THE EROSION IN EUROPEAN MANUFACTURING

The competitiveness of Western European manufacturing is slowly being eroded away and European firms must act decisively to halt this decline. Costs in Europe are high and getting higher. Productivity is not keeping pace. European manufacturers have adopted some of the ideas that have proved useful to manufacturers elsewhere around the globe, but they need to do more. Many European countries remain net exporters of direct investment. If the erosion is to be halted, European manufacturers must address overcapacity, particularly among the many small factories there, inappropriate plant locations, and company organizations that foster too much country-specific independence.     

Competitive Capabilities among Manufacturing Plants in Developing,Emerging, and Industrialized Countries: A Comparative Analysis

Competitive capabilities have been defined as a plant's actual performance relative to its competitors, with the most commonly investigated capabilities being quality, delivery, flexibility, and cost. However, most research in this realm has investigated capabilities within developed countries, and neglected the context of developing and emerging nations, which are increasingly becoming viable economic entities in global supply chains in their own right. The present study fills this gap and carries out a comparative analysis of competitive capabilities among plants in developing, emerging, and industrialized countries. Basing our arguments on the resource‐based view of the firm, we suggest that the influence of competitive capabilities on each other varies among plants in differentially industrialized regions. Specifically, we suggest that, on average, competitive capabilities tend to influence each other to a greater degree in plants in emerging and developing countries compared to industrialized countries. Along similar lines, we suggest that the influence of the four competitive capabilities on performance improvement is manifested more strongly among plants in emerging and developing countries than among plants in industrialized nations. We investigate these contentions with data from 1,211 plants in 21 countries. The results are particularly important for decision makers as they decide on the increasingly global location of their manufacturing operations or the configuration of their global supply chains.     

SERVICE-BASED MANUFACTURING: THE SERVICE FACTORY

Evidence suggests that factory-based service will become the next form of competition among manufacturers. If this is true, then manufacturing executives will have to obtain a clear understanding of the service capabilities of their plants and adjust their strategies accordingly. We define a set of factory-based services, information, problem solving, sales, and support, and suggest that they be considered in developing manufacturing strategy. Several propositions provide a framework for future research by linking service performance variables to conventionally accepted manufacturing performance variables.     

MANUFACTURING STRATEGY AND BUSINESS ORIGIN OF NEW VENTURE FIRMS IN THE COMPUTER AND COMMUNICATIONS EQUIPMENT INDUSTRIES

With the use of questionnaire data from owners, presidents, CEOs, and chairmen of boards and a logistic regression approach, we analyzed the manufacturing strategies of 64 new-venture firms in the computer and communications equipment manufacturing industries. We found statistically significant differences in manufacturing posture as a function of whether the new venture was corporate-sponsored or independent (i.e., new venture origin). The findings suggest that independent firms attack the market with superior product quality with the use of technology in the public domain. They offer a narrow range of products directed to a few large customers and do not make developing new products a primary issue. In contrast, corporate-sponsored tirms are less concerned with superior product quality but emphasize patented technology and new product development. They provide a broader range of products and service smaller customer orders.     

MANUFACTURING STRATEGY ON THE “S” CURVE

The concept and techniques of “manufacturing strategy” offer managers the opportunity to use their production function as a strategic weapon in competition, an apparently attractive objective. Yet after about 25 years, the use of manufacturing in corporate strategy (MCS) as a management practice is not widespread. In contrast, however, in academic literature it appears to be flourishing and rapidly growing in popularity. This paper seeks to answer this apparent paradox, beginning with the history of MCS as it was developed as a theory of design to enable a manufacturing system to be focused on a key competitive task. Common criticisms of MCS, such as “tradeoffs,” “focus” and “undynamic,” are examined and refuted as valid reasons for its only modest usage. Instead, three “new” problems in the MCS concept and its techniques are suggested as genuine needs for the completion of the theory and for its becoming more universally understood and used by industrial managers.     

