Success factors in manufacturing

Success Factors in Manufacturing.

Aleda V. Roth and Jeffrey G. Miller

0 ver the past decade, academics and practitioners alike have concluded that manufacturing matters. It matte?3 to the

economv ,I as a whole, and it matten to the business to which it belongs. The belief that manufacturing is an important ingredient in corporate and national success has spurred the development of manufacturing strategies in firms seeking competitive advantage around the world. And yet, our understanding of how manufacturing strategies create competitive capabilities and’*profits is weak.

To what extent can a common set of success factors in manufachlring be found that are linked to overall business performance? To tackle this question, we describe a series of relationships between manufacturing capabilities and business unit performance. We also determine the ele- ments of manufacturing strategies that are systematically found in successful businesses.

Using data obtained from a broad base of North American manufacturing executives, we found that successful manufacturing firms con- centrate their efforts on a few critical factors, and systematically avoid others. Our study also re- veals that superior manufacturing only improves the odds of relative business unit performance. It is up to general management to seize the oppor- hmities generated by a manufacturing function that employs these success factors.

BUILDING SUCCESS THBOUGH MANUFACTURING

G ood manufacturing does not necessarily lead to positive business outcomes, and positive business outcomes are not al-

ways associated with effective mgnufacturing. It is quite possible for a Firm to be successful with a bad manufacturing strategy, and fail with a good one. In other words, manufacturing matters, but not unconditionally. Figure 1 outlines the condi-

tions upon which economic outcomes are related to manufacturing excellence. Here, manu- Manufacturing und facturing strategy is related to three different types of perforniance

management ure linked together-

measures: l Relative Manufac- and to performance

ttwing Capabilities: measures of the business

excellence, unit’s manufacturing I

strength relative to its primary competitors in quality, delivery dependability, flexibility, and the ability to compete with low prices.

l Relative Managerial Success: executive management’s ability to use manufacturing capabilities and those of other functional areas to achieve business unit goals and targets.

l Economic Performance: absolute business unit outcomes, including return on assets (ROA) and profitability.

Figure 1 shows that the linkage between manufacturing strategy and business performance is indirect. The first level of performance outcomes affected by manufacturing are the relative competitive capabilities developed because a particular manufacturing strategy is implemented. To link manufacturing to overall business performance, the business unit must be able to exploit these capabilities.

Managerial success, in terms of meeting goals, is influenced by both manufacturing capabilities and those of other functional areas. The broader the range of capabilities managers can bring to bear on the competition, the more chances they have to succeed. A glimpse into the new world of manufacturing capabilities can’t explain everything, however. The ability of executive management to exploit these capabilities effectively is clearly important to winning in the marketplace.

Success Factors in Manufacturing 73

Figure 1 Linking Manufacturhg Success Factors and Business Performance

Manufacturing Strategy Manufacturing Success

Relative Manufacturing Competitive Capabilities

l Quality 9 Flem’bility l Delivey

l cost

f

Managerial Success I

Other Functional Capabilities and Strengths

Business Unit Managerial

Performance

Economic Performance Outcomes

Relaiive to Goals I (ROA/ProJitabili@

Note: Theperformamce outcomes are indicated in box-, and tbefacton that affect them in ovak.

Absolute economic outcomes, such as ROA and profit margin, are dependent not only on managerial success, but also on the Firm’s exter- nal environment. For example, the chemical and paper industries enjoyed a very favorable market environment in the late 1980s in the U.S., while computer and automotive manufacturers faced more turbulent market conditions. Adverse environmental conditions can dampen high levels of economic performance even in the best-managed companies.

LINKING MANAGERIAL SUCCESS AND ECONOMIC OUTCOMES

C ompanies in this study were classified into one of two groups on the basis of the degree to which they met their busi-

ness unit goals. We labeled these two groups as managerial “Leaders” and “Laggers.” Figure 2 shows how the typical members of each group met their business unit goals over five performance areas. Not surprisingly, Figure 2 illustrates

that on average, the Leaders generally surpassed their goals, whereas the Laggers tended to fall short of business expecta- tions.

