Roger W. Schmenner

On theory in operations management

Abstract The field of operations management has been criticized for the inadequacy of its theory. We suggest that this criticism may be too harsh, and further, that many building blocks of theory are prevalent in the body of existing research. This paper has two goals. The first is to suggest that careful organization of our thinking can lead to useful, productive theories in operations management that demonstrate all the hallmarks of the familiar theories of natural science. We discuss the nature of scientific inquiry in general terms, and examine the implications for what should be expected from theory in operations management. Our second goal is to illustrate through examples how such theories and their related laws might be developed. Two theories are proposed: the Theory of Swift, Even Flow, and the Theory of Performance Frontiers. The Theory of Swift, Even Flow addresses the phenomenon of cross-factory productivity differences. The Theory of Performance Frontiers addresses the multiple dimensions of factory performance and seeks to unify prior statements regarding cumulative capabilities and trade-offs. Implications drawn from the theories are discussed and concluding remarks suggest the advantages of future theory development and test.

Service Businesses and Productivity

The records of superior performance of selected service firms over many years suggest that they may be more productive than others. This article uses the Theory of Swift, Even Flow to explain why that might be true. In the process, this article improves Schmenners 1986 service process matrix. The redefinition of the axes of this matrix and of the resulting diagonal leads to enhanced understanding of productivity for service operations and helps to explain how some leading service companies have been able to sustain their competitive positions for decades.

Geographic differences and the location of new manufacturing facilities

Abstract This paper introduces two innovations to the empirical study of plant location: (1) division of the decision into stages, and (2) use of plant-specific characteristics to either magnify or temper factors defined at the state level. The plant-specific characteristics derive from a study of Fortune 500 plants that were opened in the 1970s. A number of relationships are derived from considerations of expected profitability that relate site selection to state and firm characteristics. These are tested through a series of multinomial logit models. The results confirm that the plant location decision can be usefully approached as a staged process and that geographically defined differences are not sufficient, by themselves, to explain why some states do better than others in attracting new plants. When plant-specific characteristics are used to modify the state-based factors, the explanation becomes much richer and more powerful.

Manufacturing, service, and their integration: some history and theory

Purpose – The purpose of this paper is to explain why the historical integration of manufacturing with service was quickly seen as advantageous in some circumstances, but not so in others.Design/methodology/approach – The paper reviews the history of manufacturing companies in the USA during the last half of the nineteenth century, categorizes them, and ties them to theory.Findings – The bundling of manufactured goods to downstream‐available services was led by companies with new products but with no great manufacturing strengths, as a way to establish barriers to entry. Companies with significant manufacturing capabilities were not as quick or as complete in their integration of manufacturing and service.Originality/value – This paper shows that servitization has antecedents that go back 150 years.

Manufacturing process flexibility revisited

Purpose – To provide an update on a paper published in 1987 in IJOPM.Design/methodology/approach – Provides an assessment and update of “An agenda for research on the flexibility of manufacturing processes”.Findings – Gerwins seminal work added welcome rigor to a concept, manufacturing flexibility, which had gained prominence during the previous decade. Finds that many of Gerwins insights have stood the test of time. A number of things have changed since that time, but others have remained much as they were. Machines have become more capable and computer‐based controls have improved machine and process flexibility, but the character of that flexibility has remained very much the same.Originality/value – Revisits Gerwins conceptualization of manufacturing process flexibility and subsequent progress in understanding it.

Performance Measures: Gaps, False Alarms, and the “Usual Suspects”

Using a two‐round Delphi process among 92 manufacturing managers from around the world, assesses the appropriateness of a variety of performance measures. The Delphi process used a survey technique that was pioneered by Dixon, Nanni, and Vollmann to highlight gaps (high perceived importance to the company but low weight in the performance measurement system) and false alarms (low perceived importance to the company but high weight in the performance measurement system). Direct cost reduction, machine efficiency, and labour efficiency are almost universally seen as false alarms. On the other hand, new product introduction, customer satisfaction, and employee involvement are frequently revealed to be gaps, although with less consistency. Cross‐industry comparisons are a distinctive feature of this research.

Multiplant manufacturing strategies among the fortune 500

Abstract This paper identifies and examines four distinct multiplant strategies prevailing within the nations largest manufacturing companies. These multiplant strategies govern the charters under which plants operate, thus helping to insure focused factory operations. Using detailed data drawn from over 300 plants, the paper reports on the apparent attractiveness of different strategies to different industry groups and singles out those specific plant characteristics which Fortune 500 plants attribute most often to each strategy. This information can aid in the assignment of plant charters, within company operating divisions.

International factory productivity gains

Abstract This paper analyzes influences on factory productivity gains by using detailed, consolidated, crosssectional survey data from 561 plants on three continents, and by using times series data from five plants of a single company (a major domestic auto maker). Some grand themes, all intuitively satisfying, surface in the regression results on both sets of data. Technology advance, throughput time reduction, work force involvement, quality, inventory reduction, and simplified organization all foster productivity gains. Furthermore, using data from another company (Square D), labor efficiency is debunked as a proxy for labor productivity; other forces are at play in influencing productivity gains. The breadth of the survey sample (United States/Canada, Europe, Korea) permits tests of two often-touted hypotheses. It is frequently proposed that location-related factors (e.g., culture, governmental policies) affect factory productivity. Careful examination of the statistical evidence, however, does not confirm this. Similarly, managers often state that process industry plants are more productive than nonprocess, more fabrication and assembly, plants. This assertion, too, is not confirmed by the statistical evidence. Other things being equal, process industry plants do not show productivity gains any greater than non-process industry plants.

The density gradient for manufacturing industry

Abstract This study employs a rich set of disaggregated manufacturing industry data to estimate density gradients for five metropolitan areas over the time span 1967–1971. The results are consistent with both expectations and with a number of other studies of industry location. More importantly, however, this study examines many of the methodological problems associated with the density gradient. It is concluded that the density gradient has reached the point of diminishing returns as a tool of the urban economist.

The rent gradient for manufacturing

Abstract Rent gradients for manufacturing are estimated using actual rent and value figures for Cincinnati. Distance to the city center is found to be of no importance in explaining rent or value variations.