Zealand Manufacturing Research Articles

People Management Practices that Underpin Lean Management Outcomes

While evidence exists for an association between people management practices (PMP), firm characteristics and lean manufacturing practices (LMP), there is limited research focusing on different sized firms. What is not understood is (1) what PMP bundles are chosen by different sized firms which adopt LMP, and (2) what firm characteristics play a role in explaining these choices. The empirical evidence is based on archival data sourced from the world management dataset comprising of 299 Australian and New Zealand manufacturing firms. Using path analysis and disaggregated data on a set of commonly adopted PMP, we test for six PMP, namely, instilling a talent mindset, promoting, rewarding, retaining and attracting high performance as well as removing poor performers; and identify PMP chosen by firms which have a lean manufacturing strategy (LMS) and that adopt LMP. We find that relatively smaller firms that adopt many LMP also chose removing poor performers and promoting high performers to complement their LMS. The education level of management in those same relatively smaller sized firms is found to be a key factor explaining this PMP bundle. Deeper inspection of the results reveals differences between smaller versus larger firms. The study contributes to lean and people management literature that helps identify bundles of PMP chosen by different sized enterprises to complement their lean manufacturing strategy and practices.

Utilizing Blockchain Technology in the Supply Chain Management in New Zealand Manufacturing: The Theoretical Perspective

Utilizing Blockchain Technology in the Supply Chain Management in New Zealand Manufacturing: The Theoretical Perspective

The effects of competition on management practices in New Zealand – a study of manufacturing firms

Competition is a key factor in driving performance improvements across a range of firm activities including reductions in costs, increasing the levels of productivity, promoting entrepreneurial efforts, fostering innovation, driving better management practices, and exercising strategic managerial decisions. The questions of how and why competitive market forces influence management practices are the focus of this paper. Using data on management practices from 152 New Zealand manufacturing firms, and competition data obtained for various industries of the NZ economy, we examine the association between different dimensions of competition and management practices. Notably, we find little or no association between better management practices and competition when utilising simpler measures of competition, namely the number of competitors, industry concentration measured by HHI and the price-cost margin are used. However, using a more refined measure of competition, competition intensity characterised by profit elasticity, has a positive and significant association with the quality of management practices adopted by firms.

Managing to be environmentally responsible: incentives and disincentives reported by small businesses

ABSTRACTThe aim of the article is to explore the barriers and drivers to (and associated incentives and disincentives of) engaging with environmental management practices for small businesses. The data are derived from a sample of 148 small New Zealand manufacturing firms within one geographic region of New Zealand and analysed using non-parametric testing. Acknowledging the heterogeneity of small businesses, four categories of comparison are investigated, namely firm-focus, family-focus, firm size and age. Variable levels of engagement with environmental management practices are reported and disconnects between intention and action are evidenced. Despite a strong moral imperative for action being reported, this was not translated into firm-based practice. Further, lack of clarity as to the value of pursuing environmentally oriented change from a business perspective is evident. The article addresses a knowledge gap in respect of small firms and environmental management in this location and using these specific foci of empirical enquiry.

Sustaining lean in SMEs: key findings from a 10-year study involving New Zealand manufacturers

Productivity growth is an on-going challenge facing New Zealand’s (NZ) manufacturing sector. To help boost productivity, the Government attempted to implement lean through a targeted investment programme. We evaluate the effectiveness and success of this strategy, with reference to a sample of small to medium-sized manufacturers. Using the Sustainable Lean Iceberg Model [Hines, P. (2010). How to create and sustain a lean culture. Development and Learning in Organizations: An International Journal, 24(6), doi:10.1108/dlo.2010.08124fad.0072010] as a theoretical basis, we developed a case study protocol based around key constructs for sustainability of lean, and tested this using a sample of 20 manufacturers that had been part of the Government lean programme. Data were collected at two points in time; at least two, and at least eight years after the initial lean implementation. In the second round, we found that lean was being sustained in only one of the organisations as per our prediction following the first round. Two were attempting to sustain, and two were attempting to ‘re-implement’ lean. Four had abandoned lean altogether, and several had gone out of business entirely. Our study reinforces the vital importance of ‘strategy and alignment’, ‘leadership’ and ‘behaviour and engagement’. The tendency to focus on ‘quick win’ implementations of tools and techniques does not create the necessary cultural shift to permit sustainable lean.

