Competitive edge through operations management

A view has emerged within manufacturing and service organizations that the operations management function can hold the key to achieving competitive edge. This has recently been emphasized by the demands for greater variety and higher quality which must be set against a background of increasing cost of resources. As nations' trade barriers are progressively lowered and removed, so producers of goods and service products are becoming more exposed to competition that may come from virtually anywhere around the world. To simply survive in this climate many organizations have found it necessary to improve their manufacturing or service delivery systems. To become real ''winners'' some have adopted a strategic approach to operations and completely reviewed and restructured their approach to production system design and operations planning and control. The articles in this issue of the International journal of Operations & Production Management have been selected to illustrate current thinking and practice in relation to this situation. They are all based on papers presented to the Sixth International Conference of the Operations Management Association-UK which was held at Aston University in June 1991. The theme of the conference was "Achieving Competitive Edge" and authors from 15 countries around the world contributed to more than 80 presented papers. Within this special issue five topic areas are addressed with two articles relating to each. The topics are: strategic management of operations; managing change; production system design; production control; and service operations. Under strategic management of operations De Toni, Filippini and Forza propose a conceptual model which considers the performance of an operating system as a source of competitive advantage through the ''operation value chain'' of design, purchasing, production and distribution. Their model is set within the context of the tendency towards globalization. New's article is somewhat in contrast to the more fashionable literature on operations strategy. It challenges the validity of the current idea of ''world-class manufacturing'' and, instead, urges a reconsideration of the view that strategic ''trade-offs'' are necessary to achieve a competitive edge. The importance of managing change has for some time been recognized within the field of organization studies but its relevance in operations management is now being realized. Berger considers the use of "organization design", ''sociotechnical systems'' and change strategies and contrasts these with the more recent idea of the ''dialogue perspective''. A tentative model is suggested to improve the analysis of different strategies in a situation specific context. Neely and Wilson look at an essential prerequisite if change is to be effected in an efficient way, namely product goal congruence. Using a case study as its basis, their article suggests a method of measuring goal congruence as a means of identifying the extent to which key performance criteria relating to quality, time, cost and flexibility are understood within an organization. The two articles on production systems design represent important contributions to the debate on flexible production organization and autonomous group working. Rosander uses the results from cases to test the applicability of ''flow groups'' as the optimal way of organizing batch production. Schuring also examines cases to determine the reasons behind the adoption of ''autonomous work groups'' in The Netherlands and Sweden. Both these contributions help to provide a greater understanding of the production philosophies which have emerged as alternatives to more conventional systems -------for intermittent and continuous production. The production control articles are both concerned with the concepts of ''push'' and ''pull'' which are the two broad approaches to material planning and control. Hirakawa, Hoshino and Katayama have developed a hybrid model, suitable for multistage manufacturing processes, which combines the benefits of both systems. They discuss the theoretical arguments in support of the system and illustrate its performance with numerical studies. Slack and Correa's concern is with the flexibility characteristics of push and pull material planning and control systems. They use the case of two plants using the different systems to compare their performance within a number of predefined flexibility types. The two final contributions on service operations are complementary. The article by Voss really relates to manufacturing but examines the application of service industry concepts within the UK manufacturing sector. His studies in a number of companies support the idea of the ''service factory'' and offer a new perspective for manufacturing. Harvey's contribution by contrast, is concerned with the application of operations management principles in the delivery of professional services. Using the case of social-service provision in Canada, it demonstrates how concepts such as ''just-in-time'' can be used to improve service performance. The ten articles in this special issue of the journal address a wide range of issues and situations. Their common aspect is that, together, they demonstrate the extent to which competitiveness can be improved via the application of operations management concepts and techniques.

