Paul M. Swamidass

Explaining manufacturing technology use, firm size and performance using a multidimensional view of technology

Abstract This study examines the relationships among the variables Advanced Manufacturing Technology (AMT) use, Firm Size, and Performance in US manufacturing firms using a multidimensional definition of AMT. The studys four major findings are based on empirical analyses of survey data collected from 160 manufacturing firms. First, evidence indicates that there are at least four dimensions of AMT including: Information Exchange and Planning Technology (IEPT), Product Design Technology (PDT), High-Volume Automation Technology (HVAT), and Low-Volume Flexible Automation Technology (LVFAT). This brings to light a key difference between the literature and the four empirically determined dimensions of AMT: empirical dimensions include two distinct dimensions for shop floor technology while most conceptual schemes do not. Second, AMT use across three of these dimensions increases linearly as firm size increases logarithmically; however, the use of some dimensions of AMT increase more rapidly with firm size than others. Third, AMT use does not show any direct impact on firm performance. Finally, firm size weakly moderates the AMT-performance relationship; perhaps, due to their superior resource base, larger firms are able to use AMTs more effectively.

Evolving forms of manufacturing strategy development:evidence and implications

This paper outlines, using evidence from several case studies, the use of alternative forms of manufacturing strategy processes. Our investigation shows that the manufacturing strategy development practices of manufacturers are evolving in many directions; we found several alternatives to the formal top-down planning process. Manufacturers use one or more of the following alternatives with or without the top-down manufacturing strategy process: a coherent pattern of actions; manufacturing/process improvement programs; or the pursuit of core manufacturing capabilities. It appears that the various manufacturing strategy development processes may be tied to the strategic role of manufacturing in a company. This paper offers a framework that captures the relationship between the strategic role of manufacturing and the process of manufacturing strategy development. An in-depth case from a UK company illustrates the evolving forms of manufacturing strategy development processes.

The effect of TPS on US manufacturing during 1981–1998: inventory increased or decreased as a function of plant performance

More than 14 000 firm years of data (average number of firms per year times 18 years) were processed to investigate the effect of Toyota Production System (TPS) in high and low performing firms. This is a longitudinal study of the records of US manufacturing firms operating for the entire duration of 18 years from 1981 to 1998. Using industry data from COMPUSTAT† files, manufacturing firms covered by SIC 3400–3900 were ranked on performance. Evidence from the ranked companies shows that the ratio TI/S ((total inventory)/(sales)) declined significantly in the top and middle performers (top 10% and middle 10% in performance). In contrast, the study discovered that firms making the bottom 10% showed an unhealthy “inventory growth” trend in TI/S during 1981–1998; the better performers got better, and the weak performers got weaker with time. This discovery of the unwanted and unexpected growth in TI/S in bottom performers opens many new avenues for research stemming from questions such as: what is the source of the “inventory growth” problem in low performing firms in industries widely embracing TPS? How could the OM profession address the inventory growth problem facing low performers? †The Standard and Poors Corporation publishes COMPUSTAT electronic files. The COMPUSTAT database of fundamental financial and market information provides extensive coverage of the North-American marketplace. The database contains thousands of companies and hundreds of financial data items collected from a wide variety of sources including news wire services, news releases, shareholder reports, direct company contacts, and quarterly and annual documents filed with the Securities and Exchange Commission.

Modeling the adoption rates of manufacturing technology innovations by small US manufacturers: a longitudinal investigation

This study provides conclusive evidence to support the view that small plants are slower than larger plants to adopt manufacturing innovations. This empirical study based on over 1000 US manufacturing plants engaged in producing discrete products, studies the adoption of manufacturing technologies in small plants relative to large plants between 1993 and 1997. Under the assumption that small manufacturers are disadvantaged, several federal and state programs have been created to assist small manufacturers in acquiring and adopting manufacturing innovations. Through quantification of technology adoption in small manufacturing firms, this study’s findings reveal which manufacturing innovations are in greater need of governmental assistance programs. While small plants are making progress over time in catching up with larger plants in computerized technology use, they are not making similar progress in adopting manufacturing technology innovations in soft technologies. Several propositions for future research and recommendations for public policy are offered.

The role of manufacturing and market managers in strategy development: lessons from three companies

According to researchers and managers, there is a lack of agreement between marketing and manufacturing managers on critical strategic issues. However, most of the literature on the subject is anecdotal and little formal empirical research has been done. Three companies are investigated to study the extent of agreement/disagreement between manufacturing and marketing managers on strategy content and process. A novel method permits the study of agreement between the two different functional managers on the process of developing strategy. The findings consistently show that manufacturing managers operate under a wider range of strategic priorities than marketing managers, and that manufacturing managers participate less than marketing managers in the strategy development process. Further, both marketing and manufacturing managers show higher involvement in the strategy development process in the latter stages of the Hayes and Wheelwright four-stage model of manufacturing’s strategic role.

