Accounting, strategy and AMT investment

One strand in the current debate on AMT investment emphasises technical aspects of investment appraisal. Another calls for a broader focus on wider decision-making processes and strategic considerations. This paper seeks to merge both sets of concerns. It uses two empirical studies of AMT decisions in a number of companies. The first demonstrates specific linkages between manufacturing strategies and financial justifications. The second explores ways in which connections between finance and strategy are constructed and how they are understood and evaluated by decision-makers. We conclude that AMT proposals succeed by linking accounting information to strategic considerations throughout the investment decision process.     

Information Systems Adaptation and the Successful Implementation of Advanced Manufacturing Technologies*

Few plants have initial success with advanced manufacturing technologies (AMTs), and adaptations are commonly required after installing new technologies. We especially know little about the outcomes of adaptations that manufacturers regularly employ in the context of AMTs. Sociotechnical theory and the technology literature suggest that AMTs commonly require four types of adaptations including those to process technologies, human resources, operational structures, and information systems. This study investigates which of these four adaptations and their interactions lead to improved operational performance. Data were collected on 104 plants that implemented a single type of manufacturing AMT. Findings indicate that information systems (IS) adaptation during the course of AMT implementation was the most important action. Surprisingly, human resource and process technology adaptations were linked to lower performance, and no interactions had any clear effects. The results also show that practitioners underestimated the relevance of IS adaptations during contemporary or “second-generation” AMT implementation projects and overemphasized the need for shop floor changes.     

The diffusion of advanced manufacturing technology in multiplant,multidivisional corporations

This study examines several factors which act as significant predictors of successful intra-firm advanced manufacturing technology (AMT) diffusion. Our findings suggest that the following factors positively impact the diffusion process: previously successful AMT implementations, advanced manufacturing centers, AMT workshops, informal networks, simultaneous R&D of products and processes, and the significance of the impact of AMT on operating performance. One factor—cost and time overruns with previous implementation projects—emerged as a deterrent to successful AMT diffusion. Our results also indicate that the use of an outside consultant as a major source of transfer expertise significantly contributes to AMT diffusion success.     

Innovation and Organizational Learning: the Case of Computer-Aided Production Management

Recent experience of unsuccessful implementation of integrated advanced manufacturing technology suggests that much of the problem is due to a lack of innovation in organizational in parallel with the technological dimension. Discussion of this issue argues the need for some kind of ‘organizational learning’ to obtain the full benefits of AMT. This paper reviews the topic of organizational learning in technology and explores its relevance to the problem of AMT implementation through the case example of computer-aided production management systems.     

An empirical investigation of advanced manufacturing technology investment patterns: Evidence from a developing country

Advanced manufacturing technology (AMT) investment patterns in developing countries is in need of further investigation, particularly in the light of the conflicting evidence from the literature. This paper provides new evidence on AMT investment patterns from the Turkish automotive industry and develops a taxonomy by exploring the relationships between AMT investment patterns, ownership structure, firm size and performance. Analysis of industry survey data suggests the existence of three groups with different AMT investment strategies. Results suggest that AMT investment patterns are not only significantly correlated with firm performance or ownership, but also reveals significant differences in manufacturing performance across investment patterns.     

Joint modified block replacement and production/inventory control policy for a failure-prone manufacturing cell

This paper considers a joint preventive maintenance (PM) and production/inventory control policy of an unreliable single machine, mono-product manufacturing cell with stochastic non-negligible corrective and preventive delays. The production/inventory control policy, which is based on the hedging point policy (HPP), consists in building and maintaining a safety stock of finished products in order to respond to demand and to avoid shortages during maintenance actions. Without considering the impact of preventive and corrective actions on the overall performance of the production system, most authors working in the reliability and maintainability domains confirm that the age-based preventive maintenance policy (ARP) outperforms the classical block-replacement policy (BRP). In order to reduce wastage incurred by the classical BRP, we consider a modified block replacement policy (MBRP), which consists in canceling a preventive maintenance action if the time elapsed since the last maintenance action exceeds a specified time threshold. The main objective of this paper is to determine the joint optimal policy that minimizes the overall cost, which is composed of corrective and preventive maintenance costs as well as inventory holding and backlog costs. A simulation model mimicking the dynamic and stochastic behavior of the manufacturing cell, based on more realistic considerations of the real behavior of industrial manufacturing cells, is proposed. Based on simulation results, the joint optimal MBRP/HPP parameters are obtained through a numerical approach that combines design of experiment, analysis of variance and response surface methodologies. The joint optimal MBRP/HPP policy is compared to classical joint ARP/HPP and BRP/HPP optimal policies, and the results show that the proposed MBRP/HPP outperforms the latter. Sensitivity analyses are also carried out in order to confirm the superiority of the proposed MBRP/HPP, and it is observed that for practitioners, the proposed joint MBRP/HPP offers not only cost savings, but is also easy to manage, as compared to the ARP/HPP policy.     

