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.     

EXPLAINING PLANT-LEVEL DIFFERENCES IN MANUFACTURING OVERHEAD: STRUCTURAL AND EXECUTIONAL COST DRIVERS IN THE WORLD AUTO INDUSTRY

Using data from 62 automobile assembly plants worldwide, we examine the extent to which various structural cost drivers (plant scale, automation, and product mix complexity) and exe-cutionalcost drivers (product manufacturability, management policies, and production practices) account for plant-level differences in manufacturing overhead. Our analysis of structural drivers finds that overhead hours per vehicle are negatively associated with production volumes, consistent with economies of scale in overhead functions. However, automation appears to have little influence on overhead levels. Product mix complexity's effect on overhead requirements varies with the complexity's form and the plant's manufacturing capabilities. Option and parts complexity (measures of peripheral and intermediate product variety) both exhibit adverse effects on overhead, reflecting the considerable logistical, coordination, and supervisory challenges that accompany an increased number of parts and more complex manufacturing tasks. In contrast, model mix complexity (a measure of fundamental variety) appears to have little impact on direct or overhead labor requirements in auto assembly plants. Our analysis of executional drivers provides empirical support for the claim that advanced manufacturing practices such as the reduction of buffers, multiskilled production workers, and the use of teams can lower overhead costs. We also find preliminary evidence that the lower overhead costs in Japanese auto assembly plants are due primarily to the use of multiskilled work teams and the shifting of traditional overhead activities to production workers. Overall, our results indicate that manufacturing overhead is a function not only of the structural cost drivers that have dominated the academic literature but also of executional cost drivers that are harder to duplicate and therefore potentially more valuable for achieving competitive advantage.     

Alternate Routing Strategies in Batch Manufacturing: An Evaluation

Batch manufacturing firms are experiencing significant changes because of technological developments in work center design, such as flexible manufacturing systems (FMS) and planning/control tools like computer-aided process planning (CAPP). These new developments provide production managers with some solutions to a number of complex problems. For example, numerical-controlled (NC) machine center installations are effective in providing quality parts because of tight tolerance specifications built into the equipment. However, these highly efficient centers create bottlenecks that constrain shop throughput, since production planners tend to rely too much on them. To help improve manufacturing planning, we introduce an important element to the batch production scheduling component of CAPP's mission—evaluating possible alternate routes. Production scheduling encompasses job route selection as well as machine center assignment (loading), job releasing, and setting due dates. In this paper, three routing strategies requiring different levels of shop floor information are tested and evaluated using computer simulation. Shop performance is measured by total cost and traditional measures of job flow time, lateness, and tardiness.     

MEASURING FACTORY FOCUS: AN EMPIRICAL STUDY

Focus in the manufacturing plant is generally deemed to be an important element of success in manufacturing strategy. Yet, little work has been completed in the measurement of plant focus and a dearth of empirical evidence exists to support the broad popularity of this concept. This paper presents a plant focus measurement approach and reports the results of a field study that uses a site visit research design to apply the focus measure to a multi-industry sample of manufacturing plants. Regression analysis is used to study the relationships between the plant focus variable and the environmental variables of plant size, number of product lines, plant age, number of processes, and type of processes. Although highly intuitive, these relationships have undergone very little empirical study in the literature. Our study provides evidence of a strong logarithmic relationship between our plant focus measure and the number of product lines. Support is also demonstrated in that our measure of plant focus is linked to the number and type of manufacturing processes. However, the variables of plant age and plant size do not appear related to the plant focus measure. The literature-based multicriteria focus measure can be used by managers and researchers as an objective, formal, and generalizable approach for assessing plant focus, for identifying areas in the plant that detract from focus, and for tracking focus improvement efforts over time.     

Design of Stockless Production Systems

In make‐to‐stock production systems finished goods are produced in anticipation of demand. By contrast, in stockless production systems finished goods are not produced until demand is observed. In this study we investigate the problem of designing a multi‐item manufacturing system, where there is both demand‐ and production‐related uncertainty, so that stockless operation will be optimal for all items. For the problem of interest, we focus on gaining an understanding of the effect of two design variables: (i) manufacturing speed—measured by the average manufacturing rate or, equivalently, the average unit manufacturing time, and (ii) manufacturing consistency—measured by the variation in unit manufacturing times. We establish conditions on these two variables that decision makers can use to design stockless production systems. Managerial implications of the conditions are also discussed.     