Introduction : the role of quality, production and technological innovation in improving competitive performance

Quality, production and technological innovation management rank among the most important matters of concern to modern manufacturing organisations. They can provide companies with the decisive means of gaining a competitive advantage, especially within industries where there is an increasing similarity in product design and manufacturing processes. The papers in this special issue of International Journal of Technology Management have all been selected as examples of how aspects of quality, production and technological innovation can help to improve competitive performance. Most are based on presentations made at the UK Operations Management Association's Sixth International Conference held at Aston University at which the theme was 'Getting Ahead Through Technology and People'. At the conference itself over 80 papers were presented by authors from 15 countries around the world. Among the many topics addressed within the conference theme, technological innovation, quality and production management emerged as attracting the greatest concern and interest of delegates, particularly those from industry. For any new initiative to be implemented successfully, it should be led from the top of the organization. Achieving the desired level of commitment from top management can, however, be a difficulty. In the first paper of this issue, Mackness investigates this question by explaining how systems thinking can help. In the systems approach, properties such as 'emergence', 'hierarchy', 'commnication' and 'control' are used to assist top managers in preparing for change. Mackness's paper is then complemented by Iijima and Hasegawa's contribution in which they investigate the development of Quality Information Management (QIM) in Japan. They present the idea of a Design Review and demonstrate how it can be used to trace and reduce quality-related losses. The next paper on the subject of quality is by Whittle and colleagues. It relates to total quality and the process of culture change within organisations. Using the findings of investigations carried out in a number of case study companies, they describe four generic models which have been identified as characterising methods of implementing total quality within existing organisation cultures. Boaden and Dale's paper also relates to the management of quality, but looks specifically at the construction industry where it has been found there is still some confusion over the role of Quality Assurance (QA) and Total Quality Management (TQM). They describe the results of a questionnaire survey of forty companies in the industry and compare them to similar work carried out in other industries. Szakonyi's contribution then completes this group of papers which all relate specifically to the question of quality. His concern is with the two ways in which R&D or engineering managers can work on improving quality. The first is by improving it in the laboratory, while the second is by working with other functions to improve quality in the company. The next group of papers in this issue all address aspects of production management. Umeda's paper proposes a new manufacturing-oriented simulation package for production management which provides important information for both design and operation of manufacturing systems. A simulation for production strategy in a Computer Integrated Manufacturing (CIM) environment is also discussed. This paper is then followed by a contribution by Tanaka and colleagues in which they consider loading schedules for manufacturing orders in a Material Requirements Planning (MRP) environment. They compare mathematical programming with a knowledge-based approach, and comment on their relative effectiveness for different practical situations. Engstrom and Medbo's paper then looks at a particular aspect of production system design, namely the question of devising group working arrangements for assembly with new product structures. Using the case of a Swedish vehicle assembly plant where long cycle assembly work has been adopted, they advocate the use of a generally applicable product structure which can be adapted to suit individual local conditions. In the last paper of this particular group, Tay considers how automation has affected the production efficiency in Singapore. Using data from ten major industries he identifies several factors which are positively correlated with efficiency, with capital intensity being of greatest interest to policy makers. The two following papers examine the case of electronic data interchange (EDI) as a means of improving the efficiency and quality of trading relationships. Banerjee and Banerjee consider a particular approach to material provisioning for production systems using orderless inventory replenishment. Using the example of a single supplier and multiple buyers they develop an analytical model which is applicable for the exchange of information between trading partners using EDI. They conclude that EDI-based inventory control can be attractive from economic as well as other standpoints and that the approach is consistent with and can be instrumental in moving towards just-in-time (JIT) inventory management. Slacker's complementary viewpoint on EDI is from the perspective of the quality relation-ship between the customer and supplier. Based on the experience of Lucas, a supplier within the automotive industry, he concludes that both banks and trading companies must take responsibility for the development of payment mechanisms which satisfy the requirements of quality trading. The three final papers of this issue relate to technological innovation and are all country based. Berman and Khalil report on a survey of US technological effectiveness in the global economy. The importance of education is supported in their conclusions, although it remains unclear to what extent the US government can play a wider role in promoting technological innovation and new industries. The role of technology in national development is taken up by Martinsons and Valdemars who examine the case of the former Soviet Union. The failure to successfully infuse technology into Soviet enterprises is seen as a factor in that country's demise, and it is anticipated that the newly liberalised economies will be able to encourage greater technological creativity. This point is then taken up in Perminov's concluding paper which looks in detail at Russia. Here a similar analysis is made of the concluding paper which looks in detail at Russia. Here a similar analysis is made of the Soviet Union's technological decline, but a development strategy is also presented within the context of the change from a centralised to a free market economy. The papers included in this special issue of the International Journal of Technology Management each represent a unique and particular contribution to their own specific area of concern. Together, however, they also argue or demonstrate the general improvements in competitive performance that can be achieved through the application of modern principles and practice to the management of quality, production and technological innovation.

