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Managing demand and supply uncertainties to achieve mass customization ability
Abstract
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 firm's 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 company's 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 ability. The paper provides such a theoretical foundation, and systematically identifies several demand and supply uncertainty management mechanisms that enable firms to achieve superior MC ability. In addition, it is one of the first large‐scale empirical studies to address the impact of managing both demand and supply uncertainties on MC ability.
... Bridging and buffering are two strategies that can be used (Bode et al., 2011). Buffering is an effort to incorporate slack into operations (Kauppi et al., 2016;Liu et al., 2010). Achieved via excess inventory or slack capacity, this strategy is not suitable for social sustainability performance wherein the focus is on assuring trading practices rather than on product lead times or supply chain agility. ...
... Achieved via excess inventory or slack capacity, this strategy is not suitable for social sustainability performance wherein the focus is on assuring trading practices rather than on product lead times or supply chain agility. Thus, supply chain actors must implement structural mechanisms to ensure better flow of information (Liu et al., 2010), i.e. they must engage in bridging (Bode et al., 2011). A bridge is used to facilitate access to information and to monitor a partner (Bode et al., 2011). ...
... This approach has been adopted by recent studies examining aspects of social sustainability that go beyond the buyersupplier dyad, and hence also seemed appropriate to our context (Huq et al., 2016;Reinecke et al., 2012). As the aim of our study was to develop an understanding of third party assessment we were interested in collecting rich data from a real setting and to focus on capturing contextual detail (Lincoln and Guba, 1985). Our unit of analysis was the assessment activities that were conducted to assure the social sustainability performance of the supply chain. ...
The paper examines the different third party approaches used to assess the social sustainability of global multi-tier supply chains. Information asymmetries between supply chain actors and stakeholders can result in uncertainty about how a good has been produced and traded, resulting in sustainability uncertainty. Third party social sustainability assessment is one mechanism used to monitor and communicate the credentials of everyday products to stakeholders. We frame our study using information processing theory to discuss how third party assessors can help to reduce sustainability uncertainty. As social sustainability is of particular importance in labor-intensive industries, empirical data is drawn from agriculture, textiles, handicrafts, footwear and consumer electronics supply chains. The analysis of semi-structured interviews with assessors reveals differing approaches to assessment. We show how these approaches utilize differing numbers of supply chain tiers. Some, for example, focus only on the farmer or raw material supplier when assessing social sustainability, which raises questions about the credentials of actors further downstream. The communities and livelihoods of supply chain actors, often located in the global South, can be dependent on the new, niche and potentially more profitable markets made available to goods that can demonstrate their social sustainability credentials. Robust assessment is therefore integral in accessing these new markets. The study offers a comparison between different assessors that will be of interest to scholars and also to supply chain actors considering engaging in social sustainability assessment.
... Customization occurs in a certain value-chain activity (i.e., design, fabrication, assembly, distribution) when this activity along the value chain is carried out according to the customer's specific needs [10]. A greater DPC means that, for a greater number of customer orders, customers are involved earlier along the value chain [11,12]. The external environment is of primary importance in determining the strategic decisions a company intends to pursue, which in turn affect the organization's design choices [13]. ...
... For instance, this may happen because different items in a company's solution space follow different customization strategies, consistent with Giesberts and van der Tang's [20] notion of assortment hybridity. Consequently, a higher DPC captures the fact that, for a greater number of customer orders, customers are involved at an earlier stage of the value chain [11,12]. ...
... Two items measured the dynamism of customer demands (Demand Dynamism) covering, on one hand, the fact that the needs and demands of customers change very quickly and, on the other hand, the fact that product demand is unstable and unpredictable. Finally, the DPC was measured by an objective measure adapted from Liu et al.'s [12] measure of "degree of make-to-order" and defined by equation (1). The DPC measure captures Lampel and Mintzberg's [9] conceptualization of a continuum of strategies, ranging from zero (no customization) to one (pure customization). ...
External environmental factors play a fundamental role in the strategic decisions a company intends to make, which in turn influence the organizational design choices. A widely known key strategic decision in the context of mass customization is the degree of product customization a firm provides to its customers. However, the impact of the external environment on the degree of product customization has yet to be empirically investigated. To narrow this research gap, the present paper empirically examines the impacts of three external environmental factors, namely competitive intensity, heterogeneity of customer demands, and dynamism of customer demands, on the degree of product customization, using survey data from 195 manufacturing plants in three industries and eight countries. Among the three examined factors, the paper identifies the dynamism of customer demands as a key factor that pushes firms to increase the degree of product customization they provide to their customers.
... Hence, inefficient operations have been viewed as a significant hindrance factor for MC implementation (Salvador et al 2009;Rungtusanatham and Salvador 2008). Previous large-scale empirical MC studies have addressed what it is (Duray et al. 2000), its impact on performances , and the effects of manufacturing practices Peng et al. 2011;Tu et al. 2004), organizational design , supply chain management (Huang et al. 2008;Lai et al. 2012;Liu and Deitz 2011), and environmental uncertainty (Liu et al. 2012;Liu et al. 2010) on MC capabilities. However, besides conceptual frameworks and case studies (e.g., Salvador et al. 2009;Zipkin 2001;Zhang and Chen 2006;Rungtusanatham and Salvador 2008), there is limited empirical evidence on the relationships among the MC practices. ...
... With the aid of various technologies and manufacturing practices, MC aims at designing, producing, marketing, and delivering customized products and services at a reasonable price (Pine 1993). Researchers have empirically identified many best practices or enablers for MC implementation, such as customer learning (Huang et al. 2008), customer focus Liu and Deitz 2011), customer involvement (Duray et al. 2000;Lai et al. 2012), supplier involvement (Liu et al. 2010), postponement (Yeung et al. 2007;Liu et al. 2010), supplier lead-time reduction (Tu et al. 2001;Liu and Deitz 2011), and information technologies (IT) (Peng et al. 2011). By proposing that a MC system should have three building blocks (i.e., elicitation, process flexibility technology, and logistics), Zipkin (2001) and Berman (2002) provide a holistic framework for developing a seamless and integrated MC system that connects these practices. ...
... With the aid of various technologies and manufacturing practices, MC aims at designing, producing, marketing, and delivering customized products and services at a reasonable price (Pine 1993). Researchers have empirically identified many best practices or enablers for MC implementation, such as customer learning (Huang et al. 2008), customer focus Liu and Deitz 2011), customer involvement (Duray et al. 2000;Lai et al. 2012), supplier involvement (Liu et al. 2010), postponement (Yeung et al. 2007;Liu et al. 2010), supplier lead-time reduction (Tu et al. 2001;Liu and Deitz 2011), and information technologies (IT) (Peng et al. 2011). By proposing that a MC system should have three building blocks (i.e., elicitation, process flexibility technology, and logistics), Zipkin (2001) and Berman (2002) provide a holistic framework for developing a seamless and integrated MC system that connects these practices. ...
Mass customisation (MC) is considered to be an important competitive tool to increase the performance of manufacturers. Due to the importance of MC as part of the manufacturing process, there is an increasing amount of research devoted to exploring the nature of MC and how to effectively implement MC processes. Based on the theory of complementary assets, this study investigates the relationships between different MC practices and the effects of these practices on the firm's financial performance. In this study, simultaneous equation modelling and hierarchical regression analysis are applied to data collected from a large-scale survey in China. The results show that different MC practices positively affect each other, and that the interactions between the MC practices positively influence a firm's financial performance. This indicates that the complementary adoption of MC practices is important for a firm's success, requiring the simultaneous deployment of elicitation, process-flexible technology and logistics practices.
... Hence, inefficient operations have been viewed as a significant hindrance factor for MC implementation (Salvador et al 2009;Rungtusanatham and Salvador 2008). Previous large-scale empirical MC studies have addressed what it is (Duray et al. 2000), its impact on performances , and the effects of manufacturing practices Peng et al. 2011;Tu et al. 2004), organizational design , supply chain management (Huang et al. 2008;Lai et al. 2012;Liu and Deitz 2011), and environmental uncertainty (Liu et al. 2012;Liu et al. 2010) on MC capabilities. However, besides conceptual frameworks and case studies (e.g., Salvador et al. 2009;Zipkin 2001;Zhang and Chen 2006;Rungtusanatham and Salvador 2008), there is limited empirical evidence on the relationships among the MC practices. ...
... With the aid of various technologies and manufacturing practices, MC aims at designing, producing, marketing, and delivering customized products and services at a reasonable price (Pine 1993). Researchers have empirically identified many best practices or enablers for MC implementation, such as customer learning (Huang et al. 2008), customer focus Liu and Deitz 2011), customer involvement (Duray et al. 2000;Lai et al. 2012), supplier involvement (Liu et al. 2010), postponement (Yeung et al. 2007;Liu et al. 2010), supplier lead-time reduction (Tu et al. 2001;Liu and Deitz 2011), and information technologies (IT) (Peng et al. 2011). By proposing that a MC system should have three building blocks (i.e., elicitation, process flexibility technology, and logistics), Zipkin (2001) and Berman (2002) provide a holistic framework for developing a seamless and integrated MC system that connects these practices. ...
... With the aid of various technologies and manufacturing practices, MC aims at designing, producing, marketing, and delivering customized products and services at a reasonable price (Pine 1993). Researchers have empirically identified many best practices or enablers for MC implementation, such as customer learning (Huang et al. 2008), customer focus Liu and Deitz 2011), customer involvement (Duray et al. 2000;Lai et al. 2012), supplier involvement (Liu et al. 2010), postponement (Yeung et al. 2007;Liu et al. 2010), supplier lead-time reduction (Tu et al. 2001;Liu and Deitz 2011), and information technologies (IT) (Peng et al. 2011). By proposing that a MC system should have three building blocks (i.e., elicitation, process flexibility technology, and logistics), Zipkin (2001) and Berman (2002) provide a holistic framework for developing a seamless and integrated MC system that connects these practices. ...
