Beyond the trade-off and cumulative capabilities models: alternative models of operations strategy

Organisations are expected to develop sound strategies relating to their core operations capabilities of cost efficiency, quality, delivery, flexibility and innovation, to gain and maintain competitive advantage. However, there is a paucity of specific models that can be used to explain and predict how organisations combine and use these capabilities. Previous research has primarily focused on the ‘trade-off’ and the ‘cumulative capabilities’ models. In this study, data from an international sample of 1438 manufacturing plants are used to explore other models that organisations are using in addition to the two predominant models. This analysis shows that, in practice, the trade-off model is not used, but the cumulative capabilities model is used extensively. Further, our proposed new models, the ‘threshold’, ‘average’ and ‘multiple’, are prevalent in many plants. Also, a small proportion of the plants have in place the ‘uncompetitive’ model. In terms of relative effectiveness, there are no significant differences between the models with respect to several measures of operational performance. Overall, this study provides empirical evidence that there are other operations strategy models beyond the trade-off and cumulative capabilities dichotomy that organisations deploy.     

The impact of market focus on operations practices

A key element of successful organisations is the alignment of their strategy and tactics. This study explores the relationship between a firm's competitive strategy and its operations practices in the context of a developing economy. Two competitive strategies are examined; a niche market strategy characterised by targeting specific market segments, and a broad market strategy characterised by serving a wide range of market segments. Three sets of operations practices consistent with the adoption of lean manufacturing, Total Quality Management, and relationship development in a supply chain context, are explored. Using survey data from senior managers in Thailand, results show that for firms adopting a niche market focus, competitive strategy directly influences process management and relationship development, which in turn affect workforce commitment. Only workforce commitment has a direct effect on operational performance. In contrast, for firms adopting a broad market focus, competitive strategy directly influences workforce commitment, which in turn affects process management and relationship development practices. It is the latter practices that directly influence operational performance.     

基于产业价值链的我国制造业竞争战略研究

在跨国公司主导的产业价值链体系中,以寻求比较优势为目标的传统竞争战略对我国制造业竞争力产生了严重的削弱作用。研究表明,为获得可持续竞争力,我国制造业竞争战略的重点应聚焦如何建立在产业价值链中的主导和控制地位。     

The significance of organizational change management for sustainable competitiveness in manufacturing: exploring the firm archetypes

The successful development and deployment of adequate sustainable manufacturing strategies are still open issues and of utmost interest for research and practice. Guided by this particular challenge, we investigate the significance of organisational change management for sustainable competitiveness in manufacturing. By using six case studies from the Lombardia region in Italy and basing our research on the theoretical constructs of competitive aggressiveness and organisational change, we discover four archetypes of companies that show an increasing sustainable competitiveness with an increasing formalism and persistence in organisational change. Our findings suggest that change management practices are conditional hypothesis for creating competitive advantage through sustainability, and implementation gaps do hinder companies in realising the full potential. The study offers guidance to stakeholders, on how change management actions may potentially affect company performance in the manufacturing sector, as well as providing direction on the impact improved planning and leadership instances can have on the sustainability performance.     

ON CAPACITY MODELING FOR PRODUCTION PLANNING WITH ALTERNATIVE MACHINE TYPES

Analyzing the capacity of production facilities in which manufacturing operations may be performed by alternative machine types presents a seemingly complicated task. In typical enterprise-level production planning models, capacity limitations of alternative machine types are approximated in terms of some single artificial capacitated resource. In this paper we propose procedures for generating compact models that accurately characterize capacity limitations of alternative machine types. Assuming that processing times among alternative machine types are identical or proportional across operations they can perform, capacity limitations of the alternative machine types can be precisely expressed using a formulation that is typically not much larger than the basic linear programming formulation that does not admit alternative resource types. These results have important implications for industrial practice, suggesting that in the case that processing times are nearly proportional among alternatives, the prevalent approximation that involves using a single, capacitated, artificial resource may be dropped in favor of our formulation incorporating the approximation that processing times among the alternatives are proportional. Another advantage is that the set of capacity constraints we formulate can be used to check the feasibility of suggested production schedules or demands simply by plugging mem into the constraints, without need to develop values for allocation variables.     

