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.     

Developing a manufacturing vision

The concept of a manufacturing vision is introduced as a company specific, commonly shared, holistic picture of the way in which future manufacturing in the company will function. First is presented what a manufacturing vision is, and then is presented a five-step framework in which such a manufacturing vision may be developed. A manufacturing vision is regarded as a bridge between the mission, goals, and strategies of an industrial enterprise and the detailed design of a manufacturing system. Such a bridge may ensure that manufacturing is able to make a relevant strategic contribution to developing and sustaining the competitiveness of the company and may serve as a guide for innovation and integration of the various elements of a manufacturing system. The paper rests on action research projects in more than ten industrial companies, and the experiences gained are discussed in a section on issues related to the development process including experimentation without fear of losing face, participation and involvement of managers and employees, and finally the outset for a manufacturing vision. To give an example of a manufacturing vision the paper also very briefly introduces a case of a medium-sized supplier of welded parts and equipment for a number of different industries.     

Strategy and the “business portfolio”

In this article the author goes on to develop the conclusion reached in his previous article which appeared in the December edition of Long Range Planning. These conclusions concerned the requirements for strategic success for an individual business, here they are developed into their implications for strategy development in the typical multibusiness company.It is argued that relative competitive position and growth are the two fundamental parameters which must be considered in determining the strategy that an individual business should follow when viewed within the context of the company's overall ‘business portfolio’. The likely patterns of business strategy which will lead to overall corporate success are discussed and contrasted with those which can lead to disaster.The key is that strategies should be made to differ widely from business to business, as a function of the growth and relative competitive position of each business and the company's overall resource position particularly with respect to cash. The ‘across the board’ defensive measures which many companies have adopted in recent years as their response to the pressures of inflation and recession are therefore argued to be singularly inappropriate for the long term. The ‘business portfolio’ concept provides a superior approach for developing the differentiated strategic business objectives which are necessary for any company to make the most of its opportunities.     

When and with whom to cooperate? Investigating effects of cooperation stage and type on innovation capabilities and success

In times of saturated markets and decreasing product life cycles, the continuous development and successful launch of innovations are essential for profit-oriented organizations of any kind. Interorganizational cooperation enables companies to get better access to knowledge and capabilities in order to generate and successfully introduce innovations. While scientific research and management practice have acknowledged the importance of cooperation, little research effort is dedicated to empirically determine the effectiveness of cooperation intensity within different stages of the innovation process (cooperation stage) and with different partners (cooperation type). This article aims to fill these gaps by empirically examining the effects of cooperation intensity with different kinds of partners (horizontal, vertical and institutional cooperation) in different stages of new product development (concept and product development as well as implementation stage) on innovation capabilities and success of individual companies. Drawing upon a sample of 154 high-tech companies from the German B-2-B sector, our results reveal that it is in general beneficial for a company to cooperate. However, cooperation in concept and product development primarily improves a company's innovation capabilities while cooperation in the implementation stage primarily enhances innovation success of a company. With respect to cooperation type, vertical, horizontal as well as institutional cooperation significantly enhance innovation capabilities and success of a company. However, cooperation with institutional partners was found to be the most important contributor throughout all stages.     

Decision support tool for lean product and process development

Lean and concurrent engineering (CE) are widely acknowledged business process improvement strategies. These strategies can improve processes, reduce costs, and cut waste enabling organisations to remain competitive. Lean manufacturing offers an enterprise-wide methodology that improves reliability and flexibility while reducing lead-times and inventory carrying costs. Companies in manufacturing and service sectors are focusing on integrating lean manufacturing methodology with other applications, so that, all their systems and processes are aligned. This article proposes a CE framework based on application of information technology and object-oriented methodology for lean manufacturing. This approach expected to give manufacturing companies an extra edge in today's competitive market. A case study is presented in this article to demonstrate the effectiveness of CE framework in a machine tool manufacturing company. CE practice was adopted for new products, to align the systems and processes of the company. Product development lead-time was found to decrease by more than 50% compared to similar development projects carried out by the company. The need for rework was found to be negligible and the development cost was reduced considerably.     

