The impact of sales and operations planning practices on manufacturing operational performance

There is a lack of rigorous empirical studies directly examining the impact of sales and operations planning (S&OP) practices on manufacturing operational performance. This paper aims to fill this gap by analysing a sample of 725 manufacturers from 34 countries. Hypotheses relate internal S&OP, integration with suppliers (IS) and integration with customers with manufacturing operational performance (delivery, quality and flexibility). The constructs were validated with structural equation modelling and the hypotheses were tested using multiple stepwise regression. Our findings showed a positive and moderate-to-large effect of internal S&OP on manufacturing performance, controlling for firm size, country economic development and market dynamics. There was no significant impact of supply chain integration on manufacturing performance. However, we found that IS positively moderated the relationship between internal S&OP and performance, suggesting that firms with mature IS amplify the effect of internal S&OP on performance. The study is among the first to empirically and rigorously establish the impacts of S&OP practices on manufacturing performance, using a large sample of manufacturers spanning different countries, markets and firm sizes. Results show that S&OP practices have a broad impact across several performance dimensions and are a powerful lever for generating manufacturing performance.     

A hierarchical fuzzy TOPSIS approach to assess improvement areas when implementing green supply chain initiatives

Implementing green supply chain management (GSCM) initiatives can generate more business opportunities for firms. It also requires changes in firms’ operational capabilities and resources that may have an adverse effect on firms’ operations performance. In order to achieve sustainable economic and environmental performance, it is essential for companies to evaluate different green initiatives and assess improvement areas when implementing green initiatives. This study proposes a fuzzy hierarchical TOPSIS approach to support such an assessment. It enables decision makers to better understand the complete evaluation process and provide a more accurate, effective and systematic decision support tool. An illustrative case is presented to help researchers and practitioners understand the importance of developing an appropriate organisation strategy in implementing green practices.     

What hampers green product innovation: the effect of experience

ABSTRACT

Based on representative firm-level survey data for Austria, Germany, and Switzerland, this study systematically analyses the relevance and drivers of barriers to green product innovation using the example of green energy technologies. ‘Low willingness to pay’, ‘high development costs’, ‘high commercial uncertainty’, and ‘lack of favourable political framework’ are identified as the most important barriers. Moreover, we find that the firms’ innovation experience is an important driver of the level of green innovation barriers. Green innovation barriers are more accentuated for firms with green innovation activity than for firms with no green innovation activity. However, experience from different fields of green innovation and experience from non-green innovation activities help to limit these barriers.     

Lean and green combine to impact environmental and operational performance

We assess the antecedent link between lean and green practices and assess the combined impact of lean and green practices on both environmental and operational performance. A lean and green practices performance model is proposed that incorporates lean and green practices as antecedents to both environmental and operational performance. Structural equation modelling was used to analyse data collected from a sample of 182 manufacturing managers in U.S. plants. We found that lean manufacturing practices are positively associated with environmental performance and operational performance and that green supply chain management practices are positively associated with environmental performance and environmental performance is positively associated with operational performance. No support was found for the idea that green supply chain management practices are positively associated with operational performance. While lean practices were found to directly affect environmental performance, the indirect effect of lean practices on environmental performance through green practices is stronger, indicating complementarity.     

Effects of green supply chain integration and green innovation on environmental and cost performance

This paper argues that mechanisms such as information sharing and collaboration used in green supply chain integration (GSCI) to improve information processing capacity can reduce uncertain outcomes of green product and process innovation. Based on data from a survey of Chinese (Hong Kong) firms, the paper tests whether the three dimensions of GSCI (green internal, customer and supplier integration) improve environmental performance and cost reduction by facilitating green product and process innovation. The results show that green customer integration improves cost and environmental performance through green process innovation (not green product innovation). Both green product and process innovations are facilitated by green customer integration (not green supplier integration), while both green customer and supplier integration significantly depend on green internal integration. These suggest that the distinctive information processing capacity created by green internal and customer integration can facilitate the green process innovation required to improve environmental and cost efficiency, while green product innovation and green supplier integration cannot create such efficiencies.     