Table 1 Economic and Other Business Outcomes by Managerial Performance Group

BUSIh%-SS OUTCOMES Annual Sales Revenue ($million> Net Pretax Profits (% of Sales) Research & Development (% of Sales) Unit Growth Rate in Sales (%) Pretax Return on Assets (ROA o/o>+ Market Share of Primary Product (%)

p.10 ‘pc.005

TOTAL SAMPLE LAGGERS LEADERS

<Average Absolute Performance) $711.0 $755.9 . $703.4

9.9% 7.8% 11.4% 4.1% 4.3% 3.6%

10.0% Em% 10.9% 20.2% 12.8% 23.6% 37.4% 39.4% 35.1%

It is logical to expect that managers who are more likely to meet their overall business unit goals will also generate higher economic returns than those who do not. Our data support the conclusion that Leaders also fare better than Laggers on absolute economic outcomes, expressed as profits and ROAs. Table 1 shows the managerial performance of Leaders and Laggers

74 Business Horizons /July-August 1992

over various economic and other quantitative measures collected in the survey.

The Leaders’ economic performance, regard- less of the industry to which they belong or the size of their organizations, translates into a 23.6 percent ROA, nearly double that of the Laggers’ 12.8 percent ROA. Weaker evidence exists for group differences on the average net pretax profitability-11.4 percent for the Leaders in contrast to 7.8 percent for the Laggers. As might be anticipated because of environmental factors influenc- ing different industries, the average profitability and ROAs varied substantially by industrial sec- tor. We found no significant interaction between industry and managerial performance. Therefore, the observed linkage between managerial performance and economic outcomes persists no mat- ter the industry to which the business unit belongs.

It is interesting that no great differences exist between performance profiies of the Leaders and Laggers on annual sales revenues, R&D expenditures, market shares, and growth rates. We found, however, that sales revenues and R&D expenditures seem to be a function of industry conditions. Whereas absolute economic success in certain industries may be influenced by sales and R&D investments, Table 1 shows that they are not significantly associated with the ability of a management team to meet its goals.

MANAGERIAL SUCCESS AND MANUFACTURINGCAPABILITlES

F igure 1 suggests that greater manufacturing capabilities contribute to higher levels of managerial success. The rationale be-

hind this proposition is that executive managers in firms with high levels of manufacturing capabilities have more options to play with in meeting their overall business goals and objectives. All things being equal, excelling at manufacturing improves the odds of being managerially successful, which in turn improves the odds of having good economic outcomes.

We examined the linkages between manufacturing success and managerial success in two ways. First, we assessed the relative manufacturing capabilities of Leaders and Laggers over each of the five dimensions of competitive capabilities. Second, we found three groups of business units with different levels of strength in manufacturing performance.

Figure 3 highlights the results of the first inquiry. On every competitive capability dimension, the Leaders’ manufacturing prowess domi- nated that of the Laggers. Business units with 1 superior manufacturing capabilities are more likely to meet or exceed their goals. Although we found no statistical differences between Leaders

Success Factors in Manufacturing

Figure 2 Managerial Performance ProAles

After-tax Profitability l

\

\

\

Overall

Performance l

Return on Assets (ROA) l

\

LAGGERS I

I

-+I LEADERS

I I

\

\

1

Overall \

Customer l

Satisfaction. I

I

I

Market Share I of Primary l

1

Product 1 2 3 4 5 6 7 Below Goal Goal Led Aboue Goal

Average Business Unit Performance Relative to Goals

l Signijkanl alp c .OOl level

L

and Laggers on their overall quality capabilities, our findings do not in any way mitigate the irn- portance of quality for manufacturing. Quality is a necessary but not a sufficient prescription for competing in the 1990s.

In sum, U.S. business unit Leaders are competing on a number of competitive capabilities simultaneously, deriving visible synergies from their combined strength. For the Leaders, our study does not provide empirical support for the “trade-off” theory of manufacturing strategy. This theory holds that manufacturers cannot perform well on a number of capabilities at the same time, so they must make trade-offs among strategic objectives of cost, quality, flexibility, and dependability. While the Leaders demonstrate superior manufacturing capabilities across the board, they also possess varying degrees of strength on each performance criteria. That is to say, not all manufacturing capabilities are equal.