Market-driven strategies and the design of flexible production systems: evidence from the electronics industry

Links the concept of market-driven business strategies with the design of production systems. It draws upon the case of a firm which, during the last decade, changed its strategy from being “technology led” to “market driven”. The research, based on interdisciplinary fieldwork involving long-term participant observation, investigated the factors which contribute to the successful design and implementation of flexible production systems in electronics assembly. These investigations were conducted in collaboration with a major computer manufacturer, with other electronics firms being studied for comparison. The research identified a number of strategies and actions seen as crucial to the development of efficient flexible production systems, namely: effective integration of subsystems, development of appropriate controls and performance measures, compatibility between production system design and organization structure, and the development of a climate conducive to organizational change. Overall, the analysis suggests that in the electronics industry there exists an extremely high degree of environmental complexity and turbulence. This serves to shape the strategic, technical and social structures that are developed to match this complexity, examples of which are niche marketing, flexible manufacturing and employee harmonization.

Design and implementation of production systems for high variety electronics assembly

Information technology companies are having to broaden their overall strategic view in deference to the premise that it is better to be market-driven than technology-led. Cost and technical performance are no longer the only considerations, as quality and service now demand equal recognition. The production of a high volume single item has given way to that of low volume multiple items, which in turn requires some modification of production systems and brings flexible manufacturing, Just-in-Time production and total quality control into sharper focus for the achievement of corporate objectives.

Exploring demand and production planning challenges in the food processing industry:a case study

This paper explores demand and production management challenges in the food processing industry. The goal is to identify the main production planning constraints and secondly to explore how each of these constraints affects company’s performance in terms of costs and customer service level. A single case study methodology was preferred since it enabled the collection of in-depth data. Findings suggest that product shelf life, carcass utilization and production lead time are the main constraints affecting supply chain efficiency and hence, a single planning approach is not appropriate when different products have different technological and processing characteristics.

Supply management:is it a discipline?

Purpose – To examine management literature for guidance on what constitutes a discipline. To examine supply management publications to determine whether the field constitutes a discipline or an emerging discipline. To contribute a structured evaluation to the body of supply management theory/discipline development knowledge. Design/methodology/approach – Literature review of what constitutes a discipline and an initial assessment of whether supply management is a discipline. Development of research questions used to design tests, using combinations of qualitative pattern matching, journal quality rankings, and social science citations index impact factor. Application of the tests, to evaluate field coherence, quality and the existence of a discipline-debate, to determine whether supply management is an emerging discipline. Findings – An initial literature review finds supply management not to be a discipline, as the field lacks quality of theoretical development and discussion, and coherence. Tests for increasing evidence of coherence, quality and impact yield positive results, indicating that supply management is progressing in its theoretical development. The test findings combined with the existence of the start of a discipline-debate indicate that supply management should be judged to be an emerging discipline. Originality/value – Drawing from the management literature, the paper provides a unique structured evaluation of the field of supply management, finding it not to be a discipline, but showing evidence of being an emerging discipline.