Managing Electricity Peak Loads in Make‐To‐Stock Manufacturing Lines

In this article, we study the control of stochastic make‐to‐stock manufacturing lines in the presence of electricity costs. Electricity costs are difficult to manage because unit costs increase with the total load, that is, the amount of electricity needed by the manufacturing line at a certain point in time. We demonstrate that standard methods for controlling manufacturing lines cannot be used and that standard analytic results for stochastic manufacturing lines do not hold in the presence of electricity costs. We develop a control policy that balances electricity costs with inventory holding and backorder costs. We derive closed‐form expressions and analytic properties of the expected total cost for manufacturing lines with two workstations and demonstrate the accuracy and robustness of the policy for manufacturing lines with more than two workstations. The results indicate that avoiding electricity peak loads requires additional investment in manufacturing capacity and higher inventory and backorder costs. Our approach also applies to companies which aim at reducing their carbon emissions in addition to their operating costs.     

The Influence of Cost and Quality Priorities on the Propensity to Outsource Production*

Outsourcing of production has escalated over the past decade due to unprecedented competition and worldwide access to low‐cost labor markets. This article examines how cost and quality priorities—two key attributes of manufacturing strategy—influence a manufacturer's propensity to outsource. By doing so, we bridge the existing gap between research on manufacturing strategy and firm boundaries. We develop a theory‐based model that links a manufacturer's cost and quality priorities to its plans to outsource production. Our empirical analyses, based on survey data obtained from 867 manufacturing business units, control for firm‐specific factors previously shown to impact outsourcing, including asset specificity, uncertainty, and current capabilities in cost and quality. We found that the competitive priority placed on cost played an integral role in sourcing decisions, while, surprisingly, conformance quality priorities did not. The cost result is consistent with our expectations and observations in practice. The significant effect of cost priority on outsourcing shows that any theory of firm boundaries that fails to consider competitive priorities is incomplete. The finding regarding quality, which was counter to our expectations, may partially explain why there is an emergence of so many nonconforming products associated with outsourcing. Taken together, our results provide theoretical insights for future research into how manufacturing managers can improve their decision making on outsourcing production.     

It's Only Temporary: Time Frame and the Dynamics of Creative Project Teams

The success of many knowledge‐intensive industries depends on creative projects that lie at the heart of their logic of production. The temporality of such projects, however, is an issue that is insufficiently understood. To address this, we study the perceived time frame of teams that work on creative projects and its effects on project dynamics. An experiment with 267 managers assigned to creative project teams with varying time frames demonstrates that, compared to creative project teams with a relatively longer time frame, project teams with a shorter time frame focus more on the immediate present, are less immersed in their task and utilize a more heuristic mode of information processing. Furthermore, we find that time frame moderates the negative effect of team conflict on team cohesion. These results are consistent with our theory that the temporary nature of creative projects shapes different time frames among project participants, and that it is this time frame that is an important predictor of task and team processes.     

Manufacturing in the Nineties By H.J. STRUDEL and P.DESRUELLE(Van Nostrand Reinhold,New York, 1992). £31.50.

Abstract

Looking for a world model for the manufacturing information flow diagram has brought us to the conclusion that it is impossible to build an all-encompassing, all-inclusive system. The redundancy and overlap would make the system excessively complex and ineffective. The best way to generalize a model of this type is to simplify. The result is that we eliminate nearly the entire production control mechanism that is found in the labour intensive MRP system (Fig. 1). We come up with a system that is much closer to the material intensive JIT system (Fig. 2). The conclusion is that effective production control requires that you choose which resource you wish to optimize, and then select a system that controls the plant around the selected resource base. This is the function of books like International Management and Production. A second conclusion would be that complexity (MRP—Fig. 1) gains very little over simplicity (JIT—Fig. 2 or World Model—Fig. 4) in productivity or efficiency. As Shozo Hibino says in his book Breakthrough Thinking, we need to run our plants smarter, not harder.     

An Analysis of Dual‐Kanban Just‐In‐Time Systems in a Non‐Repetitive Environment

Recent advances in approaches and production technologies for the production of goods and services have made just‐in‐time (JIT) a strong alternative for use in intermittent and small batch production systems, especially when time‐based competition is the norm and a low inventory is a must. However, the conventional JIT system is designed for mass production with a stable master production schedule. This paper suggests supplementing the information provided by production kanbans with information about customer waiting lines to be used by operators to schedule production in each work‐station of intermittent and small batch production systems. This paper uses simulation to analyze the effect of four scheduling policy variables—number of kanbans, length of the withdrawal cycle, information about customer waiting lines, and priority rules on two performance measures—customer wait‐time and inventory. The results show that using information about customer waiting lines reduces customer wait‐time by about 30% while also reducing inventory by about 2%. In addition, the effect of information about customer waiting lines overshadows the effect of priority rules on customer wait‐time and inventory.     