Social capital with customers has three dimensions: structural, relational and cognitive capital. We propose a research model on the joint effects of the three dimensions of social capital on mass customisation capability (MCC) and product innovation capability (PIC). The hypotheses are empirically tested using structural equation modelling and data collected from 276 manufacturing firms in China. The results show that the three dimensions of social capital contribute to MCC and PIC development through different mechanisms. In particular, cognitive capital has a significant impact on MCC; relational capital significantly influences PIC; and structural capital indirectly associates with both MCC and PIC. We also find that structural capital enhances both relational and cognitive capital. MCC improves PIC and fully mediates cognitive capital’s effect on PIC. The findings extend current understanding about the complex interrelationships among structural, relational and cognitive capital and how to develop MCC and PIC by investing in social capital.
... Kristal et al. (2010) discovered a positive link between quality management practices and MCC. Using organizational information processing theory, Liu et al. (2010) found that both demand and supply uncertainty management practices positively affect a company's MCC and Peng et al. (2011) revealed that new product development information technology (IT) and supplier collaboration IT are related to MCC, either directly or indirectly through modular product design. Relying on service-dominant logic, Liu and Deitz (2011) argued that both customer-focused product design and reduced supplier lead-time positively contribute to MCC and they are driven by supply chain planning. ...
... Using an extended resource-based view, Lai et al. (2012) found that both internal and customer integration directly improve MCC, and that internal integration also has a positive indirect effect on MCC through customer integration, which is amplified when demand is uncertain and competition is intense. Empirical studies have discovered significant direct effects of product modularity (Duray et al., 2000;Liu et al., 2010;Peng et al., 2011;Tu et al., 2004), organizational flatness and coordination (Huang et al., 2008;Kristal et al., 2010;Lai et al., 2012;Liu and Deitz, 2011;Liu et al., 2012) on MCC. ...
... In a business organization, coordination is the intentional sharing of information that facilitates joint decision making among different stakeholders. Formalizing interactions and collaboration allows an organization to improve its information processing capacity, which is important in managing complex and dynamic tasks under uncertain demands (Fredriksson, 2006;Huang et al., 2008;Liu et al., 2010). Both internal and external stakeholders possess valuable resources and knowledge . ...
This study examines the effects of organizational flatness, coordination (cross-functional coordination, cross-plant coordination and supply chain coordination) and product modularity on mass customization capability (MCC) development. We develop a flatness-coordination-modularity-MCC model. Data from 317 firms located in ten countries across three industries are analyzed to test the research model using partial least squares. Our results show that product modularity, cross-functional coordination and supply chain coordination significantly contribute to MCC, whereas the influences of cross-plant coordination and organizational flatness are insignificant. Organizational flatness enhances coordination practices, and its effect on MCC is fully mediated by cross-functional and supply chain coordination. Moreover, both cross-functional and cross-plant coordination increase product modularity, whereas supply chain coordination does not. We also find that such empirical results are not significantly affected by industry type or plant size. This study contributes to the literature by providing empirical evidence of the links between the practices of flatness, coordination and modularity, and the ways in which they jointly improve MCC. Our findings also provide guidance for managers and executives regarding how to design organizational structures and coordinate with both internal and external stakeholders to improve product modularity and MCC. Limitations of the study related to the nature of the data and the plant level focus are noted.
... Holding items and supplies in anticipation of future events is what is known as inventory. A large portion of organisations' inventory is marked by overstocking, deteriorating commodities, improper procurement methods, inadequate and inefficient control systems for inventory management, and a lack of competence in human resource management and responsibility allocation (Liu et al., 2010). Effective inventory, according to Miller (2010), can directly or indirectly affect an establishment's ability to make a profit. ...
... Rights reserved. (Jain et al. 2022) Process amenability, organizational readiness (Zhang et al. 2014) Organizational flatness Coordination, product modularity (Tu et al. 2004b) Customer Closeness Modularity-based manufacturing Practices (Hong et al. 2010) Lean practices, supply chain IT Value co-creation theory (Liu et al. 2010) Managing demand and supply uncertainties ...
Mass customization poses one of the primary challenges for manufacturing firms seeking to maintain competitiveness by satisfying diverse and ever-changing demands. The purpose of this study is to present a mechanism illustrating how internal cross-functional integration promotes mass customization by leveraging external supply chain partners and emphasizing the contingent role of product characteristics. Using 223 samples collected from multi-sources of manufacturing firms worldwide, regression and bootstrap analyses are applied to test the proposed moderated mediation research model. Our findings reveal that a firm’s capability of cross-functional integration plays an important role in directly promoting its mass customization performance and indirectly doing so through supply chain alignment. Moreover, our findings underscore that this indirect mechanism is more pronounced when products are designed to be highly modular. Based on our findings, manufacturing firms can enhance mass customization more efficiently and effectively by integrating internal cross-functional collaboration and product modularization, thereby fostering alignment within the external supply chain.
... In the event of the escalating demands, e-manufacturing minimises risks of machine failure to bolster plant productivity and throughput to respond to such escalating demand (Liu, Shah & Schroeder 2010:990) [36]. The use of paperless as well as productless manufacturing also renders it possible for the manufacturing entities to minimise wastes and produce only the desired quantity in case of declining demand. ...
This empirical research seeks to explicate how e-manufacturing systems drive the technology-intensive small and medium scale manufacturing enterprises' agility. To achieve this, a qualitative-case study research design was used to explore the perceptions of thirty-three operational managers from fifteen purposively sampled technology-intensive small and medium scale manufacturing enterprises in Aberdeen-Scotland. Semi-structured interviews were used to probe the manufacturing technologies that are used for leveraging not only manufacturing operational efficiency, but also agility. While using mainly IT intensive systems and other semi-automatic manufacturing technologies, most quests to leverage manufacturing efficiency and agility to respond to the unfolding trends were found to only entail usage of simple buffer stock management as well as reliance on the efficiency of the manufacturing equipment and processes. Besides the overall effectiveness of the distribution systems, findings indicated most quests to invest in more recent superior technologies like e-manufacturing systems or industrial 4.0 technologies to be undermined by fear of distorting some deeply entrenched reliable manufacturing approaches. In addition to costs and fear of the security risks of internet embedded technologies, some of the challenges were also found to arise from the incompatibilities of the old manufacturing technologies with the newer versions of internet-supported manufacturing technologies. However, even in the midst of such constraints, it was still easily discernible that had it not been due to such constraints, most of the manufacturers would still cherish to gain from the significant business values that the investment in relevant e-manufacturing technologies often induces. Since e-manufacturing systems' edifying effects on the manufacturing firm's agility had not been explored before, the study concludes by highlighting critical insights that enrich the existing theories on how e-manufacturing systems can be optimised to drive a manufacturing enterprise's agility.
... STSs theory posits that an organisation is an open system consisting of two interacting subsystems: Technical subsystem (tools, techniques and knowledge) and social subsystem (people) to produce goods and services that are valued by customers (Manz & Stewart, 1997). STSs theory has been widely adopted in the QM research to study how QM technicaloriented practices interact with social-oriented practices to enhance a firm's performance (Chaudhuri & Jayaram, 2019;Kull & Narasimhan, 2010;Liu et al., 2010;Zu, 2009). In this study, STSs theory can be considered an appropriate theoretical lens to investigate how the interaction between technical-oriented QM practices (i.e., quality information and process control) and social-oriented practices (i.e., supervisory interaction facilitation) concomitantly affects quality performance. ...
This study investigates (1) the effect of quality information on quality performance through process control and (2) the moderating role of shop floor leadership on the relationship between quality information and quality performance in the context of manufacturing plants on a global basis. The moderated mediation analysis with a bootstrapping approach was employed to analyse data for hypotheses testing. The data is from the fourth-round dataset of the High-Performance Manufacturing Project, collected from manufacturing plants worldwide. The results indicate that (1) quality information is positively associated with quality performance through process control, and (2) shop floor leadership (i.e., supervisory interaction facilitation) positively moderates the indirect effect of quality information on quality performance; that is, the shop floor leadership practice strengthens the effect of quality information on quality
performance through process control. This study also has a practical implication for top
managers who should consider the vital role of leadership practices adopted by shop floor supervisors in implementing total quality management practices and should raise awareness that leadership practices are not only for the ‘C-suite’ but also for shop floor supervisors.
... With adaptive customization the customer is responsible for assembly, whereas with cosmetic customization the product is produced on an ATO basis by the manufacturer (Meredith and Akinc, 2007 p.624). From the firm's point of view, the significant factors that influence the success of mass customization strategies include the ability to handle uncertainties and complexities in demand and supply chain activities (Blecker and Abdelkafi, 2006;Liu et al., 2010;Shirwaiker et al., 2013). Moreover, differences in customers' expertise, and their willingness and ability to partake in mass customization activities have significant influence on the success of mass customization strategies (Duray, 2002;Buffington and McCubbrey, 2011). ...
Healthcare systems face increasing demand and expectations due to globally aging populations and new technologies which will increase the demand for medical technology products. The ‘value’ of health technologies is based upon health technology assessment rather than customer perceptions. This research contributes to product delivery strategy and mass customization theory and contributes to practice by explaining how the proposed conceptual framework could enhance the value proposition of medical technology products, improving company performance and competitiveness. This paper used a 13-month, longitudinal, participative Action Research strategy to understand and improve the performance of a German medical technology company that manufactures prostheses with varying levels of customization. The conceptual framework was successfully applied in the case organization. It provided a structure for product segmentation which grouped products according to their value propositions which reflected different trade-offs in terms of health technology assessment (HTA). Appropriate delivery strategies were then determined for each group. This research demonstrated that product delivery strategies based upon postponement improved productivity and delivery performance, whilst reducing inventory and enhancing value.
... Many studies have explored numerous ways to attain mass customization capability (MCC), and the coverage of MC literature has widened over the years encompassing Achieving mass customization capability technological-, individual-and organizational-level enablers, such as collaboration with suppliers and customers (Jitpaiboon et al., 2009), lean (Hong et al., 2010) and agile manufacturing (Vinodh et al., 2010), postponement (Liao et al., 2013), supply and demand uncertainty management (Liu et al., 2010), fostering learning throughout the supply chain (Fang et al., 2016), modular product architecture (Tang et al., 2017), use of information systems (Jitpaiboon et al., 2013) and advanced technologies for manufacturing (Yan et al., 2019;Qiao et al., 2006). Although the research on the determinants of MCC has been increased exponentially in the last two decades (James and Mondal, 2019;Sandrin et al., 2014;Fogliatto et al., 2012), Trentin et al. (2015) stated that research on MCC is still underdeveloped and need to be explored. ...