Outsourcing decisions:the case of parallel production

Purpose – The purpose of this paper is to investigate an underexplored aspect of outsourcing involving a mixed strategy in which parallel production is continued in-house at the same time as outsourcing occurs. Design/methodology/approach – The study applied a multiple case study approach and drew on qualitative data collected through in-depth interviews with wood product manufacturing companies. Findings – The paper posits that there should be a variety of mixed strategies between the two governance forms of “make” or “buy.” In order to address how companies should consider the extent to which they outsource, the analysis was structured around two ends of a continuum: in-house dominance or outsourcing dominance. With an in-house-dominant strategy, outsourcing complements an organization's own production to optimize capacity utilization and outsource less cost-efficient production, or is used as a tool to learn how to outsource. With an outsourcing-dominant strategy, in-house production helps maintain complementary competencies and avoids lock-in risk. Research limitations/implications – This paper takes initial steps toward an exploration of different mixed strategies. Additional research is required to understand the costs of different mixed strategies compared with insourcing and outsourcing, and to study parallel production from a supplier viewpoint. Practical implications – This paper suggests that managers should think twice before rushing to a “me too” outsourcing strategy in which in-house capacities are completely closed. It is important to take a dynamic view of outsourcing that maintains a mixed strategy as an option, particularly in situations that involve an underdeveloped supplier market and/or as a way to develop resources over the long term. Originality/value – The concept of combining both “make” and “buy” is not new. However, little if any research has focussed explicitly on exploring the variety of different types of mixed strategies that exist on the continuum between insourcing and outsourcing.

Assessing the impact of management concerns in e-business requirements planning in manufacturing organizations

This paper describes the application of a model, initially developed for determining the e-business requirements of a manufacturing organization, to assess the impact of management concerns on the functions generated. The model has been tested on 13 case studies in small, medium and large organizations. This research shows that the incorporation of concerns for generating the requirements for e-business functions improves the results, because they expose issues that are of relevance to the decision making process relating to e-business. Running the model with both and without concerns, and then presenting the reasons for major variances, can expose the issues and enable them to be studied in detail at the individual function/ reason level. © IFIP International Federation for Information Processing 2013.

Theoretical perspectives in operations management:an analysis of the literature

Purpose - It is important to advance operations management (OM) knowledge while being mindful of the theoretical developments of the discipline. The purpose of this paper is to explore which theoretical perspectives have dominated the OM field. This analysis allows the authors to identify theory trends and gaps in the literature and to identify fruitful areas for future research. A reflection on theory is also practical, given that it guides research toward important questions and enlightens OM practitioners. Design/methodology/approach - The authors provide an analysis of OM theory developments in the last 30 years. The study encompasses three decades of OM publications across three OM journals and contains an analysis of over 3,000 articles so as to identify which theories, over time, have been adopted by authors in order to understand OM topics. Findings - The authors find that the majority of studies are atheoretical, empirical, and focussed upon theory testing rather than on theory development. Some theories, such as the resource-based view and contingency theory, have an enduring relevance within OM. The authors also identify theories from psychology, economics, sociology, and organizational behavior that may, in the future, have salience to explain burgeoning OM research areas such as servitization and sustainability. Research limitations/implications - The study makes a novel contribution by exploring which main theories have been adopted or developed in OM, doing so by systematically analyzing articles from the three main journals in the field (the Journal of Operations Management, Production and Operations Management, and the International Journal of Operations and Production Management), which encompass three decades of OM publications. In order to focus the study, the authors may have missed important OM articles in other journals. Practical implications - A reflection on theories is important because theories inform how a researcher or practicing manager interprets and solves OM problems. This study allows the authors to reflect on the collective OM journey to date, to spot trends and gaps in the literature, and to identify fruitful areas for future research. Originality/value - As far as the authors are aware, there has not been an assessment of the main theoretical perspectives in OM. The research also identifies which topics are published in OM journals, and which theories are adopted to investigate them. The authors also reflect on whether the most cited papers and those winning best paper awards are theoretical. This gives the authors a richer understanding of the current state of OM research.