A Survey Study on Industry 4.0 for New Zealand Manufacturing

This paper conducts a survey study on Industry 4.0 for local New Zealand manufacturing. With the feedback from the small and medium-sized enterprises (SMEs) in the manufacturing industry, this paper analyses the results and give some discussions. Based on the key findings and observations, an ‘ARPPAD’ implementation model is proposed for guiding manufacturing companies in New Zealand for implementing Industry 4.0 in different levels.

Strategic marketing in times of recession versus growth: New Zealand manufacturers

Purpose – On the basis of lessons gleaned from previous research into successful strategic marketing practices in times of both recession and growth, and in the face of an ongoing post-global financial crisis “hangover” characterised by unpredictable trading conditions both worldwide and in the Asia-Pacific region, the purpose of this paper is to provide insights and advice for marketing strategists within New Zealand’s manufacturing sector. Design/methodology/approach – The inquiry is based on two point-in-time mail surveys, one during recessionary conditions and the other during favourable economic conditions, with similar samples of 427 and 272 New Zealand manufacturers, respectively. Data analyses were conducted using SPSS and sought to compare and contrast successful strategic marketing decision making between the two time-points. Findings – The results confirm that, irrespective of prevailing economic circumstances, basic strategic marketing plays a pivotal role in facilitating the competitive success of New Zealand manufacturers. However, with the notable exception of three “evergreen” practices – targeting selected market segments, competing on the basis of value-to-the-customer, and finding new ways to do business – the results also suggest that different economic conditions otherwise necessitate quite different priorities for success at each stage of the strategic marketing decision-making process. Research limitations/implications – Due to relatively low-response rates, the extent to which the study samples are representative of the population under scrutiny remains unknown. Also, since an identical questionnaire was administered at two time-points ten years apart, differences in the respondents’ interpretation of certain questions and some of the marketing vocabulary and terminology used cannot be ruled out. Practical implications – The research highlights the important contribution that strategic marketing makes to the achievement of competitive success in New Zealand’s manufacturing sector. It also identifies some of the underlying “key drivers” that best predict successful strategic marketing decision making in times of recession compared with growth, thereby indicating a number of key lessons for marketing strategists. Originality/value – This study addresses a number of gaps in the empirical marketing literature. Although many previous studies have shown various strategic marketing activities to be critical to competitive success, few have examined it as a multi-step decision-making process and none have done so in the context of New Zealand manufacturing. Nor have previous studies sought to compare and contrast effective strategic marketing decision-making set against the background of contrasting economic circumstances.

Nurturing Internal Supply Chain Integration

Internal supply chain refers to the chain of activities within a company that concludes with providing a product to the customer. This process involves multiple functions within companies – sales, production, and distribution. It is obvious that these functions need to be integrated in order to provide good customer service. However, there is no consensus yet on how integration is to be defined and measured. This paper presents research that was conducted with the goal of developing an instrument for the measurement of internal supply chain integration. Scale items were identified from current literature and the resulting survey instrument was sent out to a sample of New Zealand manufacturers. Statistical analysis was conducted to validate the instrument. We also identified three dimensions of integration labelled coordination, communication, and affective relationship. This paper makes a contribution towards developing a consensus in the understanding and measurement of the integration construct.