Patterns of Advanced Manufacturing Technology Utilization and Manufacturing Capabilities

The objectives of this research are first to empirically replicate Advanced Manufacturing Technology (AMT) utilization taxonomies identified in foregoing research, second to investigate the relationship between patterns of AMT utilization and manufacturing capabilities attainment, and third to explore differences in context, and performance across AMT groups. Theories of performance frontiers and capability progression provide the basis for our hypotheses. Data were collected from 224 U.S. manufacturing plants in industries considered to have potential utilizations of AMTs. A cluster analysis of the data yields a solution that closely resembles a previous AMT utilization taxonomy, including four groups labeled, respectively, as Traditionalists, Generalists, High Investors, and Designers. Significant manufacturing capability differences across these four groups indicate that plants that utilize a broader scope of AMTs enjoy a greater breadth of manufacturing capabilities. The implied capability attainment pattern is consistent with cumulative capability theory. However, the results suggest that cost capability is not included in the capability mix when broad‐based AMT utilization is the enabler of capability gains. A post hoc exploration of the AMT groups indicates significant differences in performance across the groups. Collectively, the results extend prior research by providing added insights into the possible rationale and impact of AMT utilization patterns.     

Learning curve analysis in total productive maintenance

The continuous improvement concepts such as total quality management, just-in-time and total productive maintenance have been widely recognized as a strategic weapon and successfully implemented in many organizations. In this paper, we focus on the application of total productive maintenance (TPM). A random effect non-linear regression model called the Time Constant Model was used to formulate a prediction model for the learning rate in terms of company size, sales, ISO 9000 certification and TPM award year. A two-stage analysis was employed to estimate the parameters. Using the approach of this study, one can determine the appropriate time for checking the performance of implementing total productive maintenance. By comparing the expected overall equipment effectiveness (OEE), one can improve the maintenance policy and monitor the progress of OEE.     

TPM: PLANNED AND AUTONOMOUS MAINTENANCE: BRIDGING THE GAP BETWEEN PRACTICE AND RESEARCH

Competitive pressures and changing production management paradigms have, in recent years, increased the importance of reliable and consistent production equipment. Initially, the Japanese, and now others, have espoused the virtues of a management philosophy known as total productive maintenance (TPM). We are interested in the maintenance-investment decisions for TPM. This paper (1) describes the basic elements of TPM programs, (2) categorizes the relevant research literature using a practitioner's framework for autonomous and planned maintenance activities, and (3) identifies the current gaps between practitioner needs and academic research in the area of TPM and offers suggestions to close the gaps.     

Labour Market Flexibility,Human Resource Management and Corporate Performance

Labour market flexibility is often portrayed as a key to the competitive success of the UK and US economies. We surveyed several hundred firms in the UK, and using the resulting data (on over 200 manufacturing firms) this paper investigates the relationships between firms’ use of flexible work practices, human resource systems and industrial relations on the one hand, and corporate performance on the other hand. The results suggest that ‘low‐road’ practices – short‐term contracts, a lack of employer commitment to job security, low levels of training and low levels of human resource sophistication – are negatively correlated with corporate performance. In contrast, it is found that ‘high‐road’ work practices –‘high commitment’ organizations or ‘transformed’ workplaces – are positively correlated with good corporate performance. It is also found that human resource management practices are more likely to contribute to competitive success where they are introduced as a comprehensive package, or ‘bundle’ of practices. Significant interaction effects between human resource systems, trade unions and flexible work practices add further support to the bundling hypothesis.     