Purpose
The purpose of this study is to investigate the effects of flexible manufacturing competence (FMC) and workforce management practices (WMP) in facilitating the development of mass customization capability (MCC). More specifically, this research analyzes not only the direct effects of FMC and WMP on MCC but also the moderating effect of WMP on the relationship between FMC and MCC.
Design/methodology/approach
Building on the resource-based view, a research framework depicting the linkages among the variables of interest has been proposed. The examination of the proposed research model and hypotheses are conducted by applying partial least squares-structural equation modelling (PLS-SEM) on a dataset of Indian manufacturing organizations.
Findings
The findings suggest that both FMC and WMP significantly and positively affect the development of MCC. Also, the results show that the relationship between FMC and MCC is strengthened by the implementation of WMP.
Practical implications
The study identifies several crucial practices for enhancement of flexible manufacturing competence and effective management of the workforce and also highlights the complementarities among them to develop superior MCC.
Originality/value
While the research on the antecedent of MCC has increased substantially, the understanding of the interactions among FMC, WMP, and MCC is still limited. This is the first study that sheds light on the interconnectedness among the variables of interest.
... Managing demand and supply uncertainties is essential for all producers [76]. Lee shows that supply and demand uncertainties are crucial about this technique. ...
We provide a technical assessment and critique of the existing literature via highlighting problems associated with conceptualization and technical improvement of agility practices. By presenting a narrative evaluation of the technical review, we underscore the nature of the SC hazard in addition to agility practices and furnish a synthesis for future studies. The purpose is to examine the relationship between identifying and ranking the elements affecting supply management for SC agility in compressed natural gas pressure vessels. This study is applied research and data are collected based on descriptive survey. The populace of the investigation is milled compressed natural gas pressure vessels. Survey data are amassed through interviews and questionnaires. Cronbach’s alpha has been utilized to evaluate the reliability of the values received 0.778, which shows that the questionnaire is of excellent reliability and the questionnaire has 27 questions. Also, because the volume of the statistical population is 270 people, the consequences show that there is a positive connection among the empowerment of SC agility. Driving agility is on a positive supply chain (SC) agility. The expense has a poagilitysitive impact on SC agility.
... Liu and Deitz (2011) indicate that MC capabilities are driven by customer-focused product design and reduced supplier lead times, and these factors are driven by management's emphasis on supply chain planning. As uncertainty coherently, Liu et al. (2010) explore the influence of uncertainty on MC, and identified that individual demand and supply uncertainty management mechanisms that are likely to help a company achieve MC ability through reducing demand and supply uncertainties or their effect. Loginova and Wang (2013) develop MC in an endogenous-timing game with vertical differentiation, the results show that MC by one or both firms occurs only if the quality difference is sufficiently large. ...
Mass customization (MC), which is popular in the fashion industry, is proposed to provide customers with products with a high degree of adaptation and a price comparable to a mass product. Both the manufacturer and customers can benefit from it. However, how to properly apply the MC strategy when facing challenges in the real world needs more exploration. In this paper, we first review the related operations research literature. Then, we conduct a real case study of a fashion company adopting MC in China. We highlight the challenges and critical successful factors for implementing apparel MC. We identify important technologies in fashion MC systems. We also propose future research opportunities on MC operations in the fashion industry.
... Others are mentioned below Haug et al. (2009) Volume Chen et al. (2009) Variation in demand Peidro et al. (2009) Uncertainty in demand, process, supply Alizon et al. (2009) Dimensions (size of the product and parts) Eivazy et al. (2009) Length of process route, re-entrancy, product variety, uncertainty, machine breakdown, changing technologies Geng and Jiang (2009) Queuing Yusof and Deris (2009) Resource availability, capable and allocated machine, different UPH on each machine Salvador et al. (2009) Design (continued ) Efficiency-related issues in MC Ignizio (2010) Allocation, qualification, dedication, product-mix changes, ramp fluctuations in job arrival, maintenance, rework, volume of priority lots, stability Ding et al. (2010) Repetitive testing, retest of failed items Claro and DeSousa (2010) Multi-stage capacity, irreversibility, lumpiness Reyes et al. (2010) C p /C pk o0.8 causes OEE to drop significantly Zhang et al. (2010) Response time, variety Fu et al. (2010) Qualification of machines, setup times sequence dependent, product-mix, tool set constraint and tool set availability Gibbons and Burgess (2010) Overproduction; waiting; transport; inappropriate processing; unnecessary motion; and defects. Breakdown, setup and adjustments, inefficient startup, tooling time, minor stoppages, low speed Chuang and Wu (2010) Capacity decisions and not efficiency Zhang (2010) Learning Liu et al. (2010) Demand uncertainty Kristal et al. (2010) Quality Kotri and McKenzie (2010) Customer inputs, process, product complexity Hong et al. (2010) Product variety, lot size Ahmad et al. (2010) Product modularity Eyers and Dotchev (2010) Complexity of design, process, material ...
Purpose
The purpose of this paper is to address the gap between definition and practical aspects of production efficiency in mass customization (MC). The paper summarizes all major issues impacting efficiency in MC. Also, the paper reviews metrics, relationship between various parameters and provides a best practices benchmark toolkit to achieve higher machine efficiencies.
Design/methodology/approach
The paper identified and categorized multiple challenges impacting machine efficiency in MC through a literature review spanning over three decades, and also ranked the identified issue-based parameters. Top issues were found varying across different types of industries identified through the review. Metrics pertaining to efficiency and degree of MC are reviewed in the paper. A chronological review of issues is presented, and a chain diagram is built in the paper. Toolkit of best practices created with solution strategies and tools are summarized through the review.
Findings
The paper found that MC reasonably impacts machine efficiency which needs to be addressed. Major issues through literature review-based ranking are uncovered, and worldwide research trend and comparison are presented. Active research in this area is observed to be at its peak since 2010. The extensive use of strategies and benchmark toolkit for improving efficiency are summarized.
Research limitations/implications
Ranking of issues has been done through a literature review; hence, there can be skewness depending on the frequency of issues researched by various authors in various areas of industries.
Practical implications
This paper is useful for manufacturing managers and companies willing to increase the size of their product portfolio and choices within their available resources without compromising machine efficiencies and, thereby, the cost. The identified issues help in providing a comprehensive issue list to the academia.
Originality/value
This paper describes what is believed to be the first study that explicitly examines the issues faced in achieving machine efficiency while manufacturing in an MC environment.
... Within the fashion industry, in fact, the demand is unstable because of changing stylistic factors and specific customer personalisation requirements that, in the last years, are changing the process of collection creation. In this way, the demand uncertainty has become strongly related to the type of collection (i.e., personalised or not) that the company offers to consumers (Gensheng et al., 2010). More specifically, the importance of considering the link between demand uncertainty and the type of personalised product has been debated by previous works dealing with the mass customisation topic and identifying ways to efficiently manage customised products (e.g., Liu et al., 2010;Piller and Tseng, 2010). ...
... In this way, the demand uncertainty has become strongly related to the type of collection (i.e., personalised or not) that the company offers to consumers (Gensheng et al., 2010). More specifically, the importance of considering the link between demand uncertainty and the type of personalised product has been debated by previous works dealing with the mass customisation topic and identifying ways to efficiently manage customised products (e.g., Liu et al., 2010;Piller and Tseng, 2010). Managing high demand uncertainty is essential for companies that intend to achieve personalisation, especially for fashion firms, because these uncertainties are an intrinsic characteristic of the fashion industry. ...
Personalisation is a growing challenge, particularly for footwear companies strongly influenced by customer preferences. Previous research showed significant differences between footwear supply networks that provide personalised products, especially regarding key variables, such as the level of demand uncertainty, type of productive capacity, type of purchasing and order dimensions. However no studies have considered these variables simultaneously, thus failing to provide a complete understanding. Moreover, previous studies on personalisation primarily focused on product features by identifying the different types of collections available without analysing implications for supply networks. To fill these gaps, we adopted a multiple case study methodology. Based on findings, we identified different personalisation types (individual personalisation, segmented personalisation, personalisation for distributor) and compared them to the case in which personalisation is not available. This work demonstrates that a company can develop and deliver different types of personalised collections, but this requires the management of different supply networks.
... Inventories are kept due to uncertainty [9]. Most of the work is characterised by excessive inventory on hand, raw materials losing their quality, inventory no longer saleable, improper sourcing methods, and poor personnel management skills, poor delegation of responsibilities and inefficiencies and ineffectiveness of inventory management control system [10]. [11] State that inventory management in most organisations is disregarded and top management is not convinced by managers on how to control and consider inventory more than other different functions of the organisation. ...
... If inventory management copes with demand and supplies uncertainty, this will affect its production efficiency, and will indirectly influence its capability to meet customer needs by avoiding supply and demand incompatibilities. Thus, information accuracy and buffering are required for decision makers during work execution to minimize uncertainty (Liu et al., 2010). ...
Purpose
– The purpose of this paper is to give a clear picture of the evidence for small and medium enterprises of what the key factors are affecting the performance of supply chain members (SCMs) and their impact.
Design/methodology/approach
– The authors conducted a survey of small and medium automotive enterprises. After a comprehensive search of the literature on effective factors requirements of supply chain actors (supplier, manufacturer, inventory, distribution, and information flow) 23 factors were identified, and collected data were analysed using SPSS software.
Findings
– The results show that among the 23 factors, the inventory level is the most significant factor for inventory with the highest percentage (91 per cent). This is followed by productivity to fill the order (88 per cent) and lead time of manufacturing (86 per cent) for manufacturer, and transportation flexibility (84 per cent) for distribution section.
Research limitations/implications
– Study limitation was that only the companies related to automotive sector were selected, and the number of usable questionnaires was fairly small.