Developing materials management

It is forecast that in the near future there may be a move towards the conscious development of materials management within manufacturing industry. This development will be based upon management recognition of the significance of materials management, combined with extensive pressure upon the costs and efficiency in the functions which make up the materials management systems. There will be a number of urgent motivating factors, ensuring that solutions are found to overcome any difficulties, and that change takes place to introduce the materials management concept. The final outcome is forecast to be an integration of the materials management function into one group; with the explicit task of, maintaining a constant flow of product, reducing costs where feasible, and improving relationships with both suppliers and other functions within the company.     

COMPUTER-INTEGRATED MANUFACTURING: A TAXONOMY OF INTEGRATION AND RESEARCH ISSUES

The past decade has seen an upsurgence in the number of manufacturing companies that are attempting to transform into computer-integrated enterprises. However, much of the computer-based integration efforts in these manufacturing organizations have been limited in scope and localized within certain areas of the organization (particularly, technology-intensive areas such as the shop floor). Such compartmentalized and myopic approaches to the development of computer-integrated manufacturing (CIM) systems undermine the ability of these systems to reach their fullest potential. CIM is much larger in scope and can impact an organization along various dimensions and at various levels. The fact that no completely integrated manufacturing enterprise has been developed to date can be attributed, in part, to a lack of understanding of the scope and implications of CIM. The purpose of this paper is, therefore, twofold. First, the paper presents a meta-schema (called TRIAD) for multidimensional and multilevel integration of a manufacturing system. Second, on the basis of the proposed meta-schema, the paper develops a taxonomical framework for defining key integration issues in CIM system design and discusses critical research needs that exist in this area. It is hoped that this paper will serve as a road map for research efforts that will enable the emergence of comprehensive CIM systems.     

Long-term Success of Adaptation Strategies: Evidence from Finnish Companies

This study analyses the success of adaptation strategies applied by Finnish companies during the recession in 1989–93. Five different strategies emerged from data gleaned from a questionnaire answered by 750 companies. In the medium term, investment in new product development and marketing and in the acquisition of new customers was the most successful strategy while a strategy heavily based on negotiating finance contracts and restructuring was the most unsuccessful. To evaluate the long-term effects of adopted strategies, financial statements from 644 companies in 1994 and 1997 were analysed. The results supported the medium-term conclusions. In general, they suggested that in the long-term, active adaptation strategies are most likely to lead to sustained success whereas passive (financial) strategies are associated with a high risk of failure.     

过程系统管理与技术的综合集成

在激烈的市场竞争中,过程企业不仅要重视技术、更要加强管理,实现全局优化运行。提高过程企业的市场竞争能力必须全面综合集成人、组织、战略管理、经营管理、过程管理及信息自动化技术等因素。本文以石化企业为背景,对过程企业面临的问题及发展趋势进行了分析,并且对过程企业管理模式、过程企业的体系结构以及过程集成与优化技术进行了探讨。     

A model for an integrated manufacturing system implementation in China: a case study

This paper describes a process which a company adopted to enhance her manufacturing system in a step-by-step manner. In order to increase the competitiveness of the company, the authors have identified a number of improvement strategies which were specific to the economic and political environment in China. The center of the strategies is a vision of an integrated manufacturing strategy. The detailed design and implementation of this vision is conducted through the proposed systematic manufacturing strategic analysis. The integration process encompasses various elements such as Total Quality Management (TQM), Manufacturing Resources Planning (MRPII) and Real-Time Monitoring System (RTMS), it emphasises not only the use of appropriate modern technology but also the management of technology change. In this paper, a concept model is used to describe the integration process, the detailed implementation is also elaborated using a proposed implementation process model. By adopting the integrated manufacturing system, and through continuing improvement, the productivity and hence the profitability of the company is increased. It is anticipated that the integrated approach to the design and implementation of manufacturing systems will be an important contribution towards the manufacturing strategy in a labour intensive environment such as China.     