Improving supply chain responsiveness through Advanced Manufacturing Technology: the mediating role of internal and external integration

Abstract

Responsiveness is one of the key performance factors that firms need to face up to the challenges posed by today’s markets. Many manufacturing firms are investing in advanced manufacturing technology (AMT) with a view to improving competitiveness. However, empirical evidence shows that investments in AMT alone do not lead to improvements in performance. In this study, a model that links AMT implementation and responsiveness through internal integration and external integration is proposed. A sample of 441 Spanish industrial companies was used to test the model through structural equation modelling. The findings highlight that internal integration needs to be supplemented with external integration in order to ensure that the implementation of AMT will result in improved responsiveness. Supply chain managers should focus on integration within the supply chain – firstly internal and later external – to obtain returns on investments in AMT in the form of improved flexibility and more reliable and faster deliveries.     

Quality management and performance: a comparison between the UK and Turkey

Purpose: The aim of this article is to detail the correlation between quality management, specifically its tools and critical success factors, and performance in terms of primary operational and secondary organisational performances.

Design/methodology/approach: Survey data from the UK and Turkey were analysed using exploratory factor analyses, structural equation modelling and regression analysis.

Findings: The results show that quality management has a significant and positive impact on both primary and secondary performances; that Turkish and UK attitudes to quality management are similar; and that quality management is widely practised in manufacturing and service industries but has more statistical emphasis in the manufacturing sector. The main challenge for making quality management practice more effective lies in an appropriate balanced use of the different sorts of the tools and critical success factors.

Originality/value: This study takes a novel approach by: (i) exploring the relationship between primary operational and secondary organisational performances, (ii) using service and manufacturing data and (iii) making a cross-country comparison between the UK (a developed economy) and Turkey (a developing economy).

Limitations: Detailed contrast provided between only two countries.     

Design,reliability and validity of a computer ageing simulation technique

Details are given of a Computer Ageing Simulation Technique (CAST) which was developed for a large UK multinational company to diagnose age-related performance problems in its workforce. The technique involved a manpower simulation of 4295 people at a manufacturing plant over a ten year projection period, from 1981 to 1991. Reliability and validity were checked after a two year period, and found to be significant. The paper focusses on the design principles of a strategic human resource planning system, the benefits of using social and economic data to predict supply and demand for labour, and the importance of reliability and validity. It is concluded that CAST represents a valuable management tool. Age-related problems can be strategically assessed, and the effectiveness of a number of human resource flow policies tested out.     

Risk analysis of estimates for cost of quality in supply chain: a case study

Risk analysis for Cost of Quality (CoQ) in supply chain has not been adequately researched as evidenced in the literature. This paper attempts to analyse risk involved in estimating elements of CoQ in the internal supply chain of an integrated aluminium manufacturing company. We have applied grounded theory methodology on accounting codes of the case company primarily to bring out various elements of CoQ in its internal supply chain. They are categorized as ‘cost of prevention’, ‘cost of defective inputs’, ‘cost of defect in process’, and ‘cost of defect in output’. These elements are considered to be risky due to availability of partial information in past records of accounts while applying grounded theory methodology. In order to estimate the range and probabilities of all possible outcomes of various categories CoQ in the supply chain, Monte Carlo simulation has been used. The results have facilitated decision makers in strategic total quality management.     

The Effects of Organizational Culture, Structure and Market Expectations on Technological Innovation: A Hypothesis

This paper is chiefly concerned with the causes and technological effects of ‘short-term pressures’ on and in large firms in British manufacturing. ‘Short-term pressures’ (STP) are defined as factors acting upon (or within) an organization which tend to cause decision-makers (explicitly or implicitly): (a) to raise their time rate of discount; and/or (b) to foreshorten the time horizon beyond which future revenues are ignored altogether. Such pressures will tend to reduce the rate of investment (defined very broadly as present sacrifice of cash flow for future gain), and/or bias it towards ‘short-term’ projects. In the British context such pressures upon firms arise from the nature of the relationship with shareholders. (High interest rates and low profitability have similar effects but should be analysed separately.) STP can also be generated and/or transmitted within organizations. STP acting within an organization are likely to be associated with pressures on middle and lower management to take a narrow, ‘sectional’ view, avoiding efforts and expenditures whose benefits may go largely to other parts of the firm. The first section sets out a theoretical framework within which to predict the intensity of external STP, and uses this to assess their likely incidence. After defining and discussing the concept of culture in organizations, it is argued that culture dominates structure at higher levels, and the reverse at lower levels. The second section deals with internal STP, and shows how performance pressures on managers at various levels are determined by the interaction of structural and cultural factors. Structural factors considered include organizational configurations and methods of auditing and management accounting. Internal performance pressures may at various levels be quite different from the external pressures. The third section shows how, by contrast with economic rationality, STP may affect technological progress - distinguishing between process change, which under certain circumstances may actually be stimulated, and product change, which is likely to be seriously inhibited. (It is pointed out that the impact of any set of performance pressures must be evaluated by comparison with an alternative set, which may themselves not be ideal.) At each stage the analysis is differentiated to allow for the differing circumstances of the UK electronics, Pharmaceuticals and mechanical engineering industries, building up a hypothesis as to the differing incidence of STP among them. This hypothesis can account for the very different record of these UK industries in innovation.     

