quality route, whose landmarks are superior quality performance on Conformance and Design Quality dimensions; the second is the relationship quality route, with superior Customer Responsiveness and Service. Both the product quality and the relationship quality routes lead to superior ROI; the former also leads to enhanced ROA, and the latter to enhanced market share performance. Associated key action programs are Committed Leadership, Cross‐Functional Quality Teams, Employee Empowerment, Supplier Development, and Closer Customer Relationships. The first three are internally focused, while the latter two are boundary‐spanning supply chain programs.     

AN EXAMINATION OF THE INDIRECT PRODUCTIVITY GAINS FROM QUALITY IMPROVEMENT

Recent theoretical work suggests that quality-improvement activities can yield significant indirect effects through process improvements and reduced factory congestion and confusion, benefits that are overlooked or hidden in most management accounting or cost of quality systems. Using time series data from two consumer durables manufacturing plants, I estimate the indirect productivity gains from quality improvement. The evidence from the plants indicates that the indirect effects from improved quality are at least two to three times the direct benefits attributable to lower scrap, rework, and inventory holding costs. An important implication of these findings is that companies that justify investments and measure performance based only on the direct costs of poor quality will motivate managers to make suboptimal decisions regarding quality-improvement activities.     

The Roles of Worker Expertise,Information Sharing Quality,and Psychological Safety in Manufacturing Process Innovation: An Intellectual Capital Perspective

This paper examines the roles of three elements of intellectual capital in implementing process innovations. Building upon prior literature, we develop a model describing how worker expertise, information sharing quality, and psychological safety work together as elements of the human, structural, and social dimensions of intellectual capital to influence the technical success of manufacturing process innovation (MPI) projects. Results of an analysis of data describing 179 MPI projects in US firms strongly support a multidimensional, process‐oriented view of intellectual capital's effects on MPI project technical performance. We also find that the incrementalness of an MPI project plays a moderating role over the relationship between worker expertise and MPI performance. Our study provides insights on how intellectual capital can be more effectively accumulated in a project environment.     

Managing AMI in a Just-In-Time Environment in the UK and Japan

In recent years many commentators have addressed the ‘crisis’ in manufacturing industry (Gerwin, 1982; Drucker, 1988, 1990; Hayes and Jaikumar, 1988). Some have offered cross-national comparisons on Japanese and Western management methods and techniques (Kharbanda and Stallworthy, 1991; Oliver and Wilkinson, 1987; Pascale and Athos, 1981) whilst others have concentrated on improving performance in specific fields such as management accounting (Kaplan, 1984; Cooper, 1991) or manufacturing management (Schonberger, 1982; Halt, 1983). Empirical research into managing AMT in Japan and the UK (Currie 1991a) considers some of the broader managerial issues in manufacturing. Cultural differences are common in the areas of investment appraisal, post-auditing of AMT and preventive maintenance policy. For example, in Japan JIT is perceived ‘holistically’ incorporating production management, total quality assurance (TQA) and total preventive maintenance (TPM). This is contrary to the UK in that many large manufacturing companies fail to include TPM in their manufacturing strategies (Currie and Seddon, 1991). There are few management information systems (MIS) which provide an understanding of machine performance using both non-financial and financial information. Focusing on maintenance as a central theme, the paper discusses the development of the Failure And Scheduled Maintenance Analysis (FASMA) system, which offers a practical solution to the problem of collecting and manipulating manufacturing data on the shopfloor (Seddon, 1991a). Essentially, FASMA attempts to interface both the manufacturing and management accounting functions by translating machine performance data into valuable information from which preventive maintenance policy may be improved. Using FASMA to measure machine performance at a major UK automotive manufacturer, machine down-time has averaged 61% each month over a 3-year period. By manipulating this data, performance measurement information may be utilized by management accountants. FASMA thus develops a link between manufacturing and management accounting by providing data on machine performance which can be used for cost analysis within a manufacturing environment. The paper concludes by arguing that manufacturing strategies can only be developed using appropriate management information systems (MIS) designed to enhance functional integration. This will enable a better understanding of how the ‘manufacturing jigsaw’ fits together.     

The Influence of ISO 9000 Certification on Process Compliance

This article examines the influence of ISO 9000 certification on plant‐level process compliance, which arguably is its first‐order, targeted performance dimension. The empirical setting is the medical device manufacturing industry. Process compliance is measured through Food and Drug Administration inspections of manufacturing plants. We control for several observable factors that possibly affect process compliance by matching certified plants with non‐certified plants. Using longitudinal data, we find plants that obtained certification in the earlier diffusion period (early‐certified plants) tend to have significantly better process compliance than a matched, non‐certified control group of plants. The compliance difference between early‐certified plants and their matched control group is greater than the compliance difference between late‐certified plants and their matched control group. We also find deterioration in process compliance over time after certification. Because we capture longitudinally the first‐order effects of ISO 9000 on process compliance, this study provides a useful baseline for assessing causality in ISO 9000‐performance linkages. Also, we explain, in part, the inconsistencies observed in related ISO 9000 literature examining the performance effects of certification. Further, this research offers managerial insights on the dynamics of certification and process compliance with time, and highlights the need for continued vigilance post certification.