Rachna Shah

Lean manufacturing: context, practice bundles, and performance

Management literature has suggested that contextual factors may present strong inertial forces within organizations that inhibit implementations that appear technically rational [R.R. Nelson, S.G. Winter, An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, MA, 1982]. This paper examines the effects of three contextual factors, plant size, plant age and unionization status, on the likelihood of implementing 22 manufacturing practices that are key facets of lean production systems. Further, we postulate four “bundles” of inter-related and internally consistent practices; these are just-in-time (JIT), total quality management (TQM), total preventive maintenance (TPM), and human resource management (HRM). We empirically validate our bundles and investigate their effects on operational performance. The study sample uses data from IndustryWeek’s Census of Manufacturers. The evidence provides strong support for the influence of plant size on lean implementation, whereas the influence of unionization and plant age is less pervasive than conventional wisdom suggests. The results also indicate that lean bundles contribute substantially to the operating performance of plants, and explain about 23% of the variation in operational performance after accounting for the effects of industry and contextual factors.

In pursuit of implementation patterns: the context of Lean and Six Sigma

Combining Lean practices with Six Sigma has gained immense popularity in recent years. Whether a combined Lean-Six Sigma approach is the latest management fad, or leads to significant performance benefits that exceed isolated implementation is not yet apparent. Using implementation and performance data from a sample of 2511 plants, the research study attempts to uncover associative and predictive pattern of implementation between 15 Lean practices and the Six Sigma program. Our results indicate two major findings. First, implementation of any practice from a broader set of Lean practices improves the likelihood of implementing Six Sigma. Additionally, practices commonly bundled under quality management predict and distinguish the group of plants implementing Six Sigma extensively from non-implementers. Second, the regression results indicate a significant difference in the performance levels of the Six Sigma implementers group compared with the non-implementer group. These preliminary results are a first step towards separating fact from fiction.

Linking Work Design to Mass Customization: A Sociotechnical Systems Perspective*

Mass customization has gained increasing importance in recent years due to its ability to provide customized products efficiently and effectively, and manufacturing companies are continuously searching for ways to develop their mass-customization ability. Despite extensive literature focusing on mass customization, few studies have systematically examined the impact of work-design practices on a companys mass-customization ability. Using the Sociotechnical Systems theory as a foundation, we link work-design practices with mass-customization ability, specifically identifying ten work-design practices and examining their impact on mass-customization ability using survey data and empirical research methods. The results support our hypothesized links and suggest that work-design practices that manage both the technical and the social dimensions for achieving organization success have significant impact on a companys ability to achieve mass customization.

Explaining Anomalous High Performance in a Health Care Supply Chain

An implicit assumption in distributing and coordinating work among independent organizations in a supply chain is that a focal organization can use financial or contractual mechanisms to enforce compliance among the other organizations in meeting desired performance objectives. Absent contractual agreement or financial gain, there is little incentive for independent organizations to coordinate their process improvement activities. In this study, we examine a health care supply chain in which the work is distributed among independent organizations. We use a detailed case study and an abductive reasoning approach to understand how and why the independent organizations choose to coordinate and collaborate in their work. Our study makes two contributions to the literature. First, we use well-established lean principles to explain how independent organizations achieve superior performance despite highly uncertain and variable customer demand—a context considerably different from the origins of lean principles. Second, we forward relational coordination theory to explain why the organizations in this decentralized supply chain coordinate their work. Relational coordination includes the use of shared goals, shared knowledge, and mutual respect for one anothers work as primary mechanisms to explain process improvement in the absence of any contractual incentives. Our study constitutes a first step in generating theory for work design and its improvement in decentralized supply chains.

Competitive Priorities, Plant Improvement and Innovation Capabilities, and Operational Performance: A Test of Two Forms of Fit

Purpose – Examining the strategic contingency of plant improvement capability and innovation capability. Two forms of fit between the two capabilities and competitive priorities were empirically tested. Design/Methodology/Approach – Data collected from a sample of 238 manufacturing plants were used to test the hypotheses using regression. Findings – The results provide partial support for fit as mediation. However, there was no evidence supporting fit as moderation. We found that improvement capability and innovation capability are associated with different competitive priorities and also have varying impact on different operational performance dimensions. Research limitations/implications – There are two limitations to this research: only three operations management (OM) practices are included in each capability examined; somewhat limited measures of competitive priorities and operational performance.Originality/value – This study examines multiple forms of fit between competitive priorities and operations capabilities. The findings can inform managers to selectively implement OM practices for developing the needed operations capabilities given the chosen competitive priorities.