Mind the gap: The role of leadership in multiteam system collective cognition

The increasing prevalence of team-based organizations places a premium on leadership that will “mind the gap” and enable smooth synchronization of activities across multiple distinct teams. Prior work shows that leaders can be trained to directly facilitate between-team coordination processes. Yet, relatively little is known about the intervening psychological mechanisms that enable between-team coordination. Here, we advance multiteam-interaction mental models—cognitive structures containing knowledge of appropriate between-team activities—as one mechanism that facilitates coordination among multiple teams. We use leader and team cognition data gathered in DeChurch and Marks' (2006) MTS study to test these ideas. Results reveal leaders' multiteam-interaction mental model accuracy “transfers” to teams through strategic communication, and leader strategic communication enables between-team coordination by promoting accuracy in followers' mental models. This study highlights the importance of leadership for developing collective cognition that allows teams to “scale up” from small stand-alone teams to larger and more complex systems.     

EXCELLENCE AT ROHM AND HAAS KENTUCKY: A CASE STUDY OF WORK-TEAM INTRODUCTION IN MANUFACTURING

Over the past few years we have witnessed a sharp decline in the domestic and international market share of U.S. manufacturing organizations. The decline in U.S. manufacturing has provided an avalanche of criticism and attention in the literature and popular press. Recently, however, several organizations have implemented new work-force management policies to reverse the decline. We describe the case of Rohm and Haas Kentucky, Incorporated, a plant that has implemented work teams. The outcomes of these innovations include a decline in worker grievances and turnover, an improvement in the safety record of the plant, as well as an increase in productivity.     

Planning and Control in Multi-Cell Manufacturing

This research compares Material Requirements Planning (MRP), Kanban, and Period Batch Control (PBC) as alternative approaches to the planning and control of multi-cell manufacturing involving flow cells and assembly. Since previous research on performance of these systems in cellular manufacturing has been primarily conceptual, the experiments reported here provide new insights into their comparative performance. The results show that the production environment is a major factor in system choice. Three operating factors—Master Production Schedule (MPS) volume variation, MPS mix variation, and setup time/lot size—clearly affect system choice. All systems performed well under Justin-Time (JIT) conditions; there was no advantage to Kanban. Under the mixed conditions of high MPS variation, but small setup time/lot sizes, PBC produced superior performance compared to Kanban and MRP. Under non-JIT conditions, MRP was seen as clearly more effective. Finally, the results indicate that when conditions permit very small lot sizes relative to requirements, Kanban may perform best, even when MPS variation is high.     

12 HRM and Distributed Work

Abstract

The phenomenon of managing work that is distributed over geographical distance is not new but is increasing in both frequency and intentionality as a function of globalization and knowledge-centric strategies. I review the literature on geographically distributed work, both that which highlights liabilities of loss of proximity and more recent research that emphasizes “virtual teams” as an intentional organizing device. I explore the adaptations, remedies, and countervailing strategies deployed to support such teams, contrasting those that minimize distance with those that increase individual and group capacity for coping with distance. I also emphasize that other dimensions of distance—cultural, administrative, and economic—affect the organization of work, the experiences of those doing the work, and individual and organizational outcomes. Here I highlight the “blended workforce” in which standard (traditional employees) and nonstandard (temporary and contract) workers are organized to accomplish interdependent tasks—and again contrast problems of distance with emergent adaptations. Finally, I explore the implications for human resource management (HRM), first considering which HR systems are best suited to work distributed over different types of distance, and then reviewing literature on specific HR practices—selection, training, task/job design, compensation, and performance appraisal. I close by arguing that HRM research must reach beyond its past focus on managing employees within a single firm over a prolonged career under collocated conditions. As the world generates countless new distance-related phenomena, our research must tackle the challenges of managing both standard and non-standard workers engaged in interdependent tasks of limited duration across multiple employers/clients and involving multiple dimensions of distance.     

