G. Keong Leong

Business environment, operations strategy, and performance: An empirical study of Singapore manufacturers

Abstract Consideration of the task environment, those forces which are out of the short-run control of management, has been relatively neglected in operations strategy research. The neglect of environmental factors in operations strategy research is surprising when one considers that the fit between environment and organizational capabilities and resources is a central tenet of major stretegic management paradigms. We use a path analytic framework to study the effects of environment on operations strategy selection and performance (self-reported change in profits) for a sample of Singapore manufacturers. We identify strong relationships between environmental factors such as labor availability, competitive hostility, and market dynamism and the operations strategy choices encompassed by competitive priorities. The data also indicate that, when faced with the same environmental stimuli, high performers choose to emphasize different competitive priorities than low performers. In addition to exploring substantive questions about the importance of the environment in explaining operations strategy, this research also demonstrates that environmental variables can provide effective controls for industry effects in multiple industry empirical studies in operations strategy.

Configurations of Manufacturing Strategy, Business Strategy, Environment and Structure

By developing strategic configurations which describe commonly used paths to competitive advantage for manufacturers, this paper reconciles some basic concepts from competitive strategy and manufacturing strategy. Four basic strategic configurations are identified: niche differentiator, broad differentiator, cost leader, and lean competitor. The configurations are traced conceptually through competitive strategy, organizational structure, environment, and a strategic framework of manufacturing capabilities and decisions. Examples from the major home appliance industry are provided for each configuration.

Unlocking the potential of advanced manufacturing technologies

Abstract This research examines whether investments in advanced manufacturing technologies (AMTs) such as flexible manufacturing systems (FMS), computer aided design (CAD), computer aided manufacturing (CAM), robotics, etc., are more likely to lead to improved performance if they are supported by improvements in the manufacturing infrastructure of the company. This question is evaluated using data gathered from 202 manufacturing plants chosen from industries generally considered to have relatively high investments in technology. Multiple item scales are developed and adapted from sources in the literature to measure investments in technology, infrastructure, and the performance of the plant. Evidence supporting the reliability and validity of these scales is provided. Hierarchical regression is used to analyze the relationship between technology, infrastructure, and performance. The results suggest that there is an important interaction between the adoption of advanced manufacturing technologies and investments in infrastructure. Firms that invest in both AMTs and infrastructure perform better than firms which only invest in one or the other. Separate analyses on sub-samples of firms with the highest and lowest investments in AMTs show that infrastructural investments have a stronger relationship with performance in the high investment group. Thus, the data indicate that infrastructural investments provide a key to unlocking the potential of advanced manufacturing technologies.

Approaches to the factory of the future. An empirical taxonomy

Abstract An empirical analysis of the patterns in which companies invest in advanced manufacturing technologies (AMTs) such as computer-aided design, computer-aided manufacturing, and flexible manufacturing systems is presented. Data for this analysis are gathered from 202 manufacturing plants chosen from industries generally considered to have relatively high investments in technology. Three general types of AMTs are identified from the literature: design, manufacturing, and administrative. Multiple item scales are developed to measure each type of AMT. These scales are shown to be reliable instruments, and are used to develop an empirical taxonomy which validates existing conceptual typologies of AMTs. A cluster analysis reveals four distinct groups of companies with respect to their approaches toward investing in AMTs. TRADITIONALISTS do not invest heavily in any of the three types of AMTs. GENERALISTS have moderate investments in each technology type. HIGH INVESTORS have the highest investment in each of the three technology types. The most interesting group may well be the DESIGNERS, which have low investments for manufacturing and administrative AMTs, but have the second highest investment in design-related AMTs. An analysis of the four technology groups reveals that while plants do differ in terms of plant size and integration, they do not differ significantly in terms of industry membership or performance. This suggests that successful firms can be found in each of the groups and that good strategies may be found that are consistent with each of these approaches. Therefore, the taxonomy is fairly robust, and further research must analyze companies within these groupings in order to identify the contingencies or other factors that may act in conjunction with technology to separate high and low performing firms. The data from our study clearly suggest that investments in technology alone are not a causal factor for performance improvement.