Equally important, the pattern generated by the capability profiles (Figure 3) supports the

75

n Le:1tler

1 ‘Market Scope

‘Price

Figure 3 Relative Competitive Capabilities of Managerial Leaders and Laggers

cumulative theory of capahility clevelopment in manufxturing. The cumulative theory predicts that for lasting improvements in manufacturing, quality capabilities must come first; then quality and delivery; then quality, delivery. and flexihil- ity; and finally all the prior three plus cost. Our

results, illustrating business performance and capabilities, provide an enhanced view of the incremental yet simultaneously developed hierarchy of capabilities among successful and unsuc- cessful firms. Differential capability development along the competitive hierarchy is distinctly chat-- acteristic of world-class manufacturers.

In addition to examining the competitive capabilities of Leaders and Laggers on a one-hy- one basis. we focused on how superior nianufac- turing capalIilities across the board are associated with managerial success and economic outcomes.

Table 2 Relating Business Unit Performance and Manufacturing Success (Average ROAs)

IIUNAGERIAL GROUP Laggers Leaders

II/IAN~IFACTU~ING GROLP Weaklings Micldlenien Superstars

13.1% 8.8”h 13.8% 22.5% 12.4% 26.6%

Three types of manufacturing performance groups were found: “Weaklings,“ “Miclcllernen.” and “Superstars.” These groups respectively ac- counted for 46 percent. 13 percent, and 41 percent of the business units in our sample.

Figure 4 profiles each manufacturing performance group’s aggregate competitive capabilities. ancl implicitly accounts for the strategic role fo1 manufacturing within each. For the Weaklings, whose capabilities just meet the competition, the role of manufacturing is to maintain competitive parity. The Superstars. who manifest outstanding competitive capabilities. have a role that offers the business unit a I3roacler array of strategic options and more agility because of their manu- facruring superiority. The h4iddlemen are target- ing specific capabilities. On average, the Middle- men’s profile was similar to the Superstars on quality. Flesihility, and market scope, whereas their capabilities lagged on tIelively and price. Importantly, n.e found no statistical evidence that the manufacturing groupings were a result of the industry to \vliich the husiness unit helonged.

A cross-tal~,ul:ltion of business units according to their classification hy managerial success criteria and manufacturing capabilities. respectively. sh0n.s that ahouf 61 percent of the manufacturing Weaklings n’ere also founcl 10 he managerial Laggers, whereas 71 percent of the nianufrlcturing Superstars were managerial Leaders. bliclcilenien were almost evenly split on their managerial performance. As we had predicted. strong manufacturing capabilities seem to enhance an esecutive management team’s ability to meet its goals.

Table 2, nbich uses ROA as a financial IX- rometer, demonstrates that economic returns are highest for those who score high as holh nianu- facturers and managers. Table 2 also illustrates that ROAs were substantially lower for weak manufacturers in businesses with weak management. Being mediocre as a manufacturer (a Middleman) appears to offer no clearcut financial aclvantage. The surprise is that the economic returns of very good managers (Leaders) are high, even when the organization is weak from a manufacturing point of view. Being good at manufacturing helps, but it does not guarantee that executive management will effectively meet its goals or produce high returns. In retrospect. this all makes good common sense. However, the finding helps clarify the debate over how much manufacturing rnalters.

Superior manufacturing capabilities provicle an opportunity for business success, hit it is up to executive management to seize the opportunity. The requirement for executive level involve- ment is partly clue to the Fact that capability de- ployment involves a significant clegree of cross- functional and collective skills, “a small part of many people’s jobs, not a large part of a few”

(Stalk et al. 1992). Executive managers must be careful not to squander the potential that exists with a well-executed manufacturing strategy, and exercise the leadership required to leverage competitive capabilities for business success.

Given a choice between being a great executive and a world-class manufacturer, the data suggest that the former is preferable. Our data put the relative importance of executive leadership in perspective. Most manufacturing companies still need to clarify this point. Fortunately, great manufacturing is within the reach of great leaders. Superior levels of manufacturing competence are attainable by manufacturing organizations if executives exercise the right success factors in their manufacturing choices. There is no doubt that being a manufacturing Superstar significantly increases the odds for both executive management and economic success.