Practical implications
– The results can help further by introducing a much better perception of effective factors that result in optimizing the practices of supply chain management techniques in order to enhance business performance. The findings also help build a new initiative to be performed by top management when attempting to strengthen partnership and integration among members.
Originality/value
– This research draws from institutional theory to contribute to the growing body of practical field and conceptual literature on supply chain integration and provides knowledge in assisting small- and medium-sized enterprises to clarify factors that affect SCMs in order to enhance and manage their operational processes.
... Such changes make it challenging for firms to visualise their future long-term strategy (Gupta and Maranas, 2003), and yet firms must be able to adapt their products, strategies, and tactics to changing demand conditions. It is important to investigate this uncertainty (Wang et al., 2000) since it prompts organisations to establish and manage relationships in their quest to achieve stability, predictability, and dependability (Liu et al., 2010). Through outsourcing, companies can protect themselves from demand uncertainty by letting their partners carry some of the risk. ...
Environmental dynamism is considered an increasingly important factor in creating competitive value by outsourcing management. The purpose of this study is to understand the relationship between environmental dynamism and outsourcing success. To meet this challenge, an empirical model was developed to investigate the role of environmental dynamism in strategic outsourcing success using two statistical tools, partial least squares and structural equation modelling. The results confirmed that the three dimensions of environment dynamism – namely customer demand, changes in technology and market competition level – have a significant positive effect on outsourcing success.
... Most of these studies examined organizational design features or manufacturing practices that facilitated the acquisition of MC ability. These factors include quality management practices , information technology (Peng et al., 2011), product modularity (Ahmad, Schroeder, & Mallick, 2010), work design practices (Liu et al., 2006), functional integration (Liu et al., 2012), organizational structure , learning (Huang, Kristal, & Schroeder, 2008), supply chain planning and management practices (Liu & Deitz, 2011), and supply chain uncertainty management practices (Liu, Shah, & Schroeder, 2010), etc. Only two studies examined the performance consequences of MC and they found that MC had a direct positive impact on operational performance (Liu et al., 2012) or competitiveness (Ahmad et al., 2010). ...
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 ability's 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.
... MC can be understood from a range of perspectives, including strategy (Pine and Davis, 1999), marketing (Piller and Muller, 2004), engineering (Bateman and Cheng, 2006;Tseng and Jiao, 1998), and operations management Liu et al., 2006;Liu et al., 2010;Tu et al., 2004). This study adopts an operations management perspective and focuses on MC capability, the ability of a firm to provide a high volume of customized products or services in a short delivery time and at a reasonably low cost (Tu et al., 2001;Tu et al., 2004). ...
... of an MC environment entails demand and supply uncertainties [4] and requires a restructuring of the marketing, production and logistics mechanisms of the company [5,6] as well as of its organisational functions [7]. Difficulties in MC implementation are further compounded considering that the MC paradigm is focused on achieving, apart from economies of scope, economies of scale in order to improve system performance in the dimension of cost, serving a mass market [8] (Fig. 1). ...
The currently widespread mass customisation paradigm greatly affects the planning and operation of manufacturing networks. The increasing need towards customised products in combination with the volatile product demand calls for efficient ways to design and plan manufacturing network configurations. The work discussed in this paper aims at enabling a mass customisation and personalisation implementation, by engaging the customer in the design of unique products and by enabling the Original Equipment Manufacturers (OEMs) to efficiently plan manufacturing and transportation activities of highly customised products by exploiting an innovative decentralised manufacturing approach. The suggested method, which is implemented into a web-based platform consists of (a) the “User Adaptive Design System” (UADS), focused on providing user-friendly design tools that allow unique product design changes, in a constrained way, (b) the “Decentralised Manufacturing Platform” (DEMAP) that allows the generation, evaluation and selection of manufacturing/transportation network alternatives, and (c) the “Environmental Assessment Module” (EAM) that assesses through simulation the environmental footprint of the alternative network configurations. The applicability of the suggested architecture is validated through its pilot installation to a European automotive manufacturer and a CNC machine building company.
... However, not all the five strategies identified by Galbraith (1977) to achieve such re-alignment (i.e., creation of slack resources, environmental management, creation of self-contained tasks, use of computer-based information systems, and utilisation of lateral relations) are viable when mass customisation is the goal. In keeping with Liu et al. (2010), we argue that creation of slack resources is not a viable option in this case. The reason is that creating slack resources means to reduce performance targets (Galbraith, 1977), whilst transition from custom manufacturing to mass customisation necessitates improving operational performance and transition from mass production to mass customisation ideally requires that operational performance be preserved 1 Whilst intrinsically raising the level of performance required or environmental complexity and dynamism, the decision to achieve higher mass customisation capability per se does not affect another contributor to task uncertainty: namely, division of labour. ...
The need to transform the organisation for mass customisation has long been recognised in literature, but the discussion has largely relied on anecdotal evidence or case studies and has limitedly taken advantage of insights from organisation theory. In this paper, we draw on organisational information-processing theory to develop solid theoretical links between mass customisation capability and four organisation design strategies aimed at either increasing an organisation's information-processing capacity or decreasing its information-processing needs. We then test the hypothesized relationships using a sample of 238 manufacturing plants from three industries and eight countries, and find that mass customisation capability is positively related to self-containment of tasks, environmental management, and use of lateral relations. We conclude by discussing implications of our results for both research and practice.
... Managing demand and supply uncertainties is critical for all manufacturers (Liu et al., 2010). Lee (2002) suggests that supply and demand uncertainties are decisive for the strategy: efficiency is appropriate for products with low demand uncertainty (functional products) in the case of low supply uncertainty (stable process). ...
Purpose
The purpose of this paper is to propose a model that enables a company to select the supply chain strategy based on risk probability p (measure of how likely/often a detrimental event occurs) and risk impact i (expression of the significance of a loss when that event occurs).
Design/methodology/approach
This paper discusses four supply chain strategies: agility, robustness, resilience and rigidity. Mathematical models are used for the strategies' cost functions, which reveal optimal solutions and break‐even points in dependence of p and i.
Findings
This paper proposes that resilience is appropriate in the case of high supply chain risk probability and impact, and rigidity if both values are low. When only risk impact is low, robustness is optimal, whereas agility is optimal when only risk probability is low.
Research limitations/implications
This research extends existing models for selecting the appropriate supply chain strategy.
Practical implications
Knowledge of the interplay between the strategies' cost functions and risk probability and risk impact is vital for companies. This may encourage managers to become more familiar with their strategy costs and supply chain risks.
Originality/value
To the author's knowledge, no corresponding model exists so far that links risk impact and risk probability to the four supply chain strategies.
... Managing demand and supply uncertainties is critical for all manufacturers (Liu et al., 2010). Lee (2002) suggests that supply and demand uncertainties are decisive for the strategy: efficiency is appropriate for products with low demand uncertainty (functional products) in the case of low supply uncertainty (stable process). ...
Reconciling product flexibility with cost, delivery, and quality is an ambidextrous organizational capability known as mass customization capability. This study focuses on how this capability is affected by the joint implementation of three organizational practices––knowledge absorption from customers, product modularity, and online sales configurator use––that directly correspond to the three fundamental building blocks of mass customization identified by prior, influential research. By drawing upon a central tenet of resource orchestration theory, the fit-as-covariation perspective, and prior mass customization research, we conceptually develop the hypothesis that the fit-as-covariation of these practices has a stronger positive association with mass customization capability than the same practices implemented in isolation. This hypothesis was tested using covariance-based structural equation modeling and survey data from 213 manufacturing plants in three industries across 16 countries. Our results support the hypothesis, showing that the joint effect of these practices explains substantially more mass customization capability variation (41.9%) than their isolated effects (13.9%). This amount of variation indicates an effect size that is greater than that reported by most previous survey-based studies on the antecedents of this capability. Theoretically, this paper adds to the relatively limited body of knowledge on the relationships among the enablers of mass customization by highlighting the benefits of a holistic approach in the implementation of the three practices under investigation. Pragmatically, this study helps companies create flexible systems that are able to provide customized products without compromising cost, delivery, or quality.
Purpose
Despite the growing interest in enhancing mass customization capability (MCC), firms still have little knowledge of dealing with the superimposed challenges of increased market uncertainty and supply chain disruptions. Based on the dynamic capability view, this study focuses on the impacts of frequent sensing and reconfiguring processes on MCC and the mediating roles of proactive and reactive supply chain resilience (SCR).
Design/methodology/approach
We collected survey data from 277 manufacturing firms and conducted a structural equation model to test hypotheses.
Findings
The results reveal that although its direct effect on MCC is insignificant, sensing process improves MCC indirectly via reactive SCR. Our findings also show that reconfiguring process enhances MCC both directly and indirectly via reactive SCR.
Originality/value
This study provides theoretical and practical insights into how to combine dynamic capability and SCR to strengthen MCC.
Research on form postponement finds that deferring product differentiation along a manufacturing and distribution process improves the efficiency of a manufacturer by reducing demand uncertainty and the related safety stock costs. The underlying assumption of this stream of research is that form postponement increases customer utility by ensuring the rapid delivery of many pre-specified product variants. However, we contend that form postponement can also foster customer utility by providing customers more time to articulate their needs or by sparing them the trouble of forecasting how their needs will change during the product’s lifespan. We hence propose that a manufacturer should implement different types of form postponement depending on its intended impact on customer utility. By doing so, we contribute to the literature on form postponement by acknowledging that its value is not restricted to the reduction of demand uncertainty and by showing how it should be used to link the operations and marketing strategies of a manufacturing firm.KeywordsForm postponementUncertaintyCustomer utilitySales performanceMass customization
Managing inventories is one of the major challenges that organizations such as tertiary institutions are facing. Most of the stocks kept in organizations are characterized by excessive inventory on hand, raw materials losing their quality, improper sourcing methods, poor personnel management skills, etc. There also exists a lack of accurate and timely information. In order to arrest these deficiencies, an adaptive web-based inventory control system was developed. The current inventory in the storage unit of Olusegun Agagu University of Science and Technology (OAUSTECH), Okitipupa was captured. Collection of data from the Procurement and Store Unit was done through interviews, observation of record books, and some printable data. The system was implemented using PHP, HTML files, BOOTSTRAP, and MySQL. The outcomes are the generation of timely alert messages and reports to management when the inventory level reaches an out-of-stock threshold, computation of various inventory analyses such as price levels, lead-time analysis, replenishment period demand analysis, vendors' delivery performance, and generation of low-cost stock recommender system.