制造企业服务业务扩展及其认知因素研究

制造企业的竞争越来越激烈,几乎所有的企业都要面对快速反应多变市场和应对价格压力的要求,面对越来越小的产品利润空间和越来越复杂的客户需求,本文从对工业服务管理文献分析和制造企业的调查研究入手,揭示了制造企业从纯粹的产品生产者向客户支持方案提供者发展的转移趋势.通过对瑞士和德国30多家机器和设备制造企业进行的调查研究,说明了服务业务对制造企业在开发财务、营销和战略机会上的重要作用,并对转移过程中服务业务的扩展过程进行了总结.结合具体企业实践,本文对制约制造企业扩展服务业务中在管理动机上的认知因素进行了分析和研究.结合中国加入WTO后,中国制造企业将全面融入国际竞争的背景,本文期望对中国制造企业的发展和竞争地位的提高提供理论和实践上的指导.     

Planning for physical distribution

Traditionally under-managed and poorly represented in the decision taking hierarchy, the physical distribution function of many manufacturing companies has not been strong on long range planning. With its basic input, the plans of production and marketing activities, vulnerable to a host of fluctuating outside factors, and with the present economic situation making any kind of planning extremely difficult, planning for Physical Distribution activity must be cautious yet flexible in the coming decade.     

Strategic leadership in super-growth companies—a re-appraisal

This article reports on a research project to identify the attributes of high and super growth medium-size companies, the strategies they employ to maintain growth and the critical success factors they consider vital to achieve rapid growth.

Pronounced differences were found in the preferences between both groups when ranking seven critical success factors: (1) Flexibility; (2) Product diversification; (3) Attracting and holding quality staff; (4) Niche marketing; (5) Early entry into growth markets; (6) Quality; (7) and Frequent innovation. There were also differences in their strategic objectives, as well as, in the ages of the growth companies.     

Implementation of just-in-time in a small company: A case study

This paper deals with the implementation of JIT in a small company in Taiwan that produces different kinds of automobile lamps such as rear combination lamps and front turn signal lamps. JIT systems have tremendous effects on all operations of a firm, including design, accounting, finance, marketing, distribution, etc., and thus are of interest to all levels of a firm's management. Realizing the success of JIT, large-scale manufacturing companies all over the world have implemented JIT in their production systems with the objective of improving their competitiveness. Nevertheless, small and medium enterprises SMEs play a major role in the national economy. However, JIT has not received serious attention from SMEs. Realising the importance of improving the performance of SMEs, a case study is presented to motivate practitioners to implement JIT in their SMEs. In addition, future research directions in the areas of implementing JIT in SMEs are presented.     

Visualizing the factory through meta- manufacturing processes

Milestone or deadline driven production management is predominant in most manufacturing companies. Problems and other disturbing occurrences tend to see their first daylight during phases where plans are implemented into reality, for example, when production commences, prototypes enter manufacturing and deliveries are expected. Conventional control routines fail to depict the true progress and procedures of the company on an on-line basis, which means that instead of being proactive they serve as means to react to already existing problems. This paper studies the application of advanced visualization techniques to the already existing information embedded in a comany's information infrastructure, and how it can help management to anticipate probable near future pitfalls. By studying those daily operations of a company which share a document relationship with the true manufacturing process, that is, the meta-manufacturing processes, a completely new perspective on the company's value-adding activities is drawn. By mining the existing data reservoirs of a company traditionally difficult management processes, such as product development, vendor integration, production planning, can be analysed and the problems identified in a novel way to react in advance. The paper displays several empirical examples from bulk to one-of-a-kind production where the method has been successfully implemented.     