FACTORS FOR MANUFA CTURING SUCCESS

G iven the relationship between manufacturing success and managerial performance, how do manufacturing choices

contribute to developing superior competitive capabilities? What are the success factors driving Superstar capabilities, and what might the Weak- lings be doing wrong? An analysis was perfd?med to determine how each of the seven manufacturing strategy success factors, defined in Figure 5, best differentiates manufacturing Superstars from Weaklings. Because manufacturing success factors have the potential for being industry dependent, our analysis controlled for an industry ef- fect.

Three success factors were found to build manufacturing capabilities: resource improvements, quality management programs, and advanced process technology. Two potential success factors, restructuring and information systems, were inversely associated with manufacturing strength. These two manufacturing strategy choices were not being emphasized by Superstars but were choices of manufacturing Weaklings. Notably, neither materials flow programs nor capacity upgrade activities predicted manufacturing capabilities in this sample. This, in part, can be attributed to the considerable time lag required to implement and determine the benefits of changing production processes and capacity.

Total Factor Resource Improvements. One of the greatest predictors of Superstar capability was making total factor resource improvements in manufacturing. Care and nurturing of the entire manufacturing environment is the strongest overall predictor of manufacturing ’ strength. This infrastructural dimension is con- cerned with aligning and maintaining the socio- technical factors of production, including main-

Success Factors in Manufacturing

Figure 4 Manufacturing Capability Profiles by Group

Delivery’

MIDDLEMEN ’

I

Market Scope’ WEAKLINGS :

v

L,

: I

I

Flexibility’ A /I I

1 2 3 4 5 6 7 supz&i$y Meet Substantially

Competitors Stronger

Average Capability Level

Signi/icanl atp < ,001 level

taining and developing human and physical assets.

In many ways, the propensity toward sweep- ing improvements says much about the underlying culture and beliefs of the Superstars. Empha- sis on tri-level training (management, supervisors, and workers), as opposed to uni-level or bi-level training, is a strong component of a total factor resource improvement strategy. Superior manufacturing performance is built upon “the upgrade and maintenance” of the manufacturing knowledge workers-knowledge captured at all levels of the manufacturing function.

Having a strong preventive maintenance program is another basic indicator of manufacturing excellence. Yet the maintenance function in most organizations has not kept pace with changes in manufacturing theory, philosophy, and technology. Few companies have seriously worked to establish good maintenance programs; maintenance has always tended to fall to the bottom of the management concern list. Even in companies that have put formal maintenance management programs in place, significant managerial attention has rarely been devoted to this area. Giffi et al. (1990) report that 50 percent of

77

Figure 5 About the Study

The data used in this research were derived from the 1988 Manufacturing Futures Project (MFP). The MFP was specifically designed to gather information on competitive factors pertaining to leading manufacturing firms over time. The data used in this analysis pertain to the responses of 180 of 193 executives who fully answered all questions specific to the analysis. The sample was derived from manufacturing business units in the For&me 500 listing of the largest industrial corporations as well as lists of other large public and private firms. (See Roth and Miller (1990) for details of the statistical analyses underlying the research results presented here.)

The unit of analysis in this study is a manufacturing business unit (MBU). An MBU is the highest level in the organization or strategic business unit in which manufacturing strategy is integrated with marketing and product development strategy. About 59 percent of the MBUs were divisions or groups; 26 percent represented entire companies; and the remainder was composed of other various organizational units, such as plants. The typical respondent held the title of Vice President of Manufacturing for a division with sales of $150 million, and had 17 years of experience with the same company. The respondents represented a broad industrial mix, with 20 percent from the machinery group, 22 percent from electronics, 18 percent from consumer goods, 29 percent from industrial goods (intermediary materials, parts, and components), and 11 percent from basic industries. On average, participating MBUs reported a market share of 37 percent, a 1987 growth rate of 10 percent, and an average pretax return on sales of 10 percent.