Purpose
The importance of supply network flexibility (SNF) in the development of mass customization capability (MCC) has been implied in the literature but seldom subjected to empirical investigation. To fill the gap and contribute to MC literature, this paper aims to examine the role of SNF in facilitating the development of MCC of organizations. Furthermore, it has been investigated whether the use of information and communication technologies (ICTs) strengthens the above relationship.
Design/methodology/approach
Drawing on the supply chain literature and dynamic capability theory, the study proposes a research framework depicting the interconnectedness among the variables of interest. The proposed framework has been tested using structural equation modelling based on partial least squares by using the data collected from a questionnaire-based survey of a sample of Indian manufacturing organizations.
Findings
The findings indicate that the dimensions of SNF, namely, sourcing flexibility and supplier flexibility, positively affect the MCC of the organizations and the strength of these relationships is further amplified by the implementation of ICTs.
Practical implications
The study shows the managerial opportunities for the development of a flexible and competent supply network to facilitate the development or enhancement of MCC.
Originality/value
This study contributes to scant literature by providing empirical evidence for the relationship between SNF and MCC. Further, this study enriches the understanding of the crucial role of ICT by exploring its moderating effect on the relationship between the variables of interest.
Mass Customization is a generic business strategy for organizational excellence and organizations striving for competitive advantage are incorporating MC into their business model. Though research has been done to identify enablers of mass customization, there has been an associated degree of study in conceptual papers while theory-building articles are less in number. Also, less study has been done in the Indian market scenario. The literature show that organizations are apprehensive of their technological potentials and are not taking initiative to transform themselves from conventional mass manufacturing companies to mass customization for emerging market needs. As a response to this research gap, a systematic literature review is conducted on enablers for MC and Total Interpretive Structural Modelling (TISM) and MICMAC analysis is used to develop a framework that illustrates how enablers are placed at different levels and how a particular enabler influences the other or getting influenced. Supporting this insight, a theory for accomplishing mass customization in manufacturing units is established. The theory is verified from experts by structured questionnaire from three Indian manufacturing companies where Mass customization is being practiced. This paper renders a summary of the methodology and specifies its validation in three case study companies. Practices are suggested to reinforce the attainment of mass customization in organizations aspiring to implement mass customization.
Purpose
Owing to the paucity of literature, in the specific context of mass customization (MC), that explains what factors need to be considered while selecting suppliers and what strategies need to be implemented for effective management of suppliers, this paper aims to explore the effective supplier selection and management strategies and also investigate their impact on the development of mass customization capability (MCC).
Design/methodology/approach
Through an extensive review of literature, a total of 18 factors for supplier selection and management have been identified. Further, using multiple regression analysis, the linkages between these factors and MCCs have been examined based on the data set from the survey of Indian manufacturing organizations.
Findings
The results indicate that while concentrating on the responsive and reconfiguration capability, all the five measures of supplier selection and the four measures of supplier management have shown a significant influence. However, in the case of relational capability, only two of the supplier selection strategies and three of the supplier management strategies have shown a notable impact.
Practical implications
The study provides help to the firms in deciding whom to select and how to manage the suppliers in the course of improving their MCCs. The study has shown the possibility that different types of MCCs might require different approaches to both the supplier selection and management.
Originality/value
To the best of the authors’ knowledge, this study happens to be the first of its kind that investigates the interconnectedness among the supplier selection and management strategies and MCCs.
In today’s world of heightened competition and ever-growing demand of customers expecting the fulfilment of their needs exclusively at lowest possible prices and delivery time, development of customer-centric and learning-oriented culture, mass customization capability (MCC), and effective implementation of customer relationship management (CRM) are important determinants of success, but the existing research has largely overlooked how these factors interact and affect firm performance (FP). To address the gap, the present study proposes and empirically examines a framework that relates CRM and organizational culture (OC) to MCC and FP. More specifically, this research analyses direct effects of CRM and OC on MCC and FP. In addition, the study also analyses the indirect effects of OC and MCC on the relationship between CRM and FP. Based on the data collected through a questionnaire-based survey of Indian manufacturing organizations, the proposed framework and associated hypotheses are empirically examined by using structural equation modelling based on partial least squares (PLS-SEM). The results indicate that the extent of effort employed by the firms to implement CRM and development of learning-oriented OC positively affects FP. Furthermore, MCC and OC have significant indirect impact on the relationship between CRM and FP.
Purpose
Previous literature tends to combine postponement and modularity or view them as parallel factors to achieve mass customization (MC) while ignoring the sequence of a firm to design and implement operations and supply chain strategy. Based on a customer-oriented strategy and theories of organizational information processing theory, three-dimensional (3D) concurrent engineering and resource dependency, the purpose of this paper is to propose a sequential model reflecting the sequence of practices as well as an overview picture for a firm to achieve MC.
Design/methodology/approach
The model links three company antecedents – postponement orientation, operational alignment and information sharing, to three company supply chain practices – product and process modularity and supplier segmentation. These practices, in turn, lead to the company’s MC capabilities. The proposed model is tested with a data set collected from automotive suppliers in China and in the USA. Structural equation modeling is used to analyze the data and test the model.
Findings
The results suggest that, for suppliers to achieve MC, postponement orientation and operational alignment are vital antecedents. The results also reveal the important responsibility and role of information sharing practices in coordinating suppliers’ modularity practices.
Originality/value
This research provides three findings that are of value to both academicians and practitioners of supply chain management. First, this study originally proposed and empirically tested that a postponement orientation is an antecedent of product and process modularity and supplier segmentation to achieve MC in the automotive sector, contrary to the traditional view of parallel relationships for both. Second, it developed and verified measures of operational alignment and supplier segmentation for future research use. Third, the vital role of information sharing to coordinate internal and external supply chain practices to achieve MC is empirically supported.
The manufacturing organizations around the globe have been observing a paradigm shifting from mass production to mass customization (MC). Mass customization capability (MCC) is the ability of a firm to produce varieties of customized products quickly, on a large scale and at a cost comparable to mass-production through flexible production processes and responsive supply chain. The goal of this paper to report a existing mass customization capability level (MCCL) appraisement of Indian bicycle manufacturing firm using multi-grade fuzzy approach. Through this study, a MCCL measurement model integrated with multi-grade fuzzy approach was designed. After the computation of MCCL index, the areas for improvement have been identified to adopt and implement mass customization strategy in the case firm. The approach contributed in this paper could be employed as appraisement equipment for estimating an organization’s capability to turn out to be a mass customizer.
This paper aims to evaluate the reliability, validity and unidimentionality of the scales. A prepilot study was completed that involved three manufacturing managers and four academic experts to improve content validity. A pilot study was then completed that 108 middle and senior manufacturing managers in HCM City and neighboring provinces. Cronbach’s alpha and EFA analysis was used to assess the reliability validity and unidimentionality of the scales. The initial results show that mass customization capability, product modularity, supplier integration may have reliability, validity and unidimentionality; customer integration may not have unidimentionality. Therefore, large-scale data collection and analysis will have collected and analyzed to validate the instruments, test the model and research hypotheses.
Purpose
Effective mass customization (MC) depends on accurately identifying customer needs and procuring appropriate components from supply base to manufacture the required product configurations in a timely manner. In essence, effective MC for a focal firm is contingent on effective supply chain management. However, extant literature is not very clear on how supply chain (SC) planning and integration activities affect MC. The purpose of this paper is to fill the gap by examining the impacts of SC-planning and SC-integration on MC.
Design/methodology/approach
Organizational information processing theory is used to link SC-integration with MC ability, and a link is hypothesized between SC-planning and SC-integration. The structural equation model is then analyzed using data from 262 manufacturing plants.
Findings
It is found that SC-integration fully mediates the relationship between SC-planning and MC-ability.
Research limitations/implications
The SC-integration measure is from a focal manufacturer’s standpoint, rather than the standpoint of the entire SC.
Practical implications
The results indicate that using a SC perspective in planning activities helps a focal firm integrate with key stakeholders along the SC, which subsequently helps the firm mass customize. Practitioners should recognize the added importance of SC-planning and SC-integration if they want to mass customize.
Originality/value
This study provides a theoretical foundation for the relationship between SC-integration and MC. It also provides a more comprehensive conceptualization of SC-integration, which includes supplier integration, customer integration, as well as internal functional integration which was neglected in many previous studies.
Purpose
Supply chain risk (SCR) has increasingly attracted academic and corporate interest; however, the SCR debate in academic literature is rather limited to case- and location-specific studies. Hence, the purpose of this paper is to utilize a systematic literature review (SLR) to explore the SCR research trends and gaps within the management literature.
Design/methodology/approach
To achieve the research objective an SLR, looking into 25 years since 1990, into supply chain risk management (SCRM) was conducted, which resulted in 114 papers.
Findings
While the SCRM literature is growing, results from the SLR identified limited organized understanding of what constitutes a holistic SCR process, and high reliance of particular categories for SCR, such as the high reliance on specific country settings (the USA and the UK); limited presence of cross competitive SCR process analysis and challenges in developing conceptual SCR frameworks.
Research limitations/implications
The SCR embeds categories of location, scope of supply chain, risk management tools, and the industry sectors involved. The search for related publications was mainly used from a wide range of coverage from accountancy to design in SCR; hence, although there is indication to specific industries, and foci of risk, this could be explored further.
Practical implications
This review of SCRM identifies various research gaps and directions for future research to develop theory and a practical understanding of SCR.
Originality/value
The current literature on SCR has been assessed based on its definition and utilization. The current paper bridges this gap by synthesizing the diverse academic journal papers into the categories based on the design continuum, relationship continuum, process continuum and economic continuum. In addition, it highlights the gaps in industry context, theoretical contribution, geographic location, and research methods applied and addresses the scope for further research.