Information sharing, buyer‐supplier relationships, and firm performance: A multi‐region analysis

Purpose – The purpose of this paper is to examine the effects of information sharing capability on buyer‐supplier relationships and firm performance. It is proposed that information sharing capability, the integration of a firms information/decision systems and business processes with those of supply chain partners, is an antecedent of collaborative buyer‐supplier relationships, defined in terms of supply chain and relationship architecture. Further, it is proposed that these relationships positively impact a firms market and financial performance.Design/methodology/approach – This research uses multiple linear regression to analyze a set of survey data from the USA, Europe and New Zealand.Findings – Results demonstrate positive relationships between information sharing capability and buyer‐supplier relationships, and between relationships and performance.Research limitations/implications – Information sharing capability and buyer‐supplier relationships are complex, multi dimensional constructs. While t...

The impact of strategic operations management decisions on community hospital performance

Abstract Over the past decade, 10% of community hospitals have closed. In this challenging time, our study presents hospital administrators with some valuable information that can help improve community hospitals’ performance. The purpose of this paper is to develop a strategic operations management model that links long-term service choices, intermediate operations decisions, and hospital performance given the structural constraints of location, size, and medical teaching status. Data collected from 151 community hospitals are used to test the model. The research identifies strategic operations management decisions in the US community hospitals, shows their causal relationships, and identifies their effects on hospital performance. Specifically, we find that intermediate infrastructural operations decisions affect a community hospital’s cost, quality, and financial performance after the structural decisions of location and size have set the stage. Our study also reveals that community hospitals have adopted new staff and demand management decisions in response to the market needs.

Supply chain management practices as a mediator of the relationship between operations capability and firm performance

The current study uses mediated regression analysis and structural equation modelling to test the proposition that supply chain management practices mediate the relationship between operations capability and firm performance. Operations capability is defined in terms of a firms new product design and development, total quality management and just-in-time capabilities. Results support the research model and also suggest the existence of a direct relationship between operations capability and performance.

Supplier Selection Construct: Instrument Development and Validation

Purpose – To develop and test a reliable and valid supplier selection measurement scale that can be applied in different geographic regions, namely, the USA and Europe.Design/methodology/approach – A three‐factor supplier selection measure is developed via extensive literature review and practitioner interviews. Psychometric properties of the survey instrument are evaluated using data from the ISM‐US sample via exploratory factor analysis. Based on the results, the survey instrument is modified and the revised instrument is mailed to a larger sampling group (APICS‐US and APICS‐Europe). Confirmatory factor analysis is used to validate the proposed three‐factor supplier selection construct and to test its validity across national boundaries.Findings – This study demonstrates that underlying the documented supplier selection criteria is the need to assess a suppliers quality and service capabilities as well as its strategic and managerial alignment with the buyer.Research limitations/implications – Although...

The effect of location, strategy, and operations technology on hospital performance

Abstract Hospitals in the US are faced with challenges in how to compete and remain viable in an increasingly competitive environment. Using data from a primary survey of hospitals and from various secondary sources, we investigate the incremental effects on hospital performance of location, strategy, and technology. We find that hospital location is significantly related to performance, but that a hospital’s choice of strategy can moderate the effect of location. Additionally, we find hospitals that invest more extensively in clinical technologies tend to be better performers regardless of location. Hospital size, measured as number of beds, captures the effects of location and technology investment in accounting for a major portion of hospital performance. While we cannot argue that larger is always better for hospitals, mergers, partnerships, and other forms of consolidation currently observed in the marketplace indicate that managers in the hospital industry understand the advantage of size.

Manufacturing flexibility at the plant level

Managers have two basic alternatives for addressing the challenge posed by variable demand: (1) build manufacturing plants with excess capacity and /or stock excess goods in inventory to help smooth over fluctuations in demand, or (2) increase the flexibility of their manufacturing plants so that production can be varied more easily to match changes in demand. This paper focuses on the second alternative and examines two types of flexibility using two examples based on the automobile industry. First, process flexibility is defined as the ability of a single manufacturing plant to make more than a single product (in this case products are different car models), and its is shown that a limited degree of process flexibility is very valuable for dealing with variations in demand. Second, machine flexibility is defined in terms of a changeover cost, measured in terms of the capacity or production which is lost when a plant must produce more than a single car model. Machine flexibility is shown to have a moderating effect on process flexibility, but one which does not necessarily cancel out the benefits of process flexibility.