SME internationalisation: offshoring, “backshoring”, or staying at home in New Zealand

Purpose – This paper aims to focus on production offshoring and “backshoring” in a representative sample of 151 New Zealand manufacturers. It identifies how and why firms offshore; why many increase their offshoring while others “backshore”; and why most firms continue to compete internationally without offshoring. Design/methodology/approach – Data collection used a two-wave postal questionnaire survey of 676 firms, with a usable response rate of 22.3 per cent and no indication of non-response bias. Findings – Most exporters manufactured only from their New Zealand base, but 44 per cent had outsourced some production offshore in the period 2001 to 2011. Among the 67 offshored firms, 11 had then “backshored” to New Zealand. The main reasons for offshoring were lower labour costs and capacity constraints in New Zealand. “Backshoring” occurs when lower labour costs become offset by impaired capabilities in flexibility/delivery; quality; and the value of the Made in New Zealand brand especially among consumer goods producers. Stay at home firms reported fears of lowered quality; country loyalty; and their Made in New Zealand country of origin brand. Practical implications – Offshoring begins tentatively but many firms then increase their offshoring to reap the benefit of lower labour costs. These reasons for “backshoring” mirror those given for keeping production in New Zealand and must be given careful consideration by firms considering offshoring. Originality/value – There are few studies of offshoring by smaller manufacturers and none that have elucidated this as a process, one that is still avoided by many and can end in costly “backshoring” for others.

The measurement of internal supply chain integration

PurposeInternal supply chain refers to the chain of activities within a company that concludes with providing a product to the customer. This process involves multiple functions within companies such as sales, production, and distribution. It is obvious that a company's performance would be enhanced by the integration of these functions. However, there is no consensus yet on how integration is to be defined and measured. The purpose of this paper is to present research that was conducted with the goal of developing an instrument for the measurement of internal supply chain integration.Design/methodology/approachScale items were identified from current literature and the resulting survey instrument was sent out to a sample of New Zealand manufacturers. Statistical analysis was conducted to purify and validate the instrument.FindingsIn total, three dimensions of integration were identified, labelled coordination, communication, and affective relationship. This paper makes a contribution towards developing a consensus in the understanding and measurement of the integration construct.Research limitations/implicationsThe selection and exclusion of measurement items for the survey have followed established principles of survey research, but may have been affected by the personal bias of the author. While every attempt has been made to comprehensively capture the state of the research up to the time of the study, there may be some omissions. The sample for the survey was drawn from a database of New Zealand businesses, thus the results are generalizable only to the extent that these businesses represent the population of all businesses. Another limitation is that no prior survey/case studies were carried out to collect practitioner's definitions/measures for integration.Practical implicationsThe authors hope to have made a contribution here towards building a consensus among practitioners and researchers in defining and measuring internal supply chain integration. For practitioners, the measurement instrument offers a self‐assessment tool for internal supply chain integration. This should help them in identifying areas for improvement.Originality/valueThe contribution of this paper consists of: development of an instrument for the measurement of integration, validating the instrument against a criterion, and the identification of three dimensions of integration – communication, coordination, and affective relationship. The unique contributions of this paper are the validation of the instrument against a criterion and the identification of “affective relationship” as a dimension of internal supply chain integration.

Rethinking a product and its function using LCA—experiences of New Zealand manufacturing companies

Purpose It has been recognised that life cycle assessment (LCA) has a role in framing problem situations in environmental management. Yet relatively few studies have investigated whether the use of LCA does actually lead to the reconceptualisation of product systems as opposed to answering predefined questions. This paper discusses the experiences of six manufacturing firms that commissioned LCA studies as part of a life cycle management project managed by Landcare Research in New Zealand.

Determinants of quality management practices: An empirical study of New Zealand manufacturing firms

A large body of research in recent years has resulted in the accumulation of knowledge about better (worse) management practices for manufacturing firms. Given the wide dissemination of knowledge about practices such as Lean Manufacturing, the importance of goal-setting, performance management systems, employee promotion and reward structures, it is unclear why some firms do not adopt these broad-based management practices. If there are management practices that have the potential to universally increase productivity of manufacturing firms, their lack of adoption by all firms in such markets remains a pertinent question. New Zealand is a small open economy facing competitive pressure from both its geographical distance from large markets and its minimum wage, which is above key international competitors. In this context we use a novel survey tool designed by Bloom and Van Reenen (2007) and McKinsey & Co. to construct a Management Practices Score (MPS) based on 18 management practices from 152 medium- and large-sized New Zealand manufacturing firms. We find that the MPS is positively associated with various firm productivity performance indicators, particularly profit per employee and firm sales, indicating that the MPS captures relevant information about management practices. We find that firm size, ownership structure, and the level of education among both managers and non-managers positively impacts management performance. Unlike the findings in earlier international research, we find that competition does not have an association with management practices. The findings here contribute to understanding why best management practices are not universally adopted by manufacturing firms. ► A ‘double blind/double scored’ method is used to measure best management practice. ► Our findings suggest that the scoring method has validity in a small open economy. ► The management practice score is positively associated with productivity measures. ► We argue that firm characteristics explain the presence of better management. ► Firm characteristics are associated with better versus worse management practice.