This study focuses on the four human-resource-management (HRM) practices that characterize high involvement (HI), the most advanced approach to employee involvement. These practices push power, information, rewards, and knowledge down to the lowest level of an organization. The impact of these practices on a manufacturing firm's mass-customization capability (MCC) is examined, along with the way this impact is influenced by the degree of product customization (DPC) that the firm provides to its customers. Based on survey data from 195 manufacturing plants in three industries and eight countries, the study finds empirical evidence that these practices improve MCC when they are adopted jointly and, at the same time, DPC surpasses a certain threshold value. The same practices, when implemented independent of one another, do not have statistically significant effects on MCC. Furthermore, as DPC drops below the threshold, the effect of this configuration of practices becomes non-significant at conventional p levels and gradually decreases until it turns into a negative effect, which comes closer to statistical significance when the DPC reaches its minimum. This study is the first to examine the effects of HRM practices on MCC by taking full advantage of the contingent configurational perspective that is strongly advocated in the strategic HRM literature. The results of this study extend the debate on the organizational enablers of MCC and, at the same time, add to the well-established discussion on the performance outcomes of HRM practices in general and HI practices in particular.
This study examines the influence of three strategic orientations (customer, competitor and innovation) on mass customisation (MC) capability via the organisational learning process known as customisation knowledge utilisation (CKU). The moderating effect of product life cycle (PLC) is also investigated. Using data collected from 204 manufacturers, we show that all three strategic orientations positively contribute to MC capability, both directly and indirectly through CKU. Further, our empirical findings suggest that the effects of customer, competitor and innovation orientation on MC capability are contingent on PLC. The effects of customer orientation on CKU and the effects of competitor orientation on CKU and MC capability are stronger when a product is in the maturity stage of its life cycle, whereas the effect of innovation orientation on CKU and MC capability are stronger in the growth stage. These findings suggest that to effectively improve MC capability, managers need to leverage external and internal orientations at different stages of the PLC.
The purpose of this study is to test the impact of supply chain management practices on supply chainperformance in terms of supply chain efficiency and supply chain effectiveness. Additionally, we investigate themoderating effect of competitive intensity on the relationship between supply chain management practices andsupply chain performance. Data for this research were collected from 104 manufacturing companies in Jordan.Hierarchical regressions were used to test the hypothesized relationships. The results indicate that three supplychain management practices, internal integration, information sharing, and postponement, but not supplierintegration and customer integration, significantly and positively affect supply chain efficiency performance.Competitive intensity moderates the relationship between each of internal integration, supplier integration, andcustomer integration, and supply chain efficiency performance. The results also show that three supply chainmanagement practices, internal integration, customer integration, and postponement, but not supplier integrationand information sharing, significantly and positively affect supply chain effectiveness performance. Competitiveintensity moderates the relationship between each of customer integration and information sharing, and supplychain effectiveness performance.
Humans are genetically unique and therefore express diseases and respond to medical treatments differently. Regenerative Medicine offers the best possible outcome for a range of chronic diseases, through the use of personalized therapeutic cellular treatments (i.e. autologous treatments). The personalization of cellular therapies conforms with Pine’s definition of mass customization; the mass production of individually customized goods and services. We use case study research design to explore the complex operational issues surrounding the mass customization of cellular therapies.
There has been increasing interest by biotechnology companies and regulators in technologies that allow laboratory and manufacturing processes to be performed in small-scale, modularized ‘closed’ environments. Empirical data from technology providers has shown that their equipment can automate many laboratorial production processes and capture information required for quality control. These innovative technologies allow manufacturing to be decentralized without sacrificing quality. Further improvement in flexibility and speed are critical for cellular therapies as such therapies can be highly perishable and difficult to transport. The regulators’ response has been to grant exceptions for autologous therapies (products) through Excluded Goods Orders, shifting responsibility for patient safety to the attending physician. Early results are mixed, but indicate that biotechnology companies and clinical practitioners have been able to innovatively expand their operations in the healthcare market to move from a small scale to a mass scale customization model.
This paper offers an insight into how innovative regulation and technology can be mutually supportive in the business of mass customized cell therapies. However, the consequences in terms of patient outcomes, safety and public trust remain an area of concern.
Buyer-supplier relationships play an important role in an organization’s ability to respond to dynamic and unpredictable change. If the relationship is too restrictive, flexibility will be difficult to achieve and, if it is too lenient the risk of opportunism will be present. This paper provides a framework for understanding how buyer-supplier relationships have evolved over the past two decades from transaction processes based on arms-length agreements to collaborative processes based on trust and information sharing. To achieve this objective, buyer-supplier relationships are reviewed from the perspectives of transaction cost theory, strategy-structure theory and resource-based theory of the firm. Findings from early supply chain research are contrasted with the findings of more current research to provide a better understanding of how these relationships have changed. Current theory is extended by offering two proposals that test the influence of trust and information sharing and a third proposal that rejects the notion that supply chain alliances lead to monopolistic practices.
Purpose
The impact of information technology (IT) on mass customization (MC) capability has been implied in the literature but seldom subjected to empirical examination. This study seeks to theoretically relate four types of IT applications with MC capability and empirically examines these relationships.
Design/methodology/approach
This study identifies four types of IT that potentially support MC capability, including product configurator IT, new product development IT, manufacturing IT, and supplier collaboration IT. Drawing on organizational information processing theory, this study associates the four IT types with a manufacturer's MC capability. A structural equation model is tested using survey data collected from a sample of manufacturing plants that focus on product customization.
Findings
The empirical results indicate that two of the four IT types strongly support a manufacturer's MC capability.
Research limitations/implications
No strong relationship between configurator IT and MC was observed, which calls for further investigation. Data used are cross‐sectional in nature. A set of refined IT measures should be developed in future studies. In addition, future studies could control for the effects of more variables that may impact IT use by mass customizers.
Practical implications
The paper identifies managerial opportunities for investing in IT to support or enhance MC capability.
Originality/value
This study provides a theoretical foundation for the IT‐MC relationship and develops a classification framework of IT applications in manufacturing plants. The study is one of the first efforts that empirically examines the impact of multiple types of IT applications on MC.
This paper presents a conceptual framework that hypothesizes the nature of the relationships between a firm’s use of Internet-based
information technology (IT), supply chain planning capability, and operational performance. Using data from 266 manufacturing
sites and structural equation modeling, we show that the impact of IT on operational performance is contingent upon the intent
of its use. Specifically, our results suggest that IT’s use in exploiting existing opportunities has both a direct effect
and an indirect effect, mediated through supply chain planning capabilities, on operational performance. In contrast, when
IT is used to explore new opportunities, it has neither a direct nor an indirect effect on operational performance. Implications
of these research findings are reported.
This study explores and documents the processes by which large manufacturing firms develop and produce radical products. Seven projects from five Fortune 500 firms were analyzed over a 3‐year period. Through the use of these case studies, we found common themes emerging in the way these firms manage their new product development (NPD) process in this turbulent environment. Our observations suggest that these high levels of uncertainty result in several unique challenges in developing the project, especially in the areas of managing functional integration and finding a divisional home for the emerging product.
Organizations have been quick to realize that involving suppliers in new product/process/service development efforts has the potential for significant results. Numerous studies have highlighted the fact that supplier participation in product development projects can help reduce cost, reduce concept to customer development time, improve quality, and provide innovative technologies that can help capture market share. However, not all efforts are successful. Supplier integration is most successful when driven by a formalized process that considers supplier capabilities, level of complexity of the technology, and degree of risk. Leading companies conduct a formal in-depth supplier evaluation and risk assessment prior to supplier involvement on the project team.
In this article, we provide guidance for substantive researchers on the use of structural equation modeling in practice for theory testing and development. We present a comprehensive, two-step modeling approach that employs a series of nested models and sequential chi-square difference tests. We discuss the comparative advantages of this approach over a one-step approach. Considerations in specification, assessment of fit, and respecification of measurement models using confirmatory factor analysis are reviewed. As background to the two-step approach, the distinction between exploratory and confirmatory analysis, the distinction between complementary approaches for theory testing versus predictive application, and some developments in estimation methods also are discussed.
Much of the research on mass customization strategy implementation reflects a functional focus, considering product design, marketing, manufacturing or sourcing, individually. This paper takes a step towards integrating these perspectives into a more systemic view of mass customization strategy implementation. More precisely, the paper explores how a firm's supply chain – meant as the whole of its supply, manufacturing and distribution networks – should be configured when different degrees of customization are offered. The empirical research consists of a multiple case study including firms in the telecommunications, transportation vehicles and food processing equipment industries. Case analyses highlighted that the degrees of freedom customers have in specifying product features, heavily affects the supply-chain configuration, as well as product architecture and, ultimately, firm performances. Our findings further show that two peculiar supply-chain configurations can be identified, each one suggesting an isomorphism between market characteristics, product structure and supply-chain configuration.
Much has been written about the conceptual nature of mass customization, and the success of several best business practitioners in the area have been well documented. Most companies, however, are not textbook examples of best practice, but rather are making incremental progress towards mass customization based on a mass-production heritage. This paper presents the findings of a case study that investigated a mass customization initiative at a leading mobile telephone manufacturer in Sweden. The primary objective of the study was to determine the implications of a radically new manufacturing initiative for the company – the production of a customized, entry-level mobile telephone. The differences between the traditional scenario of the mass production of standardized products at the company and that of the new customized production were also sought. The findings of the study, which are presented using the product, process and system perspectives, are aided by a number of customization-related frameworks from the literature. The discussion includes the impact of moving the customization order point downstream in the value chain in terms of increased efficiency and reduced lead times, the reduced requirement for manufacturing flexibility with shifting production system boundaries, and the company's status as a mass customizer.