INCLUDING ENGINEERING IN OPERATIONS STRATEGY

Today's markets are characterized by time and product quality-based competition. Companies must compete through their ability to manage the whole cycle of product realization and delivery, from the initial concept through to delivery and support at the customer. They must do this through managing an integrated company, not a set of separate functions. This paper addresses the issue of how companies should develop operations strategies for engineering and manufacturing combined. It uses field research into 15 engineering companies to develop the concept of the manufacturing system mission, and proposes strategic choices for manufacturing, engineering and linked functions.     

EXPLORING THE STRATEGY-TECHNOLOGY CONNECTION IN SMALL MANUFACTURING FIRMS

Small manufacturing firms make a significant contribution to the economy. Yet, partly because of the greater availability of data on larger firms, strategic management and manufacturing strategy research have tended to neglect small business. Using a survey of small manufacturers, we examine the applicability of Porter's typology of generic strategies to this context and investigate the links between generic strategies and one important dimension of manufacturing strategy-technology management. The analysis of generic strategies shows consistency with previous work on larger firms and tends to support the use of the typology in this setting. Moreover, the internal and external influences on the technology adoption decision process vary significantly with generic strategies, implying that the role played by individuals and networks constitutes a dominant factor. Surprisingly, no distinction was found between firm groupings with respect to decision criteria, which suggests that the decision process of small firms remains rather inexplicit, informal, and, to a large extent, intuitive. We also found that technologically more sophisticated firms tend to hold stronger competitive positions and that technological strength appears to be related to both cost advantage and differentiation.     

PLANT‐LEVEL ENVIRONMENTAL MANAGEMENT ORIENTATION: THE INFLUENCE OF MANAGEMENT VIEWS AND PLANT CHARACTERISTICS

As customers, the public and other stakeholders are increasingly demanding that manufacturing firms improve their approach to environmental management, some plants have moved to develop an orientation that is increasingly proactive. Synthesizing earlier research, environmental management orientation is defined here to include system analysis and planning, organizational responsibility, and management controls. The relationship between a proactive orientation and two sets of internal factors, specifically the personal views of plant managers and plant‐specific characteristics, was tested using survey data from the furniture industry. The production outlook for the plant was critical, with a favorable outlook fostering a more proactive environmental management orientation. After controlling for plant‐specific factors, personal views also were influential; an increasing emphasis on short‐term economic value was related to a more reactive plant‐level orientation. Thus senior corporate management can foster strong plant‐level environmental management through a more balanced emphasis on economic and ethical values and continued investment in a plant's long‐term viability.     

THE INTERNATIONAL DIMENSION OF PRODUCTIVITY AND DEMAND SHOCKS IN THE US ECONOMY

This paper analyzes the cross‐country effects of productivity and demand disturbances in the United States identified with sign restrictions based on standard theory. Productivity gains in US manufacturing increase US consumption and investment vis‐à‐vis foreign countries, resulting in a trade deficit and higher international prices of US goods, despite the rise in their supply. Financial adjustment works via a higher global value of US equities, real dollar appreciation, and an expansion of US gross foreign liabilities as well as assets. Positive demand shocks to US manufacturing also increase investment and cause a real dollar appreciation, but have limited effects on the trade balance and net foreign assets. Our findings emphasize the importance for macroeconomic interdependence of endogenous fluctuations in aggregate demand across countries in response to business cycle shocks.     

Country location choices of service multinationals: An empirical study of the international hotel sector

This article examines international country location choices for equity investment undertaken by global hotel chains. Why do certain host countries attract more hotel investment than others? A second underlying issue that we tackle in this article is whether the traditional foreign direct investment determinants used in past studies on manufacturing also apply to services—or whether service sector-specific determinants are better explanatory variables for understanding the distribution of service foreign direct investment across countries.     

BUILDING THE POM CURRICULUM FOR A PRIVATIZING ECONOMY: AN EVALUATION FROM MANUFACTURERS‘ PERSPECTIVES

Manufacturing in Eastern European countries is in transition to open-market competition. One transitional issue is university education for operations managers from the perspective of business practitioners. Survey responses by 203 manufacturing professionals from 83 companies provide recommendations for operations management education at the University of Sibiu in Romania. The recommendations substantially reorient curricula that traditionally prepared students for professions in centrally controlled economies rather than for open-market competition. The redesigned curriculum has an educational advantage in its integration of production, marketing, and engineering, all under one college of engineering. However, the curriculum is inconsistent with some tenets of quality management and just-in-time production. Also, survey data imply a need for coverage of competitive manufacturing strategy that, currently, is underrepresented in the curriculum.     