The role of the competitive environment in studies of strategic alignment: a meta-analysis

Numerous studies in operations management have investigated alignment between business and functional level strategies. In spite of the considerable amount of research that has been conducted, little consensus exists regarding how the competitive environment affects the relationship between strategic alignment and organisational performance. In this study, we build on prior operations management research that has examined alignment by examining whether the competitive environment mediates or moderates the relationship between alignment and performance. Using meta-analytic procedures, we find evidence that the competitive environment functions as a mediator in the relationship between strategic alignment and organisational performance. The implications of our study are that researchers should carefully consider how the competitive environment may affect their results in strategic alignment studies. Results from our study also suggest that the environment is a salient contributing factor to a firm's performance and that managers need to pay close attention to its competitive environment when make strategic and operational decisions.     

Examining the effects of green supply chain management practices and their mediations on performance improvements

Environmental pressures have caused green supply chain management (GSCM) to emerge as an important corporate environmental strategy for manufacturing enterprises. For manufacturers to fully realise the performance potentials of GSCM, they need to integrate internal GSCM practices emphasising functional coordination with external GSCM practices such as cooperation with suppliers and customers in the implementation. Using coordination theory, this article examines three models used to evaluate the mediation relationships between the external and internal practices of GSCM with respect to environmental, economic, and operational performance. We posit that the strategic stance of manufacturing enterprises in improving their overall performance and competitive position requires a joint coordination of internal and external GSCM practices. Survey data collected from 396 Chinese manufacturing enterprises are used to validate our arguments by testing the mediation effects of two categories of GSCM practices. Our empirical results show support for the mediation effects, which indicates the importance for manufacturers to coordinate between the internal and external aspects of implementing GSCM practices to reap the performance benefits. Coordinating internal and external GSCM practices to seek performance improvements is an important aspect of the manufacturing operations strategy. The dynamics of implementing GSCM practices and the performance contingencies are worthwhile topics to pursue in future research.     

提升台湾IC制造业竞争力之策略选择

首先介绍台湾IC产业之发展状况,然后进一步分析IC制造之竞争力,接着根据制造策略相关文献及业界专家意见访查,找出提升台湾IC制造竞争力之策略：设备利用率、先进制造技术、供货商关系、品质管制、人力资源,这些策略造就了台湾IC制造之竞争优势,也提供半导体制造管理之新典范。     

The impact of supply chain analytics on operational performance: a resource-based view

This study seeks to better understand the role of supply chain analytics (SCA) on supply chain planning satisfaction and operational performance. We define the architecture of SCA as the integration of three sets of resources, data management resources (DMR), IT-enabled planning resources and performance management resources (PMR), from the perspective of a resource-based view. Based on the data collected from 537 manufacturing plants, we test hypotheses exploring the relationships among these resources, supply chain planning satisfaction, and operational performance. Our analysis supports that DMR should be considered a key building block of manufacturers’ business analytics initiatives for supply chains. The value of data is transmitted to outcome values through increasing supply chain planning and performance capabilities. Additionally, the deployment of advanced IT-enabled planning resources occurs after acquisition of DMR. Manufacturers with sophisticated planning technologies are likely to take advantage of data-driven processes and quality control practices. DMR are found to be a stronger predictor of PMR than IT planning resources. All three sets of resources are related to supply chain planning satisfaction and operational performance. The paper concludes by reviewing research limitations and suggesting further SCA research issues.     

Concurrent optimal allocation of distributed manufacturing resources using extended Teaching-Learning-Based Optimization

The optimal allocation of distributed manufacturing resources is a challenging task for supply chain deployment in the current competitive and dynamic manufacturing environments, and is characterised by multiple objectives including time, cost, quality and risk that require simultaneous considerations. This paper presents an improved variant of the Teaching-Learning-Based Optimisation (TLBO) algorithm to concurrently evaluate, select and sequence the candidate distributed manufacturing resources allocated to subtasks comprising the supply chain, while dealing with the trade-offs among multiple objectives. Several algorithm-specific improvements are suggested to extend the standard form of TLBO algorithm, which is only well suited for the one-dimensional continuous numerical optimisation problem well, to solve the two-dimensional (i.e. both resource selection and resource sequencing) discrete combinatorial optimisation problem for concurrent allocation of distributed manufacturing resources through a focused trade-off within the constrained set of Pareto optimal solutions. The experimental simulation results showed that the proposed approach can obtain a better manufacturing resource allocation plan than the current standard meta-heuristic algorithms such as Genetic Algorithm, Particle Swarm Optimisation and Harmony Search. Moreover, a near optimal resource allocation plan can be obtained with linear algorithmic complexity as the problem scale increases greatly.     

