Performance trade‐offs in manufacturing plants

Abstract

A sample of 782 manufacturing plants drawn from the UK Best Factor Awards database was used to investigate the nature of trade‐offs between different measures of manufacturing performance. Each plant was ranked within its industry on each performance measure, a high ranking indicating good performance on that measure and a low ranking indicating poor performance. By comparing the ranking of each plant within its industry on each performance measure it was possible to determine the extent to which good performance on one measure was correlated with good performance on other measures. Rankings on added value per employee £, quality consistency, delivery reliability, speed of delivery and the rate of new product introduction were positively correlated, suggesting that good performance on each of these factors is associated with good performance on the rest. Only the extent to which a plant exhibited product variety showed conventional trade‐off characteristics, being negatively correlated with rankings on added value per employee £ and the rate of new product introduction. This implies that, provided that individual operating units can be organized so that each is focused on a relatively narrow product range, trade‐offs can be avoided.