我国制造企业“服务增强”的实证研究及政策建议

通过服务增强制造企业竞争力已成为全球化竞争和知识经济背景下我国制造企业的重要战略选择。本文研究我国制造企业服务增强的背景、概念、特征、机理和对策。在界定制造企业服务增强概念的基础上,本文提出并阐述了国内制造企业服务增强的质量弥补特征;随后基于调查问卷数据,对基于要素替代的质量弥补以及服务差异化竞争对绩效的影响展开实证研究;最后,指出国内制造业服务增强存在的不足和问题,提出对策建议。本文对企业管理实践者和政策制定者都有较强的启发意义。     

Vaulting trade barriers: The Japanese approach

An innovative marketing strategy pursued by Japanese manufacturers of a wide variety of durable consumer goods to successfully penetrate the Indian market, despite high entry barriers, is the subject of this report. Considerations that may justify imitation of the Japanese strategy by durable goods manufacturers in other industrialized nations to penetrate protected Third World markets are also discussed.     

REVISITING ALTERNATIVE THEORETICAL PARADIGMS IN MANUFACTURING STRATEGY

Testing and cross‐validation of theories and paradigms are necessary to advance the field of manufacturing strategy. When the findings of one study are also obtained in other studies, using entirely different databases, we become more confident in the results. Replication alleviates concerns about spurious results and is one motivation for this study. We examine aspects of the tradeoffs concept, production competence paradigm, and a manufacturing strategy taxonomy framework. In regard to the tradeoffs concept, we found evidence of tradeoffs between some, but certainly not all, manufacturing capabilities of quality, cost, delivery, and customization. The relationships get sharper when controlling for process choice. For example, the tradeoff between cost and customization is particularly strong between plants that have different process choices. We find that such tradeoffs can change, or even disappear, however, once the process choice is in place. With respect to the production competence paradigm, our analysis shows a statistically significant correlation between production competence and operations performance in batch shops, but not in plants with other process choices. Finally, using variables similar to those of Miller and Roth, our data produced three similar clusters even though their unit of analysis was much more macro than ours. Controlling for process choice is consistent with the current manufacturing strategy literature that emphasizes dynamic development of capabilities within the context of path dependencies. A major argument of this strand of research is that operations decisions not only affect current capabilities, but also set the framework for development of capabilities in the future. That being the case, controlling for process choice (or other factors such as industry or markets) should contribute to the understanding of capability‐development paths adopted by different manufacturing plants. In short, we found at least partial support for each of the theories examined here, even though the theories seem on the surface to be contradictory and mutually exclusive. Controlling for process choice or other measures of dependency goes a long way in uncovering consistency across different theories and empirical studies in operations management.     

Where Do We Go from Here?: Globalizing Subsidiaries Moving Up the Value Chain

This paper studies the international expansion of local subsidiaries of multinational enterprises (MNEs). The main questions asked are why and how MNEs' local subsidiaries in developing economies undertake international expansion. Drawing from the global value chain (GVC) perspective, I argue that local subsidiaries that were initially established to undertake production activities for export-oriented industries do not want to remain at the lowest-value-added position forever. They therefore undertake initiatives to get out of that position. The literature on initiative-taking subsidiary has predominantly focused on them becoming centers of excellence via R&D and innovation in the host country. I propose a different route of local subsidiary upgrading via foreign direct investment in more advanced countries. This strategy helps not only to gain internal prominence within the MNE network, but also to improve its external position within the GVC vis-à-vis the lead firms. The paper uses an in-depth case study of a Thai subsidiary of a Taiwanese electronic MNE to explore the transformation of the subsidiary from simply manufacturing for exports to becoming a strategic international expansion arm for the parent MNE.     