The relationships among functional integration, mass customisation, and firm performance

Previous literature has extensively investigated the impact of supply chain integration on mass customisation and plant performance, but little research has been conducted to examine the impact of functional integration within the focal firm on mass customisation and plant performance. This article seeks to demonstrate this impact theoretically and empirically. Organisational information processing theory and the resource-based view of the firm are used to relate functional integration, mass customisation, and plant performance. Structural equation modelling is applied to analyse a conceptual model with survey data collected from 266 manufacturing plants. The results indicate that functional integration has a significant positive impact on mass customisation and operational performance. Mass customisation partially mediates functional integrations impact on operational performance. Results also indicate that mass customisations impact on customer satisfaction is not direct. Rather, the relationship is fully mediated by operational performance. Managerial implications of these research findings are discussed.

Managing demand and supply uncertainties to achieve mass customization ability

Purpose – Managing demand and supply uncertainties is critical for all manufacturers, but it has added importance for companies that intend to achieve mass customization (MC) ability because these uncertainties are an intrinsic characteristic of MC. The purpose of this paper is to investigate how managing uncertainties in a firms demand and supply affects its MC ability.Design/methodology/approach – Regression analysis and analysis of variance (ANOVA) are conducted on data collected from 189 manufacturing plants to empirically test two hypotheses.Findings – Both demand and supply uncertainty management have a positive impact on a companys MC ability. However, managing either demand or supply uncertainties independently of the other is not enough to achieve MC ability; instead, a company needs to concurrently manage both demand and supply uncertainties to achieve MC ability.Originality/value – The current literature lacks a sound theoretical basis to link demand and supply uncertainty management with MC ...

When to Mass Customize: The Impact of Environmental Uncertainty*

Previous research on mass customization (MC) has focused on what it is and how it is implemented. In this study we examine when MC is an appropriate strategy for firms to follow by scrutinizing the effects of three environmental uncertainty variables (demand uncertainty, competitive intensity, and supply chain complexity) on the MC–performance relationship. Specifically, we distinguish the direct effect of environmental uncertainty on MC ability and the moderation effect of environmental uncertainty on MC abilitys impact on customer satisfaction. We examine six competing hypotheses using data collected from 266 manufacturing plants. Our results show that competitive intensity has a direct positive impact on MC ability. However, demand uncertainty moderates the relationship between MC ability and customer satisfaction, and the direct and positive relationship between MC ability and customer satisfaction holds only when customer demand is highly uncertain. Supply chain complexity neither has a direct relationship with MC, nor moderates the MC–performance relationship. Implications of these research findings are discussed and future research directions are identified.

When to mass customize

Previous research on mass customization (MC) has focused on what it is and how it is implemented. In this study we examine when MC is an appropriate strategy for firms to follow by scrutinizing the effects of three environmental uncertainty variables (demand uncertainty, competitive intensity, and supply chain complexity) on the MC–performance relationship. Specifically, we distinguish the direct effect of environmental uncertainty on MC ability and the moderation effect of environmental uncertainty on MC abilitys impact on customer satisfaction. We examine six competing hypotheses using data collected from 266 manufacturing plants. Our results show that competitive intensity has a direct positive impact on MC ability. However, demand uncertainty moderates the relationship between MC ability and customer satisfaction, and the direct and positive relationship between MC ability and customer satisfaction holds only when customer demand is highly uncertain. Supply chain complexity neither has a direct relationship with MC, nor moderates the MC–performance relationship. Implications of these research findings are discussed and future research directions are identified.

Do Plant Inspections Predict Future Quality? The Role of Investigator Experience

Plant inspections enable firms to manage their quality risk in global supply chains. However, surprisingly little research examines the relationship between such inspections and future product quality. In this paper, we study how well plant inspection outcomes predict the hazard of a future recall and analyze how investigator experience affects this predictive relationship. Using secondary data spanning a seven-year period in the medical device industry and a recurrent-event Cox proportional hazard model, our analysis shows that inspection outcomes reliably predict future product recalls. However, inspection outcomes become an unreliable predictor of recalls with an increase in site-specific investigator experience. Through post hoc analysis, we also show that the hazard of a recall at a plant increases with site-specific experience, independent of the inspection outcome. Compared to the first visit by an investigator, the recall hazard increases by 21% the second time the investigator visits a specific p...