Manoj K. Malhotra

Transaction cost framework in operations and supply chain management research: theory and measurement

Abstract Over the past decade, transaction cost theory (TCT) has received considerable attention from researchers in various disciplines of business. Unfortunately, the rich theoretical base of TCT has seen limited application in the operations and supply chain management research. This article seeks to change that by providing a cogent synthesis of TCT, its assumptions, constructs, and propositions. It also summarizes existing empirical work in management and other disciplines that draws from the TCT perspective and examines relationships in manufacturing organizations. A measurement model of transaction costs is subsequently presented using data from 203 manufacturing firms in the OEM electronics industry. Guidelines and recommendations for researchers are then presented regarding both the uses of the theory and its measurement. It is hoped that this study will stimulate work in the important areas of inter-firm relationships that draw from this rich but underutilized theoretical lens, and thereby add another perspective to the knowledge base in related areas of the operations and supply chain management fields.

Examining the Impact of Interorganizational Systems on Process Efficiency and Sourcing Leverage in Buyer–Supplier Dyads

Manufacturing firms are increasingly seeking cost and other competitive advantages by tightly coupling and managing their relationship with suppliers. Among other mechanisms, interorganizational systems (IOS) that facilitate boundary-spanning activities of a firm enable them to effectively manage different types of buyer–supplier relationships. This study integrates literature from the operations and information systems fields to create a joint perspective in understanding the linkages between the nature of the IOS, buyer–supplier relationships, and manufacturing performance at the dyadic level. External integration, breadth, and initiation are used to capture IOS functionality, and their effect on process efficiency and sourcing leverage is examined. The study also explores the differences in how manufacturing firms use IOS when operating under varying levels of competitive intensity and product standardization. In order to test the research models and related hypothesis, empirical data on buyer–supplier dyads is collected from manufacturing firms. The results show that only higher levels of external integration that go beyond simple procurement systems, as well as who initiates the IOS, allow manufacturing firms to enhance process efficiency. In contrast, IOS breadth and IOS initiation enable manufacturing firms to enhance sourcing leverage over their suppliers. In addition, firms making standardized products in highly competitive environments tend to achieve higher process efficiencies and have higher levels of external integration. The study shows how specific IOS decisions allow manufacturing firms to better manage their dependence on the supplier for resources and thereby select system functionalities that are consistent with their own operating environments and the desired supply chain design.

Business process reengineering: a tutorial on the concept, evolution, method, technology and application

Abstract It is ironical that while much is being discussed about business process reengineering (BPR), most companies are still searching for methods to better manage radical change. Academics are studying the phenomenon but precious little has been published. Many basic questions remain unanswered. What does reengineering involve? Are there methods for effectively accomplishing BPR? Why is it so popular? Is there a logic behind reengineering? Is BPR fundamentally different from old Taylorian approaches to industrial engineering based on task decomposition and specialization? Is BPR the same as TQM, restructuring, etc.? What is the relationship between process redesign and organizational structures? How do we best plan, organize and control BPR efforts? Under what conditions will BPR be most effective? Answers to these questions are neither easy nor direct. However, this tutorial seeks to address them in a systematic, comprehensive and unbiased manner. In doing so, the tutorial will attempt to synthesize a variety of material from both practitioner and academic literature sources into a coherent precis that defines and discusses BPR in a language palatable to both the manager and the academic. A variety of frameworks will be presented to clarify the nature of the phenomenon as prescribed (in theory) and as companies are learning about it (in practice). The objective of this tutorial is to inform rather than provide an academic discourse.

Assessing the impact of the manufacturing executive’s role on business performance through strategic alignment

Abstract Many researchers over time have stressed the importance of incorporating the manufacturing perspective in the formulation of business strategy. Prior work in this area has tended to focus primarily on the involvement of the manufacturing executive in strategic decision making processes, while relatively little attention has been given to the level of influence enjoyed by the manufacturing executives. This study jointly examines the role of both influence and involvement in achieving better business performance, which we posit is expected to occur through alignment between the organizational and manufacturing strategies rather than directly. A research model based on procedural justice and strategic information management literature is proposed to represent this phenomenon. Structural equation modeling is used to empirically test the research model and its related hypothesis on the basis of data collected from 202 senior manufacturing executives representing mid to large sized firms from diverse industry groups across the US. In addition, interviews with a sub-sample of respondents are used to further explore the contextual nature of these relationships. The results indicate that involvement and influence are indeed two different, but highly related, aspects of the manufacturing executive s role. The interviews revealed numerous differences between the two with respect to achieving each and individual benefits derived from them. As expected, both involvement and influence are important determinants of strategy alignment with influence appearing to play a more substantive role. More importantly, it is this alignment that affects business performance. Implications of our findings for improving manufacturing practice, along with possible avenues for future research directions in this area, are also provided.

Strategic Manufacturing Planning Systems and Their Linkage to Planning System Success

Academics and practitioners alike are focusing more attention on manufacturing strategy after having recognized the important role it plays in shaping the success of industrial firms. Even though research in this area has increased in the last decade, the focus of much of that work has been on the content rather than the process of the manufacturing strategy. Consequently, this study attempts to understand the important elements of the strategic manufacturing planning process and its effectiveness. Borrowing from the extant literature in the fields of strategic management and information systems, we propose a research model that relates strategic manufacturing planning system design to planning system success. Using structured questionnaires, empirical data is collected from over 200 manufacturing executives to test the model hypotheses. Planning process in manufacturing was found to be a bottom-up approach from a corporate or business perspective, which differs from the top-down planning process prevalent in strategic information systems planning process. Findings also indicate that greater planning system success in manufacturing is associated with a planning system that combines some “rational” elements (formality, comprehensiveness, control focus, longer horizon) with others that lend adaptability (wider participation and more intense interaction). But the strategic manufacturing planning system is more than just a collection of independent planning characteristics. Instead, it can be viewed as a gestalt planning system whereby planning characteristics move together in affecting overall planning system success.