Developing an analytical framework for study of emerging country multinationals’ operations management

The rise of emerging country multinationals (EMNEs) is opening new perspectives for the study of international operations management (IOM). Research may address issues which are inexistent when the object of study is long-established developed country multinationals (DMNEs). One of the issues that may be noticed, and will be studied in this article, has to do with the design and implementation of new international operations networks. In contrast to DMNEs, internationalisation of EMNEs is strongly influenced by two further factors: country-of-origin effects and role in global production networks. Therefore, studies of EMNEs’ international operations networks must embrace two other analytical levels besides the network level: the strategic level of the headquarters and the operational level of the subsidiaries. The analytical framework in this study has been developed through the use of constructs and concepts from both IOM and international business literatures. Such framework applied to three Brazilian multinationals leads to relevant insights on the internationalisation of EMNEs as well as the design and implementation of international operations networks for such late-moving firms.     

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.     

International relocation and production geography in the European automobile components sector: the case of Spain

This article, based on the various approaches to location theory, analyses relocation processes in the Spanish automobile components industry in order to explain the importance of internal factors at both corporate and production plant levels. While acknowledging that location advantages play a relevant role, we show that changes in production geography can, to a great extent, be explained by corporate strategies, other decision-making mechanisms and firms’ characteristics. The results obtained from an empirical study during the period 2001–2008 show that the search for lower labour costs and corporate restructuring in order to achieve global production efficiency are the main factors determining relocation in the Spanish sector. These processes are facilitated by the operational flexibility of the multinational firms that dominate the sector. Lean supply and technological requirements are the main barriers to such processes of production plant mobility. From the point of view of practical relevance, the article shows that these logistic and technological determinants should be considered by managers in their relocation decisions not only in terms of cost efficiency but also in terms of the risks involved in relocation processes. Any relocation project must include measures to mitigate such risks.     

Supply chain integration patterns and operational performance: a plant-level survey-based analysis

Though most scholars recognise that supply chain integration (SCI) can contribute to improving operational performance, previous studies on the SCI-performance link showed mixed results and several questions on this issue remain still open. In line with a configurational perspective, this study investigates whether plants adopting multiple integration practices (i.e. full SCI adopters) perform better than plants implementing only some selected SCI practices (i.e. partial adopters) and plants which do not implement any SCI practice (i.e. non-adopters). In addition, it analyses whether partial adopters show a superior performance compared to non-adopters. Analyses based on a sample of 317 manufacturing plants reveal that full adopters perform better than non-adopters, in terms of quality, delivery, flexibility and efficiency. Among partial adopters, a particular SCI pattern, characterised by a high level of internal integration and supply chain planning, differs from non-adopters in terms of delivery, and shows results similar to full adopters in terms of quality and efficiency. More surprisingly, the other patterns of partial adopters do not significantly differ from non-adopters in any performance dimensions, and underperform full adopters in each performance. This suggests that in order to maximise SCI benefits companies should lever on multiple integration practices, and that in some cases focusing only on selected integration activities can be useless. A further interesting implication is that companies can cumulatively increase their operational performance towards a full exploitation of SCI benefits by following a certain sequence of SCI practices.     

Proactive environmental strategies and performance: role of green supply chain processes and green product design in the Chinese high-tech industry

Though many firms still believe that passive environmental strategies are sufficient, it is pertinent that they move beyond this belief and take a proactive supply chain-wide environmental stance so as to create a sustainable environment. In this paper, we seek to extend current work within green supply chain management by considering multiple green supply chain capabilities and performance measures. We hypothesise the linkage between environmental orientation, green supply chain capabilities and performance by drawing upon stakeholder theory and natural resource-based view. More importantly, our study is the first to distinguish between product and process-related capabilities in the green supply chain area and study their direct and mediating role with respect to environmental and financial performance measures. Using survey data collected from 256 Chinese-based high-tech firms, we analyse several hypothesised relationships. Our results provide strong support for the significant role that green product design and green supply chain processes can play in improving firms’ environmental and financial performance. Interestingly, our results also suggest that green product design may not have a direct impact on financial performance.     