Manufacturing strategy,the business environment,and operations performance in small low-tech firms

This paper reports on a ten-year study of ten manufacturing companies in New Zealand. Over the period the firms endured a turbulent environment where they were subject to large changes in exchange rate, and some faced forced changes in products, and markets as a result of changes in ownership and government policy. The paper examines the stability of manufacturing strategies in such an environment, the emphasis placed on improvement initiatives and what impact these decisions had on manufacturing performance. The study uses a multi-case, longitudinal approach. It found the strategy configurations were not stable and many firms moved towards a price-based configuration, contrary to other literature. The more successful firms put greater investments into infrastructural categories of their operations strategy in accordance with the resource-based view. Operations performance indicators showed some improvement on manufacturing costs but other indicators showed no real pattern.     

Can small firms gain relational advantage? Exploring strategic choice and trustworthiness signals in supply chain relationships

Organisational theory explicates that partners who overcome the challenges to developing trust-based interorganisational relationships can gain a vital source of competitive advantage. However, the extant relational research focuses on large, resource-rich entities. We, by contrast and extension, investigate whether small and medium-sized firms can leverage supply chain relationships for competitive advantage. Specifically, power imbalances and resource constraints are additional challenges common to small firms that may diminish their desire and ability to pursue relational advantage. However, we posit that effective, trust-based governance can enable small and medium-sized firms to overcome their unique challenges to enter more collaborative relationships and thereby improve operational and firm performance. Our findings from a survey of manufacturing firms provide evidence that small and medium-sized firms can gain performance benefits when they (1) make the conscious choice to pursue trust-based collaboration and (2) strategically demonstrate trustworthiness.     

Comprehensive framework for the development of a supply chain strategy

Current competition among companies is fought through their supply chains. As the performance of the supply chain depends not only on manufacturing and marketing attributes, it becomes necessary to establish a framework upon which to develop a supply chain strategy. The paper presents the rationale and principles of a customer–product–process–resource (CPPR) framework for the simultaneous analysis of the business, supplier, manufacturing, planning, marketing and customer dimensions of a supply chain strategy. The originality of the CPPR framework is that it establishes a set of supply chain structural elements, that when put together determine the degree of alignment of a supply chain strategy. As the main objective of a supply chain strategy is to achieve customer satisfaction as an output of the supply chain operations, the CPPR framework becomes a realignment tool when used in combination with a realignment methodology, which is also presented in the paper.     

Modeling strategic semiconductor assembly outsourcing decisions based on empirical settings

In semiconductor supply chains, most chip makers focus on core competence of wafer fabrication and utilize assembly outsourcing to reduce operational costs, enhance capital-effectiveness of investments, and diversify the risks among the vendors. Assembly outsourcing decisions involve strategic partnerships with vendors and operational excellence for order allocations subject to production constraints, cost, delivery, and quality. This study aims to develop a decision framework in which preference over vendors at strategic level and order allocations at operational level can be integrated. Focusing on real setting in a semiconductor company, a decision support system embedded with proposed models was developed to evaluate vendor performance, allocate the orders, and generate the associated material requirement planning reports. The results showed practical viability of the proposed framework for modeling manufacturing strategy with the integration of optimized operational decisions.     

Taxonomy of information technology strategy and its impact on the performance of third-party logistics (3PL) in China

This paper develops a taxonomy of information technology strategies used by third-party logistics (3PL) firms in China based on a cluster analysis of survey data from 105 of these 3PL firms. The information technology strategies have been classified into three major groups: supportive, technological, and aligned. The paper also investigates the effect of information technology strategies on information technology advantage, competitive advantage, and financial performance. The results of the study indicate that efforts to improve information technology systems can only be effective if the information technology improvements are properly aligned with a company's overall strategy. It is found that companies that attempt to improve their information technology systems without the proper alignment of information technology with the company's overall strategy can achieve information technology advantages relative to their competitors, but not competitive advantages or improved financial performance. This study is the first attempt to develop an information technology strategy taxonomy for 3PL companies in China. It provides valuable guidance and insights for managers in the development of information technology strategies in 3PL companies.     