The survey gathered information about a number of operational measures of manufacturing and MBU success. These measures were placed into the following categories:

Relative Managerial Performance. Managerial competence is measured by examining the extent to which general management was successful in meeting business unit goals. Performance to goals on the following five measures was gathered: overall performance of business unit, customer satisfaction ratings, after-tax profitability, return on assets (ROA), and market share.

Economic Outcomes. Absolute measures of traditional business unit performance were also collected in the survey: pretax profits as a percent of sales, pretax return on assets percent (ROA), annual sales revenues, unit growth rate in sales, and market share of primary product as percent of total market. In addition, research and development (R&D) expenditures as a percent of sales was collected.

Manufacturing Success. To gauge relative manufacturing success, the executives were asked to rate themselves on 11 competitive capabilities relative to their primary competitors in the same industry on a seven-point self-anchoring scale, where “l=substantially weaker,” “4=meet primary competitors,” and “7=substantially stronger.” These 11 competitive capabilities were reduced to five generic dimensions of manufacturing success.

Four of the five competitive capability dimensions correspond to theoretically important manufacturing performance criteria. The traditional manufacturing performance constructs of “quality,” “delivery,” “flexibility,” and “price” were originally proposed by Skinner (1978), and were later described as manufacturing order-winners and qualifiers by Hill (1985). The Bfth dimension corre- sponds to a boundary spanning capability for manufacturing, which we label “market scope,” Mar- ket scope represents a set of value-added capabilities that transcend traditional manufacturing boundaries, and that indicate manufacturing’s interface capabilities with customers and markets.

Manufacturing Strategy. Potential success factors a company can employ are defined by the general notion of a manufacturing strategy. A manufacturing strategy is the pattern of manufacturing choices that are made in the context of corporate goals and objectives. In our survey, executives were given a list of 39 action programs that include key strategic choices manufacturers can make to improve manufacturing effectiveness. Executives were asked to indicate whether or not each designated action program was being given a significant degree of emphasis. Further analysis indicated that 28 of the most important action programs could be boiled down to seven potential success factors for manufacturing strategy development:

l Materials flow-JIT; l Advanced process technologies;

l Capacity upgrades; l Restructuring; l Total factor resource improvements; l Quality management programs; and l Information systems.

78 Business Horizons /July-August 1992

companies surveyed had some type of maintenance management programs, and only 5 percent believed their program was effective. Mainte- nance management, as a component of total factor resource improvements, may well be the biggest challenge facing companies today, espe- cially those attempting to implement total quality management (TQM), computer-aided manufacturing (CAM), and just-in-time UIT) programs.

Quality Management Programs. Quality management programs are a strong predictor of manufacturing success. Our data indicate that the means by which overall capabilities are built varies between Superstars and Weaklings. Manu- facturing Superstars are more consistent with respect to their emphasis on formal quality programs, which are currently classified as “best practice.” Best practice programs include zero defects, statistical process control (SPC), and vendor quality management. Leading companies are taking no chances that they will miss out on the strategic benefits of the quality revolution. The Superstars are making fundamental shifts in their approach to quality management, from command and control to continuous improvement activities. For example, Motorola has become preeminent by making zero defects a fundamental part of the entire corporation. Motorola is so fanatical about eliminating defects that it uses a statistical m&a- sure, six sigma, to express the quest for perfec- tion. Simply stated, six sigma is a method of mea- suring quality control of only 3.4 defects per million parts.

Applying SPC as a method for continuous process improvement, feedback, and control is becoming increasingly used in all types of manufacturing. The appearance of computers on the shop floor has further enhanced the adoption of SPC. It is important to note that for the Super- stars, SPC is not simply a process control tool. It is also used to identify the causes of variability and separate those causes in such a way that workers, engineers, and managers can improve the process and reduce variability. As an example, after Xerox made hefty investments in statistical quality improvement, the reported pay- off, measured in terms of parts per million (ppm> defects, went from 10,000 ppm in 1983 to 350 ppm in 1988.

Besides internal development of quality programs, the Superstars are also engaging their suppliers in quality management. Xerox has devoted considerable energy and resources to edu- cating its suppliers and developing their manufacturing capabilities through training, hands-on technical assistance, and demonstrations.