Spanning the continuum between marketing and operations

Abstract We discuss here the importance of the marketing operations interface and our motivations in creating this special issue. We also evaluate and summarize the papers presented in this special issue, and present our observations on how the study of this interface has methodologically evolved over the course of years. Some of the dominant common themes emphasized in the six papers contained in this special issue were communication between operations and marketing, as well as the value of trust and harmony between these functional areas in improving firm performance. Based on these observations and extant literature in both disciplines, a simple framework that delineates broad areas of mutual interest and integration between these two functional areas is proposed. We finally outline a limited set of future research projects that lie at the interface of marketing and operations, and which can potentially be pursued by researchers in this domain in order to promote a better understanding of the interface.

Interorganizational System Characteristics and Supply Chain Integration: An Empirical Assessment

Some firms have gained significant benefits by effectively deploying interorganizational systems (IOS) to tightly couple operations with their supply chain partners. In contrast, other firms with IOS deployments have struggled to achieve this level of success. So it is not clear how such systems can be configured to promote idiosyncratic interorganizational processes that integrate the supply chains and facilitate successful outcomes. To shed further light on this issue, we draw from multiple theoretical perspectives to develop a comprehensive and unique conceptualization of IOS characteristics that goes beyond the limited treatment it has received in extant literature. Furthermore, we empirically examine the IOS configuration choices made by firms with different supply chain integration (SCI) profiles. Our results support the notion that successful firms sequence the configuration of IOS characteristics toward effectively developing and supporting their supply chain process capabilities. In particular, we found that firms at the lower end of SCI configure IOS features to support supplier evaluation and automatic alerts. As organizations move to the upper end of the SCI spectrum, greater attention is paid to features associated with systems integration, planning, and forecasting. Recommendations to managers and academics stemming from our study are provided, along with avenues for future research.

Trade-offs among the elements of flexibility: a comparison from the automotive industry

Flexibility has long been recognized as a manufacturing capability that has the potential to impact the competitive position and the business performance of an organization ([1]: Cox Jr, T. Toward the measurement of manufacturing flexibility. Production and Inventory Management Journal 1989; First Quarter:68-72, [2]: De Meyer A, Nakane J, Miller JG, Ferdows K. Flexibility: the next competitive battle. Strategic Management Journal 1989;10:135-144). This recognition, however, has not led to a unanimous approach to flexibility. For example, Japanese manufacturers emphasize flexibility more than North American or European manufacturers ( [2]: De Meyer A, Nakane J, Miller JG, Ferdows K. Flexibility: the next competitive battle. Strategic Management Journal 1989;10:135-144). While this finding provides insight into the strategic choices made by these organizations in these countries, it does not provide an in-depth comparison of specific aspects of flexibility that are leveraged and emphasized differently. Such a comparison is necessary, however, if flexibility is to be more fully understood. This paper takes a step in that direction by first breaking down the concept of flexibility into its constituent elements and dimensions. Then we introduce the notion of looking at flexibility as a capability that must be planned for and built by a firm over a period of time along these constituent elements and dimensions. Questions are subsequently raised regarding whether trade-offs occur among different elements for a given flexibility dimension. We use industry wide as well as firm-specific qualitative data from the automotive industry to answer these questions, and show that several key aspects of manufacturing flexibility have been acquired and leveraged differently by American and Japanese producers. While linkages to business performance are not directly explored, our analysis reveals that even within the same industry, firms from different countries do indeed follow different strategies to developing their flexibility capability. Implications of these results for managerial practice, along with avenues for further research in this area, are also presented.

Machine dedication and process flexibility in a group technology environment

Abstract This study investigates changes in inventory and customer service performance of a job-shop that desires to adopt a Group Technology (GT) philosophy in its shop floor operations. Simulation methodology is pursued to explore tradeoffs in shop performance between the routing flexibility of non-dedicated machines in a functional job-shop and the setup efficiency of dedicated machines in shops that have machine cell layouts. Further, traditional and GT-based scheduling procedures are investigated in these different shops to determine the conditions under which a GT philosophy may be profitably employed only in layout decisions, only in scheduling decisions, or in both layout and scheduling decisions. Results from this study show that shop layout choice is not a simple decision that can capitalize either on the high routing flexibility of the functional job-shop or on the setup efficiency advantages of a cell shop. The tradeoffs between routing flexibility and setup efficiency must be made carefully. The impact of demand variability on performance is also dependent on the type of layout. In general, product volume variability more adversely affects the performance of functional job-shops, while product mix variability has greater impact on the performance of cell shops. Finally, sensitivity analysis is performed to show that maintaining balance between the utilization of machines is a major determinant of performance, and consequently the best layout.

The relationship between technology and performance: a meta-analysis of technology models

The effective deployment of technology within an organizational context is of integral concern to fields associated with the management sciences. While there has been significant study of technology effectiveness, it is often piece-meal as diverse models are hypothesized and empirically tested. This paper attempts to examine the models purporting to study the fundamental question of effective use of technology. Models examining the technology-performance relationship are summarized and meta-analyzed in an attempt to provide a more integrated perspective of technology and the factors that interact with it to enhance performance at the individual, process, or organizational level. The models are evaluated on their common dimensions, and insights for further research are identified. A research plan, along with a research model, is proposed with the hope of facilitating future work in this area of imminent and growing importance.