Contextual and mediation analysis between TQM critical factors and organisational results in the EFQM Excellence Model framework

Following a total quality management (TQM) approach and the EFQM Model framework, this contribution aims to study the influence of TQM social factors on organisational results, by considering the TQM technical factors as a mediating variable in this relationship. Moreover, the effect of size and type of business on the implementation of TQM and results is analysed, as well as determining which TQM practices have a more important effect on the operational results. The research questions and hypotheses proposed in this research model are tested on a sample of 116 Spanish firms. The results support the reliability, validity and the high-predictive power of the EFQM Excellence Model as a framework for the implementation of TQM. Moreover, our findings indicate that TQM social factors provide a cornerstone for the success of the quality system. Similarly, TQM technical factors partially mediate the relationship between TQM social factors and results. It was also found that TQM social factors and processes management are the main predictors of operational performance. Finally, significant differences were found in TQM implementation, and in the key results of companies, based on their size; however, these differences are not significant based on the sector activity.     

Internal levers for servitization: How product-oriented manufacturers can upscale product-service systems

Manufacturing companies that venture into servitisation can experience difficulties when upscaling product-service systems (PSS) for further growth. This research study has two main objectives: first, to develop insight into the internal levers to increase firms’ servitisation capacity, and second, to apply a new methodology to support companies in upscaling PSS. For these purposes, we conduct an exploratory research study of eight manufacturing companies, consisting of both multiple-case and participatory action research methods. We find that manufacturers often experience challenges when either designing or rolling out PSS, which varies based on the company’s chosen strategy. Additionally, they can be confronted with an organisational logic that hinders PSS upscaling efforts. This research offers guidance to practitioners facing internal barriers for servitisation, providing a new method to explore, prioritise and work out concrete PSS-enhancing projects.     

Supply chain flexibility concepts,dimensions and outcomes: an organisational capability perspective

Due to the increasing uncertainty and diversity in supply chains (SCs), companies are aiming to develop their SC flexibility, which we define as the capability of a company, both internally and externally in conjunction with its key suppliers and customers, to respond to uncertainties and customer expectations without excessive costs, time and performance losses. SC flexibility has three dimensions – internal, supplier and customer flexibility. This study investigates how SC flexibility improves operational and financial performance from the organisational capability perspective. The conceptual model is empirically tested using data collected from 216 companies in China. Our findings suggest that only customer and internal flexibility contribute to operational performance directly, while supplier flexibility contributes to operational performance only indirectly through internal flexibility. The three dimensions of SC flexibility have no direct impacts on financial performance. We further identify complementarities between supplier and customer flexibility and tradeoffs between supplier and internal flexibility. However, no synergy effect is found for internal and customer flexibility on operational performance. This study provides a framework to understand SC flexibility from the organisational capability perspective and identifies the inter-relationships among the three dimensions of SC flexibility and operational and financial performance.     

The relationship between corporate social responsibility and corporate performance: evidence from the US semiconductor industry

This study adopts a two-stage approach to explore the relationship between corporate social responsibility (CSR) and semiconductor companies’ performance during 2004–2008. In the first stage, dynamic data envelopment analysis is adopted to explore whether CSR affects US semiconductor firms’ performance, and the difference in performance between CSR firms and non-CSR firms is analysed; in the second stage, panel data regression is used to determine which quantitative indicators of CSR significantly affect the performance of US semiconductor firms. The empirical results show that social responsibility investment by US semiconductor firms has positive effects on their performance. This study thus suggests that the US semiconductor companies should pay more attention to the CSR quantitative indicators, including human rights, employee relationships, and environment issues in order to enhance their corporate efficiency.     

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.     

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.     