A THREE-PHASE APPROACH TO INSTILLING A CONTINUOUS LEARNING CULTURE IN MANUFACTURING EDUCATION AND TRAINING

We describe a “learn-by-doing” approach that involves the following three phases designed in part to integrate management and engineering curricula and instill a continuous learning philosophy: (1) involve cross-functional teams as “process and business owners” in a replica of a real-life manufacturing/design problem (Do), (2) require teams to not only learn by doing but to then apply or implement what they have learned in phase 1 (Apply), and (3) share best practices and knowledge gained with subsequent participants (Document). These last two phases are essential and potentially the most valuable but are often ignored in the learning process. They can be accomplished either manually or through the use of an electronic bookshelf (e.g., company or school intranet), which is a database system used to collect and store templates of best practices, collective wisdom, and related information associated with learning and operational activities. We describe two of several educational packages we have developed and discuss their impact on our teaching, our students, and practitioners.     

Performance Impacts of Strategy,Information Technology Applications,and Business Process Outsourcing in U.S. Manufacturing Plants

This paper develops a conceptual model to study the role of outsourcing strategies and plant‐level information technology (IT) application infrastructure in the outsourcing of production and support business processes, as well as their subsequent impact on overall plant performance. We validate this model empirically using cross‐sectional survey data from U.S. manufacturing plants. We find that some IT applications are more effective at enabling the outsourcing of business processes than others. For example, the implementation of enterprise management systems is associated with the outsourcing of both production and support processes, whereas operations management systems are not associated with the outsourcing of plant processes. Plants with a low‐cost outsourcing strategy are more likely to outsource support processes than plants with a competency‐focused outsourcing strategy. However, both cost‐ and competency‐based strategies have a positive and similar impact on the outsourcing of production processes. In terms of implications for plant performance, our findings indicate that the outsourcing of production and support processes is associated with higher gross margins. Although plant IT infrastructure is positively associated with favorable on‐time delivery rates, there is no positive association between the incidence of plant outsourcing and on‐time delivery rates. These results have implications for crafting plant‐level outsourcing strategies and for investments in IT systems to facilitate the outsourcing of business processes for enhanced plant performance.     

Managing key interfaces in production planning and control

Detailed observational research, undertaken in two large and complex manufacturing businesses, identified ways in which work groups interface to employ knowledge to perform production planning and control activities. Eleven interfaces were observed and methods were established to classify them into types based on how knowledge is communicated and shared. Characteristics of the decision-making environment on either side of each interface were identified to explore their impact on interface type. Key differences in decision-makers’ predominant modes of decision-making, their agendas, and the form and scope of their knowledge were found to influence communication and decision-making processes. These findings have implications for production planning and control organisation and process design. In particular, it is seen that the effectiveness of interfaces may be improved through the alignment of decision-making approaches, agendas and knowledge across interfaces and/or through the effective use of interface tools that enable decision-makers to understand the consequences of decisions made.     

Big Data‐Savvy Teams’ Skills,Big Data‐Driven Actions and Business Performance

Prior studies on big data analytics have emphasized the importance of specific big data skills and capabilities for organizational success; however, they have largely neglected to investigate the use of cross‐functional teams’ skills and links to the role played by relevant data‐driven actions and business performance. Drawing on the resource‐based view (RBV) of the firm and on unique data collected from 240 big data experts working in global agrifood networks, we examine the links between the use of big data‐savvy (BDS) teams’ skills, big data‐driven (BDD) actions and business performance. BDS teams depend on multi‐disciplinary skills (e.g. computing, mathematics, statistics, machine learning and business domain knowledge) that help them turn their traditional business operations into modern data‐driven insights (e.g. knowing real‐time price changes and customer preferences), leading to BDD actions that enhance business performance. Our results, raised from structural equation modelling, indicate that BDS teams’ skills that produce valuable insights are the key determinants for BDD actions, which ultimately contribute to business performance. We further demonstrate that those organizations that emphasize BDD actions perform better compared to those that do not focus on such applications and relevant insights.     

Leading teams in the digital age: Four perspectives on technology and what they mean for leading teams

Digital technologies are changing the nature of teamwork in ways that have important implications for leadership. Though conceptually rich and multi-disciplinary, much of the burgeoning work on technology has not been fully integrated into the leadership literature. To fill this gap, we organize existing work on leadership and technology, outlining four perspectives: (1) technology as context, (2) technology as sociomaterial, (3) technology as creation medium, and (4) technology as teammate. Each technology perspective makes assumptions about how technologies affect teams and the needs for team leadership. Within each perspective, we detail current work on leading teams. This section takes us from virtual teams to new vistas posed by leading online communities, crowds, peer production groups, flash teams, human-robot teams, and human-artificial intelligence teams. We identify 12 leadership implications arising from the ways digital technologies affect organizing. We then leverage our review to identify directions for future leadership research and practice.