The Surprising Vulnerability of New Zealand Manufacturing to CO2 Emissions Pricing: The Lessons of an International Comparison

This paper compares the cost impact of emissions pricing in NZ manufacturing with the evidence available for United States, United Kingdom, European Union, Germany, Netherlands and Australia. It is observed that, relative to the comparator economies, a much larger share of NZ GDP is potentially at risk as a result of emissions pricing (even excluding the direct and indirect effects of agriculture). Possible reasons for this unexpected finding include: dissimilarities in industry structure, applicable emission factors for indirect emissions, level of aggregation at which industries are evaluated across countries and concentration of emissions in a small number of firms/industries. The paper identifies manufacturing activities are most emission intensive in NZ and in comparator economies. While some emission intensive activities are common to all examined economies, the food processing cluster is found to be at risk of losing competitiveness only in NZ and Australia.

Those who stayed loyal

PurposeDespite the ability of small and medium enterprise (SME) to successfully outsource production to low‐cost labour markets, some SMEs continue to produce in the domestic market. A sharp decline in the number of New Zealand manufacturers of consumer goods has been observed in the last five years. This raises questions regarding the viability of a domestic manufacturing strategy in a global marketplace. The purpose of this paper is to explore the performance of New Zealand manufacturers who continue to pursue a domestic manufacturing strategy.Design/methodology/approachThe contextual background for the research is discussed first followed by the development of seven hypotheses. An overview of the methodology is presented before the results of statistical tests. A discussion of findings and implications precede concluding remarks.Practical implicationsThis reasearch suggests that SMEs need not succumb to pressures to shift manufacturing offshore in order to remain competitive in the local market.FindingsFindings suggest that company size, export strategy, and importance placed on non‐financial goals influence the viability of a domestic manufacturing strategy.Originality/valueThis paper is unique in that it does not argue domestic manufacturing as an optimal strategy, rather it considers the viability of a domestic manufacturing strategy in the consumer goods market. Furthermore, the paper adds insight on manufacturing strategy when faced with a small domestic market.

Emission intensity in New Zealand manufacturing and the short-run impacts of emissions pricing

This paper reports the greenhouse gas (GHG) emission intensity of the New Zealand (NZ) manufacturing sector at a combination of industry group and class levels (sub-sectors). The short-run impacts of a price on emissions are investigated with a focus on exporting activities. Sub-sectors that could be materially impacted by an expected range of emissions prices accounted for slightly over 9% of national gross domestic product. It is found that there is much variability of emission intensity within manufacturing and even within sub-sectors. An assessment of trade intensities further indicates that several emissions-intensive activities are also export-intensive. These activities are at most risk of losing competitiveness in the short-run if they are subjected to a price on GHG emissions that their competitors in other countries are not. Emissions reduction policies must take account of trade competitiveness imperatives if NZ is to meet its international GHG emissions target while maintaining manufacturing sector competitiveness.

The adoption of strategic marketing practices: A comparison between New Zealand and Chinese manufacturers

The adoption of strategic marketing practices: A comparison between New Zealand and Chinese manufacturers

Entrepreneurship and aggregate merchandise trade growth in New Zealand

We present a descriptive analysis of firm-level merchandise trade, focussing on the role of novel exporting behaviour. We document two aspects of the dynamics of trade—the contribution of novel activity to aggregate export growth and, conversely, the substantial exit rates of new trade relationships. The unique contribution of this paper lies in the detailed and comprehensive data we have available on market and product choices. Specifically, we make use of shipment-level goods trade data, linked to information for the universe of economically active New Zealand manufacturers, to examine trade at the firm level and at the product-country-firm nexus. Our growth decomposition and survival analysis suggest several themes: (a) novel market entry is a significant contributor to aggregate export growth; (b) the study of international entrepreneurial behaviour should encompass not just de novo entrants, but the broad range of trade innovations initiated by incumbent exporters; (c) much expansion in trade appears to be incremental in nature; (d) despite this, such innovations appear to be inherently risky; and (e) experience and scale appear to be key factors in overcoming these risks (or at least proxies for such factors).