Advanced Manufacturing Process Tech‘ nology. Faced with a fast-paced, competitive environment, the manufacturing Superstars are significantly more experienced in advanced

manufacturing technologies than are the Weak- lings. Having quality under control and developing fundamental manufacturing resource improvements may be seen as the prequalifying factors that must coincide with the successful implementation of advanced manufacturing technologies. Under these conditions, applying advanced technology is likely to contribute to Su- perstar capabilities, both now and in the future. Manufacturing success requires matching management and process innovation. Emphasizing advanced technology without the supporting infrastructure portends certain disaster, which the Superstars appear to be avoiding.

NeXT Inc. and General Motors’ Saginaw Van- guard plant illustrate the successful application of advanced process technology. NeXT has built a factory that comes as close to “lights out” manufacturing as any in existence. Robots using the latest in vision systems pack the NeXT mother- board more densely than any other commercial manufacturer can, providing NeXT with unparal- leled manufacturing advantage. Moreover, NeXT has matched its manufacturing process innova- tions with management technology policies that integrate highly skilled and educated employees to run the process.

General Motors, often criticized for being the first to fail in implementing advance manufacturing technologies, has since developed facilities like its Saginaw plant, which is among the most technologically advanced in the world. This facility, which includes 23 manufacturing cells, more than 50 robots, and 12 assembly cells, uses auto- mated guided vehicle systems as well as auto- mated parts storage and retrieval. Once again, the successful modernization at Saginaw required alignment of management technology as well.

Infqrmation Systems. We found an inverse relationship, not at first anticipated, between manufacturing success and the propensity to integrate information systems. We know that certain applications of systems integration repre- sent classic no-win situations, such as the case with so many attempts at CIM (computer integrated manufacturing). CIM is so frequently beset with interface difficulties and systems complexi- ties that it becomes dysfunctional. Furthermore, cross-functional systems integration is difficult because vendor and systems integrators have been slow to adopt open systems architectures and continue to squabble about standards.

CIM was intended to be the union or fusing of information and manufacturing technology; it was to result in complete automation of manufacturing processes and cross-functional integration with the finance, marketing, engineering, distri- bution, and strategic planning within an organization. This union has occurred rarely-so rarely, in fact, that the typical measure of progress toward


CIM has degenerated into assessments of the use of the individual components of advanced manufacturing technologies as islands of automation.

Many manufacturers have attempted to integrate systems without recognizing that such systems may require putting their houses in order by streamlining products and processes and making appropriate organizational structure changes. It is plausible that the ‘Weaklings are attempting to gain advantage through the integration of systems with advanced information technology but have, in the process, created more complexity. They were unable to implement technology properly or failed to build a sound infrastructure prior to its implementation.

On the other hand, we have witnessed a handful of firms in which systems integration and CIM have offered a substantial competitive advantage. In each of these cases, the manufacturers first built a solid infrastructure of quality management and human capabilities. The Superstars have mitigated the need for burgeoning information systems by first reducing the complexity inherent in the factors of production. It is com- monplace, as with one world-class Texas Instru- ments facility we visited, to eliminate MRP for shop floor control and replace it with a simplified &z&an system. Notably, the Superstars are more successful at technological applications overall, including systems integration.

Our fmdings support those of Warner (19871, who concludes that “information technologies should be considered only after conventional improvements and system reorganization have been exhausted.” We believe this characterizes the information systems strategy of the Super- stars.

Restructuring. That massive restructuring is not occurring in the Superstar group may indicate that their organizational structures are now working well, and only incremental changes are occurring. Because of organizational inertia, managers generally do not attempt to change structures without a dire need. There is compelling evidence that a number of currently successful manufacturers that underwent restructuring in the early to mid-1980s achieved impressive results. The Weaklings are only now placing more emphasis on restructuring their manufacturing units, as they apparently perceive the need for radical surgery to create flatter and more agile organizations.

Furthermore, not all restructuring builds corn- petitive capabilities. Chief executive Donald Kelly of BCI Holdings Corporation reports that “the trick is to distinguish true restructuring from the me-too variety. . . . There’s a lot of scrambling around, and many companies are doing it just so their top executives can go to cocktail parties and say they restructured. Many companies are doing

it in a protective mode, and some are doing it poorly” (Moore 1987).