Employee Involvement, Attitudes and Reactions to Technology Changes:

This research examines the relationships between employee reactions to specific technological changes and the job-related attitudes of these employees. The specific changes include the transition, by the organizations clinical professionals, from the use of laptop computers to smaller palm-sized clinical assistant (CE) devices and the automation of clinical pathways into the computerized documentation system. Both technological changes were implemented with the intent of increasing the efficiency of the clinical professionals. Results of this longitudinal study indicated that individuals involved in making decisions related to the technology changes reacted more positively to the changes than individuals with low levels of involvement. Further, the results of this study revealed that individuals with higher pre-change levels of role ambiguity reacted more negatively to the technology changes.

Empirical models of the effect of integrated manufacturing on manufacturing performance and return on investment

The effect of integrated manufacturing on non-financial manufacturing performance and return on investment is studied. Technology-use data from over 1000 manufacturing plants in the USA were used to test empirically the relationships between variables integrated manufacturing, non-financial manufacturing performance and return on investment. Notable findings were (1) integrated manufacturing shows a strong effect on non-financial manufacturing performance and (2) non-financial manufacturing performance has a statistically significant direct effect on return on investment. It is recommended that the justification of investments in manufacturing technologies that contribute to integrated manufacturing must be based on non-financial manufacturing criteria as well as on return on investment. Using two different models, it is shown that the causal model developed in the study is robust.

What top management thinks about the benefits of hard and soft manufacturing technologies

Each year, billions of dollars are spent by U.S. manufacturers to acquire hard and soft manufacturing technologies. Hard technologies are bundle of equipment, computer hardware and software such as computer numerical control, computer-aided manufacturing, robots, etc. In contrast, soft technologies are manufacturing techniques and know-how such as just-in-time, total quality management, statistical quality control, etc.- hardware is not essential to their successful use but can enhance their scope and effectiveness. This large empirical study of 1042 U.S. manufacturing plants develops a model to study the impact of manufacturing technology use on various performance measures; this study provides first evidence from the field that soft manufacturing technologies have many times the measurable effects of hard technologies on product, process, and business performance. Further, the effects of technology use are enhanced by the skilled use of technology. Implications for research and public policy are addressed. This paper has found that, in the opinion of top management in manufacturing firms, soft technologies have an impact on 1) shop floor performance; 2) product line breadth; and 3) growth and profitability. These finding should make the investment in soft technologies easier to justify. If top management controls the purse, and if it sees a link between investment in soft technology and tangible benefits in these three areas, getting top management to invest in soft technology should be easier. Before deciding on requests for investments in soft technologies, we hope top managers would seriously consider the findings of this paper.

Exploring larger biotech research firm strategies: Projections from a comparison of small and larger firms

Abstract This is an exploratory study of larger biotech firms using insights from a head-to-head comparison of 49 small and 17 large U.S. biotech firms using archival data. We found small and large biotech firms to be significantly different from each other on R&D intensity and funding strategies. The findings are used to project and hypothesize about larger biotech firm growth strategies. Whereas R&D expenses in the small firms exceed total income by a wide margin, larger firms are able to cover most, if not all, of their R&D expenses. Thus, the larger firms are relatively more financially viable. Results also show that the larger firms derive a greater proportion of their revenues from collaborative research agreements (CRAs), which has key implications for revenue growth in these firms. Based on the findings we project R&D expenses and collaborative research revenues for biotech firms as they grow in size.

An examination of the use of manufacturing technologies and performance implications in US plants with different export intensities

1 In theory, competition improves productivity and performance; trade liberalisation, which increases imports/exports, brings more competition. Using two large-scale survey responses from over 1000 manufacturers collected during two different time periods while US exports were growing in an environment of trade liberalisation, this study examines the effectiveness of technologies, over time, in manufacturing plants with varying export intensities. We find manufacturing technology use increases with exports and exporters report significant gains in plant performance over time. The study considers hard technologies (i.e. technologies involving capital-intensive equipment in manufacturing operations) and soft technologies (i.e. technologies involving planning and administrative components) to understand the distinct dynamic impact of the use of these technologies among plants exporting with varying intensities. Manufacturing plants are categorised into high, medium, and non-exporting based on the plant’s exports as a percent of total output. The results of this study indicates that exporters engage in more skilled use of these technologies than non-exporters. Further, exporters not only have higher skilled use of manufacturing technologies from non-exporters, but they also expand the scope of technologies that they skillfully employ in their operations. We find that over the course of liberalised trade regime, medium exporters get closer to high exporters in their skilled use of manufacturing technologies providing evidence of learning effect from exporting. Finally, higher skilled use of manufacturing technologies by high exporters translates into lower rejects and shorter lead times. However, non-exporters were not able to gain similar benefits from using manufacturing technologies.