Exploring the vacuum in training evaluation: is this a case of mission impossible?

PurposeThis paper presents research‐based insight on the challenges of evaluating training activities in today's complex organizational settings.Design/methodology/approachThe research is taken from three case studies conducted in the New Zealand manufacturing sector, as well as sources of relevant literature. The commentary takes a critical‐realist perspective and challenges learning and development professionals to address the poor reputation of training evaluation.FindingsHuman resource practitioners recognise the importance of gaining feedback from learning events, but research reports question the thoroughness of evaluation processes, claiming they rarely happen to the satisfaction of management. Consequently, training budgets become an easy target during periods of rationalization. The problem centres on overcoming the complexity of defining a meaningful cause/effect relationship between the training and resultant benefit. This research discovered the presence of an “evaluation vacuum” and nine thematic areas requiring close attention. The paper offers reasons why the evaluation of training is becoming increasingly difficult.Research limitationsThe findings are contextual and may not fit all settings, but they offer a comparative account of training evaluation in both straightforward and complex learning environments.Practical implicationsThe paper has real and practical implications for human resource professionals. Evaluation of training is not a trivial issue and organizations need to get much better at explaining the beneficial outcomes derived from investments in training.Originality/valueThis paper will be of value to human resource professionals and managers, assisting them to think differently about evaluating training. Innovative concepts such as the “evaluation vacuum” and the term “learning bleed” clarify priorities and contribute to a new perspective on evaluation.

An empirical study of performance measurement systems in New Zealand manufacturing companies

In the current dynamic business environment performance measurement (PM) is increasingly important. Although financial measures have been the primary focus in the past these measures have outdated and are considered by some writers to be misleading and even harmful. Much more emphasis is being placed on non-financial measures in approaches such as the Balanced Scored and Integrated Performance Measurement Systems. To date there have been few empirical studies of the characteristics and indicators of the PM systems being used. This project surveyed 219 manufacturing companies to investigate the use of performance measurement system (PMS) in New Zealand. The low response rate does not allow any general conclusions to be drawn but there are indications that New Zealand manufacturers are adopting with an increasing emphasis on non-financial measures.

Towards a socially responsible management control system

PurposeThe purpose of this paper is to investigate the measurement and monitoring of social responsibility within the management control system (MCS) of an organisation that subscribes to a stakeholder and social responsibility approach and to propose a framework that provides for the integration of the MCS with social accounting and social responsibility aspects.Design/methodology/approachThe paper is based on a case study of a small privately owned New Zealand manufacturing business that subscribes to social responsibility and stakeholder principles.FindingsOverall, the paper finds that the MCS of the case organisation did not measure or monitor social responsibility. Building on the case findings and the literature examined, a framework is proposed that provides for the integration of the MCS with social responsibility. A significant finding is that both formal measurement and informal control are key aspects in developing a MCS that incorporates social responsibility considerations.Research limitations/implicationsThe findings relate to a single manufacturing organisation based in New Zealand. Future research could examine different settings (i.e. country, organisation type, etc.) and investigate application of the proposed framework in relation to particular performance measures and controls that organisations may possibly adopt.Practical implicationsOrganisations following a stakeholder and social responsibility approach should also consider the design of their MCS.Originality/valueThis paper helps to fill a gap in the literature concerning knowledge about the design and operation of MCSs in relation to stakeholder and social responsibility issues. Few studies in this area have been based on a case study approach. The paper further contributes to the literature by proposing a framework that provides for the integration of the MCS with social responsibility aspects.