Structural and infrastructural practices as elements of content operations strategy. The effect on a firm's competitiveness

Some extant theoretical studies and different empirical results have demonstrated that a firm's behaviour explains several notable competitiveness microeconomic foundations, based on a wide bundle of elements. Firms can directly control most of these elements; in this paper, we will focus on those related to operations management. Therefore, products, processes, technology, equipments or quality control systems will centre our attention. These, and some additional elements, constitute decisions within the operations management area that must be included in the content of operations strategy. Operations strategy can be conceptualized as a set of decisions or practices with regard to structure and infrastructure variables. On the one hand, these strategic decisions influence a firm's abilities successfully to reach some competitive priorities such as cost, quality, delivery and flexibility, and, on the other hand, to obtain the expected performance. This research analyzes which are the main structural and infrastructural practices that constitute operations strategies in manufacturing companies, and investigates the effect of these decisions on some firm competitiveness indicators.     

TQM and brand-building by Chinese original brand manufacturers: impact on business performance

To gain competitive advantage, original brand manufacturers (OBMs) need to understand how operations and marketing cooperate to achieve performance. Doing so can guide OBMs to make appropriate actions to develop their operational and marketing capability, and foster collaboration between the two functions. Using data collected from 560 Chinese OBMs, the authors investigated the joint impact of total quality management (TQM) initiated by operations and brand-building undertaken by marketing on product quality, brand performance and customer satisfaction and loyalty. The results revealed that the two efforts interact and generate gains that individual efforts cannot realize. Not only their interaction generates additional value to product quality, the results also broadly substantiated the authors’ hypothesis that TQM and brand-building take different paths to affect customer satisfaction and loyalty. In total, although brand-building, as matter of inputs, may impose stronger influences on the performances, OBMs should not neglect TQM, as investing in both is critical to the firm’s long-term success.     

Developing environmental and social performance: the role of suppliers’ sustainability and buyer–supplier trust

We explore how environmental and social performance of manufacturing firms can be improved as sustainable supply chain management (SSCM) develops and evolves within a firm from internal to external practices. Importantly, this study considers how key suppliers’ sustainability performance and buyer–supplier trust mediate and moderate such a development. A conceptual framework is developed which relies on resource-based theories and emerging empirical evidence. Then, partial least square methodology is applied on survey data from a sample of Italian manufacturing firms. Results show that manufacturing firms’ sustainability performance improves as SSCM develops; however, while internal practices have a direct impact on performance, the effect of external practices on a manufacturing firm’s sustainability performance is fully mediated by key suppliers’ sustainability performance. Yet, buyer–supplier trust significantly influences the scope of such gains. Since evidence suggests that manufacturing firms are still struggling with how to leverage supply chain innovation potential for sustainable development, this study provides a timely and valuable contribution.     

Assessing the performance of a vertically disintegrated chain by the DEA approach–a case study of Taiwanese semiconductor firms

The competitiveness of an individual firm depends upon the competitiveness of the value chain to which it belongs. The core constraint of virtually every chain is that chains are structured, measured and managed in parts, i.e. vertically disintegrated, rather than as a whole. Assessing the performance of vertically disintegrated firms can provide an insight of how each firm acts in such a value chain. This paper aims to study the operating performance of the vertically disintegrated chain in the integrated circuits (IC) industry. A performance evaluation was completed for 48 leading vertically disintegrated semiconductor companies in Taiwan, including 17 in design, 10 in fabrication and 21 in packaging/testing, using the data envelopment analysis (DEA) approach which inherently recognises tradeoffs among various measures. The empirical results indicate that the IC design firms perform better than IC fabrication and IC packaging/testing firms. Overall, semiconductor firms in Taiwan still have room for performance improvement. In addition, the empirical results suggest that an IC company's scale of size does play an important role in influencing its operating efficiency. One can increase performance by consolidating with other smaller units to achieve an optimal size. In addition, an analysis of operating performance by DEA can provide a semiconductor firms’ operations with insights into resource allocation competitive advantages, and help with strategic decision-making, especially regarding operational styles under an intense competitive environment.