Release of maintenance jobs in a decentralized multi-stage production/maintenance system with continuous condition monitoring

Condition-based maintenance is analyzed for multi-stage production with a separate maintenance department. It is assumed that the conditions of the machines deteriorate as a function of multiple production parameters and that the task of maintenance is to keep up predefined operational availabilities of the individual machines. In this context the problem of determining the optimal machine condition that triggers the release of a preventive maintenance job and the problem of scheduling maintenance jobs at the maintenance department arise. Existing approaches to solve these problems either assume a monolithic production/maintenance system or concentrate on a decentralized system in which the information flow and resource transfer do not cause delays. With our paper we aim at (1) deriving a triggering mechanism that is able to cope with relaxed assumptions and at (2) developing specific priority rules for scheduling maintenance jobs. Therefore, in this paper a specific continuous condition monitoring and a suitable information exchange protocol are developed, factors determining the release situation are operationalized, impacts of choosing the triggering conditions are identified and the components of specific priority rules for scheduling maintenance jobs are clearly elaborated. Finally the performance of the resulting solution approach is analyzed by simulations. Thereby, relevant characteristics of the production/maintenance system, the maintenance task and relevant priority rules are varied systematically. This research contributes answers to the questions on how the exchange of local information can be structured, the parameters of condition-based maintenance can be set and on what maintenance-specific priority rules can be applied in case of incomplete information about deterioration in a decentralized multistage production/maintenance system.     

Regulations,policies and practices concerning work stress in five European countries

Abstract

A comparative inventory of regulations, policies and practices in The Netherlands, Sweden, UK, Germany and France with regard to the prevention of work stress was carried out. In each country data were collected by means of interviews with key informants and through exploring relevant documents and literature. It was found that Sweden, The Netherlands and the UK—those countries with framework legislation in the field of health and safety—recognize stress as an important health and safety topic, whereas Germany and France do not yet recognize stress as an important policy issue. However, even in the first group of countries less attention is being paid towards psychosocial work characteristics when compared with traditional health and safety issues, such as noise, machine safety and toxic agents. There is a clear lack of well-documented (national) ‘examples of good preventive practice’, even in Sweden and The Netherlands. Recommendations are being formulated concerning type of legislation, guidance and information, monitoring and risk assessment, costs and benefits, examples of good practice and European networking.     

A multiple goal methodology for evaluating management information systems

The behavior and performance of an organization are intimately tied to the mode and effectiveness of its information processing function. While there is a rapidly expanding level of research concerned with the design, development, and implementation of management information systems (MIS), relatively few approaches to the evaluation and improvement of these systems have been suggested. The current paper develops a multiple goal methodology aimed at filling this gap by evaluating and, if necessary, subsequently modifying any given set of MIS design variables considered capable of enhancing a series of operational and, perhaps, conflicting goals. The methodology is based on a series of significant findings from the MIS design literature. In particular, the procedure incorporates the tripartite of decision type/decision-maker/MIS design into the evaluation process. The methodology is user-based, being flexible with respect to the definition of performance objectives, evaluation measures, design variables, and correction strategies. A brief example applies the methodology to the evaluation of an MIS within a health services organization.     

精益生产组成要素之间的关系研究

基于资源基础理论探讨精益生产组成要素之间的关系,并以华南地区118家制造企业为研究样本进行实证研究。研究结果表明:员工参与正向影响TQM/TPM,但对JIT的实施并没有直接的影响,需要通过TQM/TPM间接影响;TQM正向影响TPM的实施;TQM、TPM正向影响JIT,且TQM通过TPM间接影响JIT。研究结论对精益生产的相关理论和实践都有重要的价值和意义。