BENCHMARKING MANUFACTURING PERFORMANCE IN THE SEMICONDUCTOR INDUSTRY

A methodology for benchmarking manufacturing practices in the worldwide semiconductor industry is presented. Several metrics for measuring semiconductor manufacturing performance are defined and discussed. Interviews conducted during site visits are used to identify the managerial, technical, and organizational practices underlying superior metric performance. Multivariate statistical analyses of the performance metric data indicate that these performance metrics measure independent aspects of performance and expose significant performance differences among fabs.     

THE PLANT LOCATION DECISION IN MULTINATIONAL MANUFACTURING FIRMS: AN EMPIRICAL ANALYSIS OF INTERNATIONAL BUSINESS AND MANUFACTURING STRATEGY PERSPECTIVES

The paper combines perspectives from international business and manufacturing to examine multinational plant location decisions. The location choice in manufacturing is between integrated and independent plants, while the international choice is between a foreign and domestic plant relative to their headquarters' country. The study empirically investigates whether these choices have different plant location determinants using data from a survey of plant managers of large, multinational firms. We find more evidence that the manufacturing choices benefit from consideration of international business issues than vice versa. However, managers rank determinants associated with manufacturing strategy considerably higher than those associated with intemational business.     

A taxonomy of international manufacturing networks

Abstract

Manufacturing firms with multiple product groups do not need to involve all factories in the production of all product groups. Some factories may specialize on a small set of products, while others participate in the manufacturing of a broader set of products. However, current theories on international manufacturing networks do not explain in detail how organizations design international manufacturing networks for different products or product groups involving different sets of factories. This research investigates 20 product group networks at five global manufacturing firms. We distinguish between three types of factories: component manufacturing factories, assembly factories, and integrated factories (having both component manufacturing and assembly). Furthermore, we identify four network types: linear, divergent, convergent, and mixed structures. These four types exhibit distinctly different characteristics in terms of key characteristics, factory roles, product types, process types, market types, sourcing, and key managerial challenges. Most networks are relatively small – on an average consisting of four factories and some contain a number of subnetworks that are self-sufficient in terms of material flow and serve separate market regions. We identify two new types of factory roles related to component manufacturing competences, which we call ‘strategic feeder’ and ‘full lead’.     

ON THE RELATIVE PERFORMANCE OF FUNCTIONAL AND CELLULAR LAYOUTS- AN ANALYSIS OF THE MODEL-BASED COMPARATIVE STUDIES LITERATURE

Paralleling the increased interest in cellular manufacturing in recent years, a large number of studies have emerged that focus on the relative performance of cell systems and the functionally organized systems they replace. This paper is an analysis of studies that use model-based, controlled experimentation to seek answers to the questions of if, when, and why cellular layouts outperform their functional counterparts. Twenty-four model-based studies are analyzed with respect to their definitions of cellular versus functional layouts, the experimental factors that have been investigated, the results concerning relative performance, and the findings' relevance to layout choice. We conclude that although the comparative studies have been very valuable in their efforts at identifying the factors that embody the essence of cells and shape performance improvements, most of the basic findings are known from past research. Furthermore, the studies' findings cannot assist practitioners in making specific choices between existing layouts and alternative cell systems. However, the totality of the findings reinforce our knowledge of how work systems in general can be designed and organized to reduce throughput time, and can also be used to identify environments and conditions for which conversions to cells may have more or less potential.     

THE CHALLENGE OF MANUFACTURING ADVANTAGE

In spite of the significant progress made by a wide range of manufacturing companies over the past decade, few senior executives in U.S. firms would point to manufacturing as a significant source of competitive advantage. This paper seeks to explore some of the basic reasons for this. It begins by providing a framework for manufacturing competitiveness. It then outlines a handful of characteristics that seem to have been pervasive in a wide range of manufacturing competitiveness programs over the past decade. In contrast to those characteristics, it uses three quite different organizations to illustrate a very different mode for pursuing manufacturing competitiveness. Finally, the paper concludes by outlining three elements that appear to be essential in the successful pursuit of manufacturing advantage.