Investigating risks of outcome-based service contracts from a provider’s perspective

Outcome-based contracts (OBC) refer to agreements between providers and customers where providers are paid based on the outcomes they deliver to customers. OBCs have become common for manufacturing firms that are servitising, especially those firms providing advanced services focusing on availability and capability. Whilst many authors acknowledge the importance of understanding risks in OBCs from a provider’s perspective, there are relatively few in depth extant studies. To address this gap in the literature, we conducted 24 interviews with 11 companies to explore risks and risk factors in OBCs from the provider’s perspective. The case studies reveal that the two major risk categories in OBCs are commercial risk regarding the contract negotiations and contract decisions at the contracting stage, and operational risk regarding the implementation and the delivery of OBCs. Our study identifies 23 risk factors that can lead to commercial risk and operational risk in five dimensions: (i) complexity and (ii) dynamism regarding the context of OBCs, (iii) capability, (iv) alignment and (v) dependency regarding the stakeholders of OBCs. The paper explores the links between these risk factors and commercial and operational risk. In doing so, the paper provides a framework for understanding risk in OBCs.     

Lean practices implementation and their relationships with operational responsiveness and company performance: an Italian study

Although many firms report large benefits from lean implementation, a lot of scepticism still remains regarding attainable results and the possibility to apply Lean approach outside high-volume manufacturing and stable context. In this work, combining field interviews with literature review, theoretical connections have been developed among Lean manufacturing techniques, operational responsiveness and company growth performances. A conceptual model has been proposed for investigating the network of influences among lean practices (supplier management, human resource management, just-in-time and total quality management practices), operational responsiveness (Product mix variety, Product innovation and Time effectiveness) and company growth performances in Italian companies. Using structural equation modelling, a second-order confirmatory factor analysis has been used to test the hypothesised relationships in the structural models. This study highlights that the operational responsiveness is only partially connected to a Lean strategy of a company. Indeed, the lean practices implementations are negatively influenced by product mix variety and innovation, while positively influenced by time effectiveness variables. Moreover, product mix variety and time effectiveness are the main characteristics of the operational responsiveness that positively influences company growth performances. So time effectiveness could be considered as a mediator between Lean best practices and firm growth. Moreover, no direct relationship has been found between lean bundles and firm’s performances. Lack of resources and mainly poor communication and managers’ commitment and support seem to be the main obstacles of lean implementation and success.     

Development of a model of barriers to environmentally conscious manufacturing implementation

Manufacturing firms consume energy and natural resources in highly unsustainable manner and release large amounts of green house gases leading to many economic, environmental and social problems from climate change to local waste disposal. Consciousness about these issues has led to a new manufacturing paradigm of environmentally conscious manufacturing (ECM). However, there are various barriers to the implementation of ECM. A proper understanding and analysis of these barriers will allow the management of the company and government to prioritise their focus to mitigate root barriers for effective implementation of ECM. This paper aims at identifying the barriers to ECM, developing a model of these barriers using statistical analysis and testing the model using structural equation modelling technique. The results provide three types of barriers – internal, policy and economic. The results show that internal barriers are the root barriers and cause policy and economic barriers. It reflects that the barriers which are internal to the organisation should be mitigated first for effective implementation of ECM.     

Effects of social capital on operational performance: impacts of servitisation

Studies on servitisation have largely overlooked the roles of social capital with suppliers and knowledge management. We propose a moderated mediation model to investigate the impacts of servitisation on the mechanisms through which social capital with suppliers improves operational performance. The hypotheses are empirically tested using structural equation modelling and data collected from 276 manufacturing firms in China. The results show that social capital improves operational performance both directly and indirectly through knowledge management, and the relationships are influenced by servitisation. In particular, social capital improves operational performance directly and indirectly through knowledge combination in servitised firms, whereas social capital only improves operational performance indirectly through knowledge acquisition in traditional manufacturers. The findings contribute to the literature by revealing that the effects of social capital with suppliers on operational performance are partially mediated by knowledge acquisition and knowledge combination and the mediation effects are moderated by servitisation, and by providing insights into how to design purchasing and production systems to profit from servitisation.