Bevezetés a lean menedzsmentbe – a lean stratégiai alapjai = Introduction to lean management – basic strategic elements of lean

A lean menedzsment az értékteremtő folyamatok stratégiai és operatív szintjének meghatározó formálójává vált az elmúlt évtizedekben. Jelen tanulmány stratégiai nézőpontból tárgyalja a lean menedzsment teljes bevezetését. Részletes áttekintést ad a Womack és Jones (2003) által lefektetett lean alapelvekről. Az operatív teljesítményjavulásból származó vevői értékteremtés mellett foglalkozik a tulajdonosi értékteremtéssel, az MRP és a lean szinergikus összekapcsolásával, valamint a lean ideális szervezeti környezetével is. A lean a kapcsolódó területek illesztését is megköveteli, a műhelytanulmány röviden kitér az emberi erőforrás, a teljesítménymérés, az ellátási lánc és a termékfejlesztés legfontosabb kérdéseire. = Lean management has become the dominant strategic and operative framework of value creating processes in the last decades. The working paper describes the strategic approach of full lean implementation. It is mainly built on Womack and Jones’s (2003) lean principles. Beside the five lean principles the study is concerned with customer and shareholder value creation, touches upon the relationship of lean and MRP, and describes ideal lean organizational environment. Lean redesigns value creating processes and requires functional fit of related departments, so the most important issues of human resource, performance, supply chain management and product design are discussed as well.

Emberi erőforrás menedzsment és gyakorlatai a lean termelésben – a tevékenységmenedzsment irodalmának tükrében = Human resource management and practices in lean manufacturing – review of Operations Management’s literature

A lean bevezetése nem korlátozódik a termelés újraértelmezésére, hanem jellemzően a vállalati belső működés (számvitel, emberi erőforrás, beszerzés) és külső kapcsolatok (beszállítók, ellátási lánc) újszervezését is megköveteli. Ezek a kapcsolódási pontok számos, tudományterületek határán fekvő kutatási irányt nyitnak meg. Ebben a tanulmányban a lean termelés és a belső működéshez sorolt emberi erőforrás menedzsment kapcsolatára fókuszálok. Célom, hogy a tevékenységmenedzsment vonatkozó irodalmának áttekintésével bemutassam a lean termelés logikájához illeszkedő emberi erőforrás menedzsmentet, annak jellemző gyakorlatait. = Lean goes beyond manufacturing, implementing its principles usually requires companies to reorganize their companywide internal operations (accounting, human resource, purchasing) and also external relations (supplier, supply chain). This linkages offer several multidisciplinary research directions, this study focuses on the relationship between human resource management and lean production. The main aim of this working paper is to review Operations Management’s literatures on this issue and present the human resource policy and its practices that fit and support lean production.

Munkaszervezés a lean termelésben – mit magyaráznak a termelésmenedzsment koncepciók = Work organization in lean production – what production concepts explain

