Antti Tenhiälä

Order Management in the Customization‐Responsiveness Squeeze*

Make-to-order (MTO) products may be either customized or standard, and customization can occur either at the configuration or component level. Consequently, MTO production processes can be divided into three customization gestalts: non-customizers, custom assemblers, and custom producers. In this article, we examine how the multilevel nature of customization affects order management in processes that produce complex MTO products. We first empirically validate the existence of the three customization gestalts and subsequently, analyze the order management challenges and solutions in each gestalt in a sample of 163 MTO production processes embedded in seven different supply chains. In the analyses, we follow a mixed-methods approach, combining a quantitative survey with qualitative interview data. The results show that important contingencies make different order management practices effective in different gestalts. Further qualitative inquiry reveals that some seemingly old-fashioned practices, such as available-to-promise verifications, are effective but commonly neglected in many organizations. The results also challenge some of the conventional wisdom about custom assembly (and indirectly, mass customization). For example, the systematic configuration management methods—conventionally associated with project business environments—appear to be equally important in custom assembly.

Item dwell time in project inventories: A field experiment

This paper describes the use of item dwell-time measurement in the context of capital investment projects. It contributes to the research on product-centric control and intelligent products by empirically demonstrating the value of item dwell-time alerts in the context of project delivery. The paper shows how item dwell-time measurement can be implemented in the field, and compares item dwell-time alerts to conventional measures of inventory turnover and inventory value in four telecommunications infrastructure projects. We find that when individual items cannot be used interchangeably at project sites, conventional inventory measures do not provide sufficiently timely and accurate information about emerging problems in project inventories. These findings are especially important in situations in which supply chain managers can find alternative uses for materials at other sites or in other projects. Timely reallocation of materials prevents the accumulation of slow-moving items that weigh on project performance by increasing obsolescence and inventory holding costs.

Looking Inside Glitch Mitigation Capability: The Effect of Intraorganizational Communication Channels

Manufacturers can reduce the occurrence of glitches in their operations by building capabilities to prevent them, yet mitigation capabilities are also needed to contain the effects of the glitches that will still inevitably occur every now and then. We examine the glitch mitigation capability of a production process from an information-processing perspective and propose that (i) the impact of operational glitches on delivery performance is contingent on the formalization of intrafirm communication channels and (ii) this effect is stronger when formal communication channels are complemented with informal channels. We test our model in a sample of 163 make-to-order production processes and find support for the first hypothesis and partial support for the second hypothesis. The statistical analyses also reveal nonhypothesized empirical regularities, which we explore through an additional qualitative study based on 34 site visits and 30 interviews with production planners. The results have practical implications for the design of intraorganizational communication channels, and they also contribute to the research on organizational resilience and communications by showing that when coping with disruptions, the formal communication channels have advantages that are seldom discussed in the literature or recognized by practitioners.

ERP System versus Stand‐Alone Enterprise Applications in the Mitigation of Operational Glitches

Business function-specific stand-alone enterprise applications (SEAs) are displacing functionally integrated enterprise resource planning (ERP) systems, despite strong empirical support for the business benefits of the latter. This study explores the conditions under which it may be more effective to use a set of SEAs instead of a single-suite ERP system, and vice versa. Based on Organizational Information Processing Theory, we expect differences in effectiveness to grow in prominence when the uncertainty of the operating environment increases, that is, when operational glitches in production processes become more frequent. Extending the existing literature, we postulate that high functional differentiation is a precondition for SEAs to be more effective than an ERP system, hypothesizing that the level of functional interdependence ultimately determines which type of software is superior for a given production process. We test our hypotheses using data collected from 163 make-to-order (MTO) production processes nested within 73 manufacturing plants and seven supply chains of complex, high-tech machinery. Results show that when functional interdependence is low, the negative effect of operational glitches on delivery performance is effectively mitigated in MTO production processes wherein process-related information is managed predominantly using SEAs; conversely, when functional interdependence is high, using an ERP system is more effective. Our findings offer practical guidelines as to when to use SEAs versus an ERP system while also integrating and updating the findings of earlier empirical research, in which each has been analyzed separately.