This paper introduces the aim, scope and content of this special issue on mass customization. It begins by providing a background review of mass customization, which revolves around two questions: what is mass customization, and why mass customize? By focusing on these, the paper presents definitions and explanations of the different approaches to mass customization, and describes the potential reasons for and benefits of mass customization. In addition to setting the scene for the special issue, this introductory review asserts that there is a relative dearth of research on how to design and operate a manufacturing system capable of mass customizing. This is a system design or configuration issue, which involves determining the most appropriate or viable design for the available range of multiple and interdependent design variables. However, despite the strong interest in configurational research in the business and operations strategy area, there are few works that develop and propose models for understanding how to mass customize.
It is widely recognized that new product development (NPD) is a highly interdependent process, yet efforts to empirically model the interdependence and examine its effect on firm performance are scarce. Our study addresses this research gap. We model firms' abilities to collectively collaborate with suppliers, customers, and internal employee teams in NPD as collaborative competence and examine its impact on project and market performance. Using responses collected from 189 NPD managers, we find empirical evidence for collaborative competence and its differential impact on project and market performance. Specifically, we find that collaborative competence has a direct impact on project performance, but its impact on market performance is indirect, mediated through project performance. The results have significant managerial implications; achieving superior market performance from inter- and intra-organizational involvement is contingent on achieving superior project performance, and companies that fail to achieve desired project performance outcomes will also fail in achieving market performance goals.
In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advan- tage is the relationship between firms and identify four potential sources of interor- ganizational competitive advantage: (1) relation-specific assets, (2) knowledge- sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view. Scholars in the strategy field are concerned fundamentally with explaining differential firm performance (Rumelt, Schendel, & Teece, 1991). As strategy scholars have searched for sources of competitive advantage, two prominent views have emerged regarding the sources of super- normal returns. The first-the industry structure view-associated with Porter (1980), suggests that supernormal returns are primarily a func- tion of a firm's membership in an industry with favorable structural characteristics (e.g., rela- tive bargaining power, barriers to entry, and so on). Consequently, many researchers have fo- cused on the industry as the relevant unit of analysis. The second view-the resource-based view (RBV) of the firm-argues that differential firm performance is fundamentally due to firm heterogeneity rather than industry structure (Barney, 1991; Rumelt, 1984, 1991; Wernerfelt, 1984). Firms that are able to accumulate re- sources and capabilities that are rare, valuable, nonsubstitutable, and difficult to imitate will achieve a competitive advantage over compet-
Mass customization capabilities enable firms to design, produce, and deliver a high volume of differentiated products that meet specific customer needs in a timely manner and at close to mass‐production prices. A critical part of mass customization is simultaneously achieving customer responsiveness, cost efficiency, and high volume production in the manufacturing system. This research describes mass customization and provides a framework to understand the relationships among time‐based manufacturing practices, mass customization, and value to the customer. It involves the development of an instrument to measure mass customization. Data were collected from 303 manufacturing firms of various size, location, and industry to develop the instrument and test the relationships in the framework. The primary research method was structural equation modeling using LISREL. The study indicates that firms with high levels of time‐based manufacturing practices have high levels of mass customization and value to the customer. Also, firms with high levels of mass customization have high levels of value to customer.
This paper examines the effectiveness of three commonly practiced methods used to resolve uncertainty in multi‐stage manufacturing systems: safety stock under regenerative material requirements planning (MRP) updates, safety capacity under regenerative MRP updates, and net change MRP updates, i.e., continuous rather than regenerative (periodic) updates. The use of safety stock reflects a decision to permanently store materials and labor capacity in the form of inventory. When unexpected shortages arise between regenerative MRP updates, safety stock may be depleted but it will be replenished in subsequent periods. The second method, safety capacity, overstates the MRP capacity requirements at the individual work centers by a prescribed amount of direct labor. Safety capacity either will be allocated to unanticipated requirements which arise between MRP regenerations or will be spent as idle time. The third method, net change, offers a means of dealing with uncertainty by rescheduling instead of buffering, provided there is sufficient lead time to execute the changes in the material and capacity plans.
Much of the inventory management research has addressed the use of safety stock as a buffer against uncertainty for a single product and manufacturing stage. However, there has been no work which evaluates the performance of safety stock relative to other resolution methods such as safety capacity or more frequent planning revisions. In this paper, a simulation model of a multi‐stage (fabrication and assembly) process is used to characterize the behavior of the three resolution methods when errors are present in the demand and time standard estimates. Four end products are completed at an assembly center and altogether, the end products require the fabrication of twelve component parts in a job shop which contains eight work centers. In addition to the examination of the three methods under different sources and levels of uncertainty, different levels of bill of material commonality, MRP planned lead times, MRP lot sizes, equipment set‐up times and priority dispatching rules are considered in the experimental design.
The simulation results indicate that the choice among methods depends upon the source of uncertainty, and costs related to regular time employment, employment changes, equipment set ups and materials investment. For example, the choice between safety stock and safety capacity represents a compromise between materials investment and regular time employment costs. The net change method is not designed to deal effectively with time standard errors, although its use may be preferred over the two buffering alternatives when errors are present in the demand forecasts and when the costs of employment changes and equipment set ups are low. The simulation results also indicate that regardless of the method used, efforts to improve forecasts of demands or processing times may be justified by corresponding improvements in manufacturing performance.
In this paper, we expand upon recent research by Frohlich and Westbrook [J. Operations Manage. 19 (2) (2001) 185] that characterizes the influence of supply chain integration on performance. Introducing supply chain integration intensity as a proxy variable for Frohlich and Westbrook’s [J. Operations Manage. 19 (2) (2001) 185] ‘outward‐facing supply chain strategy’, we investigate the ways that manufacturing‐based competitive capabilities mediate the relationship between supply chain integration and business performance. While previous research suggests that supply chain integration is directly related to superior business performance, the mediating role of manufacturing capabilities has not been explored. Using hierarchical regression analysis, we develop and test a theory‐based model using a sample of consumer products manufacturers. Contrary to Frohlich and Westbrook’s [J. Operations Manage. 19 (2) (2001) 185] assertions regarding the applicability of the ‘outward‐facing strategy’ to the consumer goods sector, our results provide empirical evidence that supply chain integration intensity leads directly to improved business performance, thus corroborating the conventional wisdom concerning the increasing importance of supply chain integration in the consumer products sector. In addition, this study uncovers empirical evidence for the mediating role of manufacturing‐based competitive capabilities in supply chain management. These results support the growing call for a broader, more generalized view of manufacturing strategy.
Mass customization is a paradox‐breaking manufacturing reality that combines the unique products of craft manufacturing with the cost‐efficient manufacturing methods of mass production. Although this phenomenon is known to exist in practice, academic research has not adequately investigated this new form of competition. In this research, we develop a configurational model for classifying mass customizers based on customer involvement in design and product modularity. We validate this typology through an empirical analysis and classification of 126 mass customizers. We also explore manufacturing systems and performance implications of the various mass customization configurations.
This paper investigates project management methods used during the execution phase of new product development projects. Based on prior field observations, organizational theory and product development literature, we pose hypotheses regarding the effectiveness of the project execution methods of formality, project management autonomy and resource flexibility. A cross‐sectional survey sample of 120 completed new product development projects from a variety of assembled products industries is analyzed via hierarchical moderated regression. We find that the project execution methods are positively associated with project execution success. Further, these methods are effective singly and collectively, suggesting that firms can “balance firmness and flexibility” in product development via appropriate execution methods. Surprisingly, the effectiveness of these methods is not contingent on the product or process technology novelty inherent in a given development project. The findings suggest that firms should adopt high levels of these approaches, and that a variety of projects can be managed using broadly similar project execution methods. The findings also suggest limitations on the application of organizational information processing theory to the context of product development projects. Directions for additional theory development are outlined.
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.
This paper provides an in‐depth review of the different methods available for assessing the construct validity of measures used in empirical research. Construct validity pertains to the degree to which the measure of a construct sufficiently measures the intended concept (e.g., is free of measurement error) and has been shown to be a necessary component of the research process. In order to illustrate the steps required to establish construct validity, we drew upon empirical research in the operations management area of manufacturing flexibility.
Though there is a wide acceptance of the strategic importance of integrating operations with suppliers and customers in supply chains, many questions remain unanswered about how best to characterize supply chain strategies. Is it more important to link with suppliers, customers, or both? Similarly, we know little about the connections between supplier and customer integration and improved operations performance. This paper investigated supplier and customer integration strategies in a global sample of 322 manufacturers. Scales were developed for measuring supply chain integration and five different strategies were identified in the sample. Each of these strategies is characterized by a different “arc of integration”, representing the direction (towards suppliers and/or customers) and degree of integration activity. There was consistent evidence that the widest degree of arc of integration with both suppliers and customers had the strongest association with performance improvement. The implications for our findings on future research and practice in the new millennium are considered.
Much has been made about how efficient it is to develop new products from independent, modular components. But 350 billion calculations on U.S. Patent Office data reveal that the true breakthrough products are more likely to come from designs that employ the far messier and more unpredictable interdependent parts.
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Strategic management researchers have emphasized concept development but generally have ignored construct measurement issues. Because a strong linkage between concepts and their measures enhances theory development, it is necessary to validate strategy measures systematically. In this vein, this paper (a) critically reviews the state of construct measurement in organizational strategy research; (b) develops a set of key criteria specifically for strategy measurement; and (c) proposes some recommendations for integrating strategy concepts with their measures.
Today's supply chain managers have been bombarded with a wide variety of the socalled leading-edge supply chain strategies. New terminologies and initiatives are being developed constantly. However not all these initiatives or strategies are appropriate for all firms. Companies need to first understand the uncertainties faced by the demand and supply of its products and then try to match these uncertainties with the right supply chain strategies. Based on an analysis of the uncertainties of supply and demand faced by the firm, this article develops a framework that can assist managers in developing the right supply chain strategy for their products.
Modular product architectures am being adopted as the basis for new product designs in a growing number of markets. In this article, the author explains how adoption of modular product architectures makes possible new kinds of processes for creating and realizing products, as well as new approaches to identifying and managing organizational knowledge used in product creation and realization. When managed strategically, modular product, process, and knowledge architectures enable firms to create greater product variety, introduce technologically improved products more rapidly, bring new products to market more quickly, and lower costs of product creation and realization. This article investigates the ways in which the strategic use of modular architectures can affect the marketing process. It explains ways in which modular architectures change the technologically determined possibilities for product creation and realization in the marketing process, create new market dynamics, and lead to new objectives and methods for the marketing process.