A tanulmány a lean termelés munkaszervezését három termelésmenedzsment koncepció segítségével vizsgálja. Az egyes koncepciók a szervezet eltérő metszeteit érintik: (1) a termék-folyamat mátrix (Hayes és Wheelwright, 1979) a termék és a folyamat jellemzőit helyezi középpontba. A lean hatására a szervezet a mátrixban a nagyobb választék és a folyamat alapú működés (nagyobb függőség) irányába mozdul el. Az elmozdulást üzemi szinten a magas elkötelezettségű munkavégzési rendszer gyakorlatainak bevezetése kíséri, mivel azok támogatják a rugalmas működést, a gyors kommunikációt és problémamegoldást. Az elmozdulás „minősége” és így a munkaszervezési gyakorlatok használata (mélyég, száma, munkavállalók bevonása) nagyban függ a termelési stratégiától és a lean érettségtől. (2) A termelési stratégia szakaszai (Wheelwright és Hayes, 1985) a termelés üzleti stratégiában játszott szerepét elemzik. A lean termelés összeegyeztethető a termelési stratégia harmadik szakaszának „command és control” szemléletmódjával. Az ilyen lean termelők költégfókuszúak, a hagyományos munkaerőképben gondolkodnak és körükben kevésbé jellemző az új emberi erőforrás gyakorlatok használata. A lean termelés adaptálása ösztönözheti a vállalatokat a termelési stratégia negyedik szintje felé. A negyedik szint a bevonásra, problémamegoldásra és tanulásra épít, amely megfelel a lean „emberek tisztelete” pillérének. (3) A lean érettségi modell (Hines és társai, 2004) a lean szervezeten belüli elmélyülését és terjedését mutatja be. A lean utazás során a vállalatok az eszköz alapú megközelítéstől a komplex értékrendszerben gondolkodó lean szervezet felé haladnak. A technikai tudásanyag egyre szélesebb körűvé válik, ami rávilágít a tudásátadás (személyek közöttire, de akár struktúrákba, folyamatokba építése is) képességének jelentőségére. Az emberi erőforrás gyakorlatok folyamatosan jelennek meg. De csak a legfejlettebb szakasz, a lean tanuló szervezet megjelenése teszi valóban szükségessé a munkavállalói kép újragondolását is. = This paper examines work organization in lean production with the help of three production concepts. These concepts embrace different dimensions of the organization: (1) the product-process matrix (Hayes and Wheelwright, 1979) is about product and process characteristics. Due to the lean the organization shifts within the matrix – towards higher variability and flow (higher level of interdependencies). On the shop floor the shift is accompanied by the introduction of high commitment work system’s practices, since those support flexible operations, fast communication and problem-solving. The „quality” of the shift and hence the application of these work practices (number of practices, their embeddeness, employee involvement) highly depends on manufacturing strategy and lean maturity. (2) The concept of stages of manufacturing strategy (Wheelwright and Hayes, 1985) analyzes the role of the manufacturing function in the business strategy. Lean production is compatible with the „command and control” approach of the third stage of manufacturing strategy. These lean producers are cost-driven, they have the traditional approach of employees and apply new work organization practices to a less extent. However, the implementation of lean production may drive these companies to the fourth stage. The fourth stage of manufacturing strategy is based on employee involvement, problem-solving and learning. This stage is in full accordance with the „respect for people” pillar of lean production. (3) Lean maturity (Hines et al., 2004) shows the path how lean management deepens and expands within an organization. During the lean journey, companies progress from the tool-based approach to the complex lean value system. The technical knowledge of lean becomes more and more comprehensive and it points out the crucial importance of knowledge conversion capabilities (intrapersonal or even how to build knowledge into structures, processes). Work organization practices constantly appear with the progress, but the review of the traditional approach of employees is only essential at the most advanced stage, when an organization becomes lean learning organization.

Cooperation in an HMMS-type supply chain: A management application of cooperative game theory = Kooperáció egy HMMS-típusú ellátási láncban: A kooperatív játékelmélet egy menedzsment alkalmazása

We apply cooperative game theory concepts to analyze a Holt-Modigliani-Muth-Simon (HMMS) supply chain. The bullwhip effect in a two-stage supply chain (supplier-manufacturer) in the framework of the HMMS-model with quadratic cost functions is considered. It is assumed that both firms minimize their relevant costs, and two cases are examined: the supplier and the manufacturer minimize their relevant costs in a decentralized and in a centralized (cooperative) way. The question of how to share the savings of the decreased bullwhip effect in the centralized (cooperative) model is answered by the weighted Shapley value, by a transferable utility cooperative game theory tool, where the weights are for the exogenously given “bargaining powers” of the participants of the supply chain. = A cikkben a kooperatív játékelmélet fogalmait alkalmazzuk egy Holt-Mogigliani-Muth-Simon-típusú ellátási lánc esetében. Az ostorcsapás-hatás elemeit egy beszállító-termelő ellátási láncban ragadjuk meg egy kvadratikus készletezési és termelési költség mellett. Feltételezzük, hogy mindkét vállalat minimalizálja a releváns költségeit. Két működési rendszert hasonlítunk össze: egy hierarchikus döntéshozatali rendszert, amikor először a termelő, majd a beszállító optimalizálja helyzetét, majd egy centralizált (kooperatív) modellt, amikor a vállalatok az együttes költségüket minimalizálják. A kérdés úgy merül fel, hogy a csökkentett ostorcsapás-hatás esetén hogyan osszák meg a részvevők ebben a transzferálható hasznosságú kooperatív játékban a költség megtakarítást, exogén módon adott tárgyalási pozíció mellett.