M anufacturing prowess is typically associated with positive economic outcomes. The experience of the success-

ful businesses in our study sends a familiar mes- sage: increasing the chances for good business outcomes requires the effective coupling of executive leadership and manufacturing capabilities. The rationale makes perfect sense logically, but is often underexploited in practice. It is executive management’s function to leverage and coordi- nate manufacturing capabilities with those of other functional areas.

Superior manufacturing capabilities are built simultaneously, not sequentially. This suggests that developing strategic capabilities in manufacturing is dynamic, requiring a significant degree of attention to continuous transformation of the production environment. Central to the creation of superior manufacturing capabilities are the manufacturing strategy choices. Making the right ones is the essence of manufacturing strategy.

Three basic success factors appear to be among the building blocks for lasting improvement in manufacturing. These factors emphasize the concurrent and continuous consideration of total factor resource improvements, quality management programs, and advanced manufacturing process technologies. We found that complex systems integration should be avoided until manufacturing basics have been applied to reduce product and process complexity and to streamline work. 0

References

K. Ferdows and A. DeMeyer, “Lasting Improvements in Manufacturing Performance: In Search of a New Theory,” Journal of Operations Management, 9 (2) 1990: 168-183.

M.S. FIYM and R.E. Cole, Automotive Suppliers: Cus- tomer Relationships, Technology and Competition- Report of the Supplier Change Project, Industrial Tech- nology Institute, July 1986, p. 27.

C. Giffi, A.V. Roth, and G. Seal, Competing in World

Class Manufacturing: America’s 21st Century Chal- lenge (Homewood IL: BusinessOne Irwin, 1990).

R.W. Hayes, S.C. Wheelwright, and K.B. Clark, DJ+ namic Manufacturing (New York: Free Press, 1984).

T. Hill, Manufactuting Strategy: Text and Cases (Homewood, El.: Irwin, 1989).

J.G. Miller and A.V. Roth, “Manufacturing Strategies: Executive Summary of the 1988 North American Manu- facturing Futures Survey,” Manufacturing Roundtable Research Report Series, Boston University, 1988.

80 Business Horizbns /July-August 1992

J.G. Miller, A. Amano, A. DeMeyer, K. Ferdows, J. Nakane, and A.V. Roth, “Closing the Competitive Gaps,” in K. Ferdows (ed.), Managing International Munufucturing (Amsterdam: North Holland, 19891, pp. 153-168.

J.G. Miller, A. DeMeyer, and J. Nakane, Benchmarking Global Manufacturing (Homewood, III.: BusinessOne Irwin, 1992).

T. Moore, “Old-Line Industry Shapes Up,” Fortune, April 27, 1987, p. 23.

A.V. Roth and J.G. Miller, “Manufacturing Strategy, Manufacturing Strength, Managerial Success, and Eco- nomic Outcomes,” in J.E. Eddie, M.C. Burstein, and A. Fiegenbaum (eds.), Manufactuting Strategy (Norwell, Mass.: Kluwer Academic Publishers, 19901, pp. 97-108.

A.V. Roth and R.W. Miller, “The Automotive Industry in Transition: Progress Towards World Class,” Duke Uni- versity Working Paper, February 1992.

W. Skinner, Ma;zufacturing in the Corporate Strategy (New York: John Wiley, 1978).

G. Stalk, P. Evans, and L.E. Schulman, “Competing on Capabilities: The New Rules of Corporate Strategy,” Harvard Business Reuiew, March-April 1992, pp. 57-69.

T.N. Warner, “Information Technology as a Competitive Burden,” Sloan Management Revkw, Fall 1987, pp. 55- 61.

S.C. Wheelwright, “Reflecting Corporate Strategy in Manufacturing Decisions,” Business Horizons, February 1978, 57-66.

Aleda V. Roth 1s an associate professor of operations management at the Fuqua School of Business, Duke University, Durham, North Carolina. Jeffrey G. Miller is a professor of operations management at the Bos- ton University School of Management.


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Success factors in manufacturing