More demanding customer needs in terms of quality, variety, delivery (both fast and reliable), and competitive pricing challenge an increasing number of companies to restructure their supply chains. An appealing option is to delay, or postpone, the point of product differentiation, that is deferring the process in which products are transformed according to unique customer specifications. Advances in technology and the gradual removal of barriers to trade in Europe increasingly enable companies to apply postponement principles in their supply chain strategies. In this article, we provide an in-depth analysis of the experiences of four companies in managing the change process associated with implementing such strategies. Operating and organizational characteristics are identified to assess the attractiveness of postponement in their specific business settings. It was found that in particular, an organization’s administrative heritage and the lack of an overall supply chain vision can be major bottlenecks in managing the change process. For a successful implementation of postponement, a company’s management should establish the appropriate mix of standardization and customization in the supply chain. Differences in the internal organization and the external demands for product specificity require different postponement strategies.
This paper provides an in-depth review of the different methods available for assessing the construct validity of measures used in empirical research. Construct validity pertains to the degree to which the measure of a construct sufficiently measures the intended concept (e.g., is free of measurement error) and has been shown to be a necessary component of the research process. In order to illustrate the steps required to establish construct validity, we drew upon empirical research in the operations management area of manufacturing flexibility.
This article presents a study of the differences between firms' inbound and outbound preventive activities in logistics flows: in addition, a study of the association between the firms' inbound and outbound preventive activities and the occurrence of disturbances is analysed. Initially, the research is based upon an inductive approach. Thereafter a deductive approach is performed in order to verify or reject the empirical findings of the inductive approach. The research is thus based upon a two-phase process utilising methodological triangulation. Phase one applies qualitative methods that explore the overall environment of preventive activities in supply chains of the automotive industry. The outcome is generated and based upon the empirical findings from a case study of a Swedish car manufacturer. Phase two applies quantitative methods to test the generated empirical findings that originate from phase one, but now in a wider context. It is in part concluded that the preventive activities in the inbound logistics flows from subcontractors, and the preventive activities in the outbound logistics flows to customers, differ from each other. There is also an association between the preventive activities in the inbound logistics flows from subcontractors and the preventive activities in the outbound logistics flows to customers. Furthermore, a model and a conceptual framework of prevention scenarios are introduced in order to describe and classify the firms' inbound and outbound preventive activities in logistics flows. Finally, it will be shown that the results indicate that there is in part an association between the preventive activities and the occurrence of quantitative and qualitative disturbances in the firms' inbound and outbound logistics flows.
This paper examines the effectiveness of three commonly practiced methods used to resolve uncertainty in multi‐stage manufacturing systems: safety stock under regenerative material requirements planning (MRP) updates, safety capacity under regenerative MRP updates, and net change MRP updates, i.e., continuous rather than regenerative (periodic) updates. The use of safety stock reflects a decision to permanently store materials and labor capacity in the form of inventory. When unexpected shortages arise between regenerative MRP updates, safety stock may be depleted but it will be replenished in subsequent periods. The second method, safety capacity, overstates the MRP capacity requirements at the individual work centers by a prescribed amount of direct labor. Safety capacity either will be allocated to unanticipated requirements which arise between MRP regenerations or will be spent as idle time. The third method, net change, offers a means of dealing with uncertainty by rescheduling instead of buffering, provided there is sufficient lead time to execute the changes in the material and capacity plans.
Much of the inventory management research has addressed the use of safety stock as a buffer against uncertainty for a single product and manufacturing stage. However, there has been no work which evaluates the performance of safety stock relative to other resolution methods such as safety capacity or more frequent planning revisions. In this paper, a simulation model of a multi‐stage (fabrication and assembly) process is used to characterize the behavior of the three resolution methods when errors are present in the demand and time standard estimates. Four end products are completed at an assembly center and altogether, the end products require the fabrication of twelve component parts in a job shop which contains eight work centers. In addition to the examination of the three methods under different sources and levels of uncertainty, different levels of bill of material commonality, MRP planned lead times, MRP lot sizes, equipment set‐up times and priority dispatching rules are considered in the experimental design.
The simulation results indicate that the choice among methods depends upon the source of uncertainty, and costs related to regular time employment, employment changes, equipment set ups and materials investment. For example, the choice between safety stock and safety capacity represents a compromise between materials investment and regular time employment costs. The net change method is not designed to deal effectively with time standard errors, although its use may be preferred over the two buffering alternatives when errors are present in the demand forecasts and when the costs of employment changes and equipment set ups are low. The simulation results also indicate that regardless of the method used, efforts to improve forecasts of demands or processing times may be justified by corresponding improvements in manufacturing performance.
In this paper, we expand upon recent research by Frohlich and Westbrook [J. Operations Manage. 19 (2) (2001) 185] that characterizes the influence of supply chain integration on performance. Introducing supply chain integration intensity as a proxy variable for Frohlich and Westbrook’s [J. Operations Manage. 19 (2) (2001) 185] ‘outward-facing supply chain strategy’, we investigate the ways that manufacturing-based competitive capabilities mediate the relationship between supply chain integration and business performance. While previous research suggests that supply chain integration is directly related to superior business performance, the mediating role of manufacturing capabilities has not been explored. Using hierarchical regression analysis, we develop and test a theory-based model using a sample of consumer products manufacturers. Contrary to Frohlich and Westbrook’s [J. Operations Manage. 19 (2) (2001) 185] assertions regarding the applicability of the ‘outward-facing strategy’ to the consumer goods sector, our results provide empirical evidence that supply chain integration intensity leads directly to improved business performance, thus corroborating the conventional wisdom concerning the increasing importance of supply chain integration in the consumer products sector. In addition, this study uncovers empirical evidence for the mediating role of manufacturing-based competitive capabilities in supply chain management. These results support the growing call for a broader, more generalized view of manufacturing strategy.
This paper investigates the impact of Supply Chain Management on logistical performance indicators in food supply chains. From a review of quantitative and more qualitative managerial literature, we believe that Supply Chain Management should be concerned with the reduction or even elimination of uncertainties to improve the performance of the chain. The following clusters of sources of uncertainty are identified: order forecast horizon, input data, administrative and decision processes and inherent uncertainties. For each source of uncertainty, several improvement principles are identified. A case study was conducted in a food chain in which a simulation model helped quantify the effects of alternative configurations and operational management concepts. By comparing this simulation study with a pilot study, the model is validated against real data, and organisational consequences are identified. The results of the case study suggest that reduction of uncertainties can improve service levels significantly, although current supply chain configurations restrict possible benefits. The availability of real-time information systems is found to be a requirement for obtaining efficient and effective Supply Chain Management concepts.
This study develops a framework for analysing time-based competition and examines four supply-chain management strategies in make-to-order markets which can lead to cycle-time reduction: cross-functional product design participation, ‘just-in-time’ purchasing systems with suppliers, improved supplier delivery and quality performance, and work-in-process lot size reduction. A structural model and relevant measures were developed to assess the impact of these strategies on time-based competition, and the model was tested using interview data with managers in 40 plants from nine industries. Both just-in-time purchasing and supplier performance were found to have a significant effect on leadtime competitiveness, while cross-functional design and lotsize reduction did not. Several explanations for the lack of significance of the latter two variables were suggested based on qualitative observations and post-hoc analysis. Although the analysis suggests that the greatest progress towards time-based competitiveness can be made in the area of procurement of materials, the study points to the importance of managing the entire supply chain to attain this strategic advantage.
Do not be seduced by the allure of mass customization. Carefully assess the technology and the market demand before committing your company to such a strategy.
The purpose of this paper is to explain why task uncertainty is related to organizational form. In so doing the cognitive limits theory of Herbert Simon was the guiding influence. As the consequences of cognitive limits were traced through the framework various organization design strategies were articulated. The framework provides a basis for integrating organizational interventions, such as information systems and group problem solving, which have been treated separately before.
While research has identified potential benefits of specific technology development practices, the literature has largely failed to identify the contextual issues that influence these practices. This paper explores the contextual differences of plants to better understand what types of companies place more emphasis on process technology and have a more disciplined approach to product development. We propose a theoretical framework for understanding the relationship between the context in which a plant operates and the process technology and the product development practices used within the plant. We test this framework using data from 163 plants to determine what types of companies are most likely to emphasize process technology and product development at the plant level. Our results indicate that environmental, organizational and strategic contextual factors are important to the technology practices of a plant.
Bief-the core idea The Idea in Practice-p utting the idea to work 3 What Is the Righr Supply ChaiD fo. your product? 15 Further Readilg A iist ofrelated materials, with annotations to guide further exploration of the articlds ideas and applications Product 8509 Are you frequently saddledwith exces5 in-ventory? Do yoir suffer poduct sholtages that have cultorner5 leaving sioles in a hufi Do these supplychain headaches pet' ti{ despite your investments in technolo-gies such as alnornated walehousing and Gpid logirtics? lf so, you rnay be using the wrong supply chain forthe type of poduct you sell.sup-pose your offering is funational*it sati{ies basic,unchanging needt and has a long life cycle, Iow margins. and stable demand. {Think paper towels or lighl bulbs) In this case, you need an efRcienl 5u pply chain-which minimizes productron, transpona-tion, and Storaqe coJts. BLn what il your product is mnovolive-il has great vanety, a short life cycle, high profit rlargins,and volatile denEnd? (A line oflaptopswhh a lange of novel features is one example) Forthis offering, you require a responsive supplychain. Fast and flexi' ble, i helps)lcu rnanage uncenainty through strategiet trJch as cutting lead tirnes and establishinq inventory or excess-capacny buffers. Design the right supplychain for your prod_ uct, and youl profrt! soal Forexample, by building responsiveness into lls chain, inno-vative skrwear comFEny Spon obetrmyet Rduced t5 o/er-Bnd underpoduc(ion .o!ts by half-boosling prcfits 60%.