Abstract
In an era characterised by a volatile economy, intense competition, and rising energy and material costs, improving operational efficiency has become a necessity for margin purposes and long-term business success. This research study attempts to develop a model for process operations variability reduction that integrates the fundamental drivers, the intermediate measures and the four traditional competitive capabilities: quality, cost, delivery reliability and speed of delivery. In addition, it highlights the precise mechanisms in plants that lead to multiple competitive capabilities development. The concept of a routine-based approach to capabilities development provides a nexus between the earlier actions by the organisation and competitive advantage. Using longitudinal data from the Manufacturing Circle of South Africa, a statistical analysis was conducted to support the model, and path analysis models were developed which confirmed that the performance frontier is really a surface that spans many different dimensions. It is observed that the model clearly outlines pathways to process operations variability reduction through better execution of the routines concerned with maintaining the performance by current processes, improving existing processes, and transforming or changing to new processes.
Highlights
Today’s process manufacturers are faced with a volatile economy, intense competition and rising energy and material costs
The business environment confronts operations managers with changing operating conditions and complex internal challenges that cause variations throughout the operational chain (Bozarth, Warsing, Flynn & Flynn, 2009). Regardless whether they result from the organisational strategy, predictable suppliers or customers’ behaviour, or from unforeseeable events that are beyond immediate control, negatively affect the performance capabilities of firms in aspects such as quality, cost efficiency, speed of delivery and delivery reliability (Hopp & Spearman, 2001)
Analysis of the Manufacturing Circle survey database provides a fair degree of support for this proposed conceptual model
Summary
Today’s process manufacturers are faced with a volatile economy, intense competition and rising energy and material costs. The business environment confronts operations managers with changing operating conditions and complex internal challenges that cause variations throughout the operational chain (Bozarth, Warsing, Flynn & Flynn, 2009). Such process operations variability, regardless whether they result from the organisational strategy, predictable suppliers or customers’ behaviour, or from unforeseeable events that are beyond immediate control, negatively affect the performance capabilities of firms in aspects such as quality, cost efficiency, speed of delivery and delivery reliability (Hopp & Spearman, 2001)
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