Implementation of S-DBR in four manufacturing SMEs: a research case study

Production planning and control systems (PPCs) are tools that have a major effect on the performance of manufacturing companies. An inappropriate determination of the applicability of PPCs could seriously jeopardise the ability to achieve competitive priorities. This mistake can be expensive for any company, but proper implementation is particularly critical for small and medium enterprises (SMEs), which are characterised by limited access to financial resources. Simplified Drum–Buffer–Rope (S-DBR) is a PPC control approach that is characterised by minimum detail in the planning stage and a primary emphasis on the control of execution. Therefore, this approach is a suitable choice for the highly variable context of SMEs. This study aims to explore the practical issues related to S-DBR implementation in four Ecuadorian SMEs through case study research. The case analysis within this study first identifies the choices made in the implementation process design within the four companies according to process and product characteristics. We then conduct a cross-case analysis to explore the effects of the S-DBR implementation process designs on a group of performance measures. Our research findings provide new insights into the S-DBR implementation process in the context of SMEs, and the effects of this approach on performance measures.     

Managing international business operations in a changing institutional context: The case of the St. Petersburg hotel industry

This article advances the institutional view of business strategy by analyzing the post-socialist institutional transition in Russia and its implications for business strategies in the St. Petersburg hotel industry. The development of the institutional context is divided into three periods: socialist, early transition and late transition. The strategies of foreign hotel enterprises characteristic of each period are investigated with respect to entry/ownership mode, product, supply and human resource management strategies, and sales and marketing. The study is based on 24 semi-structured interviews with hotel managers, and a variety of local archival sources.The analysis shows how tightly companies are integrated with the formal and informal macro- and industry-level institutional context of Russia. In the case of the hotel industry, the impact of the change in the institutional context from a centrally planned to a market economy centers on the connections of the hotel enterprise with public and private sector actors. Here, empirical analysis shows that first, the degree of integration varied between the three time periods examined, second, many relevant institutional effects are observed at industry level, and third, foreign and local enterprises differ especially during the period of rapid institutional change.     

Customer Behavior in an Online Ordering Application: A Decision Scoring Model*

This research presents the development of behavioral scoring models to predict future customer purchases in an online ordering application. Internet retailing lowers many barriers for customers switching between retailers for repeat purchases; thus, retaining existing customers is a key challenge for achieving profitability. Survey data were collected from 1,089 online customers of two companies. The subjective survey data were then used to predict purchases over the ensuing 12 months based on data from the company databases. The analysis illustrates the general applicability of predictive models of future customer purchases while also demonstrating the need to develop specific models tailored for an individual company's operating and marketing environment. The models provide insight on how companies can target marketing dollars more effectively and allocate investment across multiple operational areas for maximum return. The research answers a call for rigorous research in the area of predictive marketing, an area in which many companies are excelling but where there is a scarcity of detailed knowledge regarding application of such models.     

Priority class scheduling: Production scheduling for multi-objective environments

A new scheduling framework (priority class scheduling) is devised which reduces the conflict in the manufacturingmarketing interface. Priority class scheduling rewards manufacturing for making small improvements in efficiency, involves marketing in the setting of production priorities, improves customer service by putting in place realistic production timetables, allows manufacturing to concentrate on improving both quality and efficiency, and improves both the communication and cooperation between the shop floor, the production scheduler, marketing, and customer service. Within a production period, all jobs are classified into priority classes based on both their due dates and importance. Production is scheduled within each production period to maximize throughput subject to the priority class constraints- if any job in priority class i is started in the production period, then all jobs in priority class i - 1 must be completed within the production periods.     

Nurturing clients’ trust to encourage engagement success during the customization of ERP systems

Customization is a crucial, lengthy, and costly aspect in the successful implementation of ERP systems, and has, accordingly, become a major specialty of many vendors and consulting companies. This study examines how such companies can increase their clients’ perception of engagement success through increased client trust that is brought about through responsive and dependable customization.Survey data from ERP customization clients show that, as hypothesized, clients’ trust influenced their perception of engagement success with the company. The data also show that clients’ trust in the customization company was increased when the company behaved in accordance with client expectations by being responsive, and decreased when the company behaved in a manner that contradicted these expectations by not being dependable. Responses to an open-ended question addendum attached to the survey corroborated the importance of responsiveness and dependability. Implications for